HMO licenses are issued by local councils and can be renewed for up to five years, if approved. HMO licenses are issued for each property, not each landlord. A landlord who has three HMO properties would need a license for each one.
HMO mortgage rates can be more expensive than traditional buy-to-let mortgage products. HMO mortgages are more competitive because of the smaller number of lenders. HMO loan lenders will have higher rates and fees. However, HMO income should be enough to cover mortgage, utility bills, maintenance and other expenses.
HMOs: What are the benefits? - Less "impactful voids": A gap between tenants at a single occupancy house can be as little as one month. This allows you to make repairs, redecorate, and view the property, without any rent coming in. The rent received from other tenants can be reduced with an HMO. Your costs could be more tax-deductible than a standard BTL.
HMO licenses are subject to different conditions by individual councils. However, you should be aware of these requirements before you apply. HMO licences can only be obtained if required by the local authority. A fine of up to PS20,000 is possible for renting an HMO licensable without a licence.
Lenders might take into consideration the potential rental income when assessing your HMO's worth. This is especially important if the property has been converted and you want to withdraw some equity.
A traditional buy to rent property typically can accommodate one person or the entire family. A household would make a single rental payment each week or month. The household would also have to pay utility bills. These are commonly referred as'singlelets'.
Landlords have two options for managing their HMO property: a single, joint and severally liable agreement or an individual contract per tenant.