A large HMO, also known as a HMO, is a rental home with more than five tenants. In this case, the tenants share a common toilet, bathroom and kitchen. There might be a limit to the number of stories within a building. Landlords require a HMO license to operate a large HMO. This licence will be valid five years.
HMO landlords will often pay utility bills if the property isn't converted to flats and has separate title deeds.
This can give the term "unlicensed HMOS" a negative meaning, suggesting they are illegal or fleecy. Owners, local authorities and lenders call these smaller HMOs multi-lets or "HMOS Not Requiredly To Be Licensed", also known as "nonlicensable HMOs".
A House in Multiple Occupation (HMO), is a property rented to more than one tenant. They may share facilities, such as a bathroom and kitchen. HMOs allow landlords to rent out a property to more than one household.
HMOs are a good investment. - You can expect to make roughly twice the rent if you have a higher rental income. A four-bedroom house rented to one family can be rented for PS800 per monthly, while four tenants pay PS400 each. To attract tenants, you might charge a rent plus all bills. Your costs will be much higher.
HMO licences can have additional conditions depending on the council. HMO licences may only be requested by local authorities. Without a license, the penalty for renting a licensable HMO is up to PS20,000.
HMO mortgage lenders will also need to know details about the property. Some HMO mortgage lenders may have restrictions about how the property is built. It is important to get a lender to approve renovations before you sell the property. A mortgage broker can assist you with navigating these different restrictions and conditions so you can find a willing lender.