You can usually make more from an HMO as a landlord than by renting to a family. You will be able to charge each room separately, which can lead to higher overall charges. A specialist mortgage is required to achieve this.
How much does it cost for an HMO licence to be obtained? Costs for obtaining an HMO license vary by area. Some councils will charge for the number of bedrooms, while others will charge a fixed fee. These fees can vary from a couple hundred pounds to over a hundred. Lenders know the time required to issue a licence. Therefore, they may accept proof when underwriting a mortgage. Being prepared ahead of time will help avoid any delays.
An HMO's running costs are usually higher and require more effort and time. An HMO will have more safety and security guidelines than a regular buy-to-let. Each room will need locks. An HMO setup cost will be more expensive than a regular buy-to-let.
Common areas are often left 'as is' because no one wants to clean up another's mess. To maintain their property, landlords might have to clean up or hire cleaners.
It is crucial to do the numbers crunching in order to make an HMO profitable. Our HMO mortgage experts can help you maximize your rental income through a thorough analysis of your proposal. A great deal is key to making your HMO more profitable. Many lenders offer preferential rates through mortgage brokers.
HMO Valuations: Lender methods for valuations can vary slightly. Lenders may use traditional surveyor inspection, as well as comparing the property to similar properties within the same area. If there are no other HMOs in your area, the valuation will be done based on the sale price as if it were one household. This method does not account for the additional income HMOs can attract from multiple rental incomes. It limits the amount that you can borrow.
HMOs with no license may not qualify for an HMO mortgage. Lenders may instead consider a buy-to Ð let mortgage.