As you don't know the criteria of every lender, it is not a wise idea to approach lenders in your quest for a mortgage. A specialist can ensure that the right lenders are approached and that you receive the best rates. For assistance with mortgage queries, contact us immediately or make an inquiry at any moment.
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".
Once you have some experience in renting property, you might be able to transition to HMO letting. It is possible to either convert an existing property or purchase a new one. However, you will need a specialist HMO loan. If you already own a property with an ordinary buy-to - let mortgage, your lender will want to talk to you about remortgaging it to an HMO.
HMOs will not all generate triple the rental income of a regular buy to let. It is also important to remember that utilities bills are typically paid out by landlords. The above example shows that even with a PS2k-3k monthly utility bill, rental profits are still substantial.
In assessing the HMO's value, lenders might consider your rental income. This is especially useful if you are trying to withdraw equity or have converted the property.
Multi lets work in the same way as HMOs, except that they are rented to non-related tenants and they share the common areas. The main difference is that multi lets are not licensed.
You should also consider void periods. An HMO has more void periods than a traditional buy-to-let. HMOs may have higher maintenance costs than traditional buy-to-let models. This is due to shared communal areas like bathrooms, kitchens, and living rooms (where appropriate).