These complex properties are not suitable for lenders who are less risk-averse. The ones that are will be able to offer financing will most likely have their own criteria.
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.
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.
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).
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".
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.
HMO properties are sometimes advertised as having irresistible gross yields of 100%+. Who wouldn't love a piece? The HMO sector has a high yield, but you need to be aware of your costs. This includes council tax, insurance costs, utility bills, management fees, rent arrears and any voids. In reality, an HMO can yield an ROI of 8-10% each year, compared to 4-5% for a single-tenancy purchase-to�let.