Traditional buy to let would house a family of people or at most people who choose to live together. Disputes within the household can be resolved without needing to involve the landlord. The HMO type will typically be for students or working professionals.
HMOs are often restricted to specific areas. HMOs, for example, are designed to target certain tenants such as single professionals or students. An HMO's location is often restricted to central locations, or areas with easy access to bus routes and other amenities. It would be absurd to have an HMO in a remote location in the middle or even in the middle of nowhere.
HMO licences may be granted by different councils. If you are applying for a HMO licence, you should be fully informed about all the conditions. HMO licences must be obtained from the local authority. Otherwise, a fine of up PS20,000 will be imposed on anyone renting a licensable HMO.
After you have gained some experience in letting property out, you might be ready to move on to renting out HMOs. A specialist HMO mortgage is required to convert an existing property into an HMO, or purchase a new one. If you have an existing property that is financed by an ordinary buy to let mortgage, you should contact your lender to discuss remortgaging the property to an HMO deal.
HMO (Houses in Multiple Occupation) may be more profitable that regular buy to rent investments. HMO mortgages are also becoming more popular with landlords. However, is it really necessary to have an HMO mortgage? Can a traditional mortgage be sufficient?
HMO mortgage rates can be more expensive than traditional buy-to-let mortgage products. HMO mortgages are more competitive because of the smaller number of lenders. HMO loan lenders will have higher rates and fees. However, HMO income should be enough to cover mortgage, utility bills, maintenance and other expenses.
What is an HMO Mortgage? HMO mortgages are mortgages that landlords use to rent out their properties to more than three tenants. These mortgages are specialized in buy-to-let and have key differences.