How to Organise Houses in Multiple Occupation (HMOs) Finance Checklist

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How to Organise Houses in Multiple
Occupation (HMOs) Finance Checklist

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Definition

Your property is probably an HMO if:

  • Three or more unrelated people live there, as at least 2 separate households – for example, 3 single people with their own rooms or 2 couples each sharing a room

  • The people living there share basic amenities - for example a kitchen and/or a bathroom

 

 

Types of HMOs

  • A house split into separate bedsits

  • A shared house or flat, where the sharers are not members of the same family

  • A hostel

  • A bed and breakfast that is not just for holidays

  • Shared accommodation for students

 

 

Location

  • Determine target market

  • Transport, buses, trains, commuter route

  • Close to a university or hospital

  • Demand and supply in the area

 

 

 

Finance

  • Gross yield versus net yield

  • Is your broker FCA regulated?

  • Is your broker a full member of the National Association of Commercial Finance Brokers?

  • Experienced HMO landlord?

 

 

 

Valuation

  • Bricks & Mortar Value - where a property is valued in accordance with its neighbouring properties

  • Investment Value - where a property is valued on its investment value or a multiple of its income

 

 

 

Is the borrower going to be a limited company or an individual?

 

 

All our information is brought to you by Kate Faulkner, author of
Which? Property books and one of the UK's top property experts.
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