HMOs: Why should you invest? - A higher rental income: As a rule of thumb, you can expect to net approximately twice the rent. Four-bedroom houses can be let out to one family at PS800 each month. This compares with four separate tenants who pay PS400 per month. You may charge rent inclusive of all bills to attract tenants. However, your costs could be significantly higher.
As the price of a home is rising, young buyers still have a strong desire for affordable rented accommodation. Look at local listing websites (Gumtree. Zoopla. Rightmove ) to determine the strength and demand from prospective tenants.
This gives the term "unlicensed MMOs" a pejorative connotation, implying that they are either illegal or flying blind. Some local authorities, lenders and owners refer to these smaller HMOs in the following ways: multi-lets; "HMOS Not Required to Be Licensed" or "non-licensableHMOs".
Students: You can have your rent guaranteed (often by your parents) and usually have an automatic limit to the length their tenancy.
There are a small number of UK specialists who will lend on large HMO property and understand the risks associated with multiple tenants. They each have their own definitions for HMOs and what they will lend against. A broker can help you create your application and match you up with the right broker. CMB is an experienced broker who can package your application in a way that suits the lender. This speeds up the entire application process.
The HMO will generally yield a greater return on investment than letting out a home to a tenant. You can charge by the room and so charge more. This will require a specialist loan.
HMOs must have a valid five-year license from the local authority where the property is situated. It is important to ask the relevant local authority about the policy regarding your area of interest. A licence is required for properties with less than five tenants. Because it is dependent on the location, you will have the best chance of submitting your application.