A House in Multiple Occupation, also known as HMO, is a property rented to more than one tenant. In this case, the tenants share some of the rooms with each other, such as a bathroom or kitchen. The kitchen, bathroom, lounge and living room. People use the terms "flat share" or "house share" to refer to an HMO.
A House in Multiple Occupation is a property that's let to more than three tenants. The tenants share some rooms but have their own bedrooms. The kitchen, bathroom, and lounge. Flat share or house share is an HMO.
HMO licenses are subject to different conditions by individual councils. However, you should be aware of these requirements before you apply. HMO licences can only be obtained if required by the local authority. A fine of up to PS20,000 is possible for renting an HMO licensable without a licence.
HMO mortgages tend to be restricted to experienced landlords. For example, some lenders won't consider applications from someone who has been a landlord for more than 2 years and/or has experience in HMO-letting. Lenders might have additional requirements. It is possible to apply for an HMO mortgage but it may be difficult to obtain approval if you are not a landlord.
These higher potential returns come with greater risks. There is a greater chance of having a higher turnover rate than with traditional buy-to-let. Every additional tenant is an unknown factor (e.g. Will they pay rent? They will cause damage. They could cause disputes. A specialist mortgage is also required.
HMOs can be considered higher-risk than standard BTLs. HMO tenants move around more quickly than standard BTL tenants, and there is a greater risk of voids. They can be less committed as tenants to their property as their home. This could mean that they are less responsible for its care and maintenance. Additionally, it can be difficult to identify any issues or damage with a specific tenant.
Students can get their rent guaranteed, often by their parents. They also have a natural limit on the length of their tenancy.