What is a HMO? A house in multiple occupation (HMO), is any property that is shared with three or more people. You don't need to be a licensed landlord to manage a standard HMO with less than four occupants. There are specific mortgage requirements for HMOs, however, that differ from buy-to�let mortgages for whole property tenancies.
A traditional property to buy and let would normally accommodate one person or a whole family. Renters would pay a single rent payment, either weekly or monthly. The household would also be responsible for paying the utility bills. These are sometimes referred to as "singlelets".
HMOs: Why should you invest? - There are fewer "impactful gaps" between tenants: The gap between tenants for a single occupancy property can be as low as a month. This allows for repairs, redecorating, and viewings without rent coming in. An HMO allows you to reduce your losses by renting from the remaining tenants. You may also be able to deduct more costs than with a standard BTL.
HMOs do not always generate the same rental income as buy-to-let properties. Remember that utilities bills are often paid by landlords. With the above example, even with an annual PS2k-3k utility bill, there's still a lot of rental profit.
As nobody wants to take another person's mess, common areas tend to 'get left. Sometimes, landlords will need to clean the property or hire cleaners.
Mortgages to buy-to-let are often less expensive in terms of fees and rates. There are also more lenders offering them. Because the criteria isn't as stringent, they are easier to get. An HMO will often make additional profit on top of the mortgage.
HMO Finance Rates The lender's willingness to consider your individual circumstances (e.g., your experience and the location) will affect the rate of interest that you are charged.