HMO licences may be issued by local councils. These licenses are valid for five-years if they are approved. HMO licences will be issued to each property, and not to each landlord. In other words, a landlord will need a license for each HMO property if each HMO requires one.
HMOs can prove more challenging to manage than traditional buy and let models. HMOs are often shared by tenants, so it is possible for tenants to fall out. A mediator may be needed between tenants who aren't on the same page.
A House In Multiple Occupation can offer more income than traditional buy to rent. Landlords have the opportunity to maximise rental incomes due to high rental demand in the UK. The right mortgage is key to maximising the rental income.
HMO buy to Let4 bedroom semi-detached home with 2 reception rooms1 converted bedroomRent to 5 single working professionalsMonthly rent income per tenant = PS400Monthly Rental Income = PS2000Annual Rental Income = PS24,000. It's easy to see why HMO properties are being sought after by more landlords. The difference in gross rental income is quite remarkable.
Students can get their rent guaranteed, often by their parents. They also have a natural limit on the length of their tenancy.
HMO mortgages are required for landlords who rent out to more than 3 tenants from different households. Your property will not be eligible for a regular buy-to-let mortgage as they are designed only for single-household renters. A regular mortgage would be required on HMO properties. This could lead to lenders taking legal action.
What is an HMO loan? HMO mortgages are designed for landlords who wish to rent out their property more than three tenants. These specialist mortgages for buy-to let have key differences.