Buy to Let? or HMO?
Building cash flow quickly?
Buy to Let? or HMO? This is a hot topic when thinking about investing in property.
Now, I want to talk you through the different strategies and I hope this get’s things clearer in your mind.
Making your money work
Of course this is the main reason for any investment. So, let’s look at a few options here. Buy to Let? or HMO? hummmm….
Firstly, I will say both are great options. It just depends which one works for you and your money.
Buy to Let
This is pretty self explanatory. Basically it refers to the purchase of a property specifically to let out, to tenets.
This means it is not to live in and that is to rent it out.
A buy to let mortgage is a mortgage loan specifically designed for this purpose.
HMO
Buy to Let is a fantastic strategy, don’t get me wrong. WE do it a lot. However have you ever considered a HMO?
I know you are wondering what that is? Let me explain. HMO stands for ‘House Of Multiple Occupancy’. In short this means 5 or more people living in one house.
Options
You could actually re-configure your Buy to Let into a HMO. There are many benefits to doing this. Such as cash flow.
I will explain in a bit more detail. A 4 bed Buy to Let could maybe bring you in £695 pcm. However, if you turned this into a 5 bed HMO at £100pw per person it would total £2166 pcm. Wow!! Sounds good right?
A few things to check
A few things you need to be sure on.
Check if your area is a article 4 area, which means planning potentially could be a problem if there is a 20% saturation of HMO’s in that particular area.
You will also need a licence for your property.
The local council and planning office are your first port of call if you are wanting to look into this strategy every area is different and so is each council.
How can we help?
To be honest, there are so many options available to you. So, please do not worry, we are here to help you!
What we do is work with our investors, so that you have the confidence to know your money is working for you.
You will not be getting negative rates, put it that way!
If you want to have a conversation on how we may be able to help please just get in touch here.
Be back soon
We will keep bringing you up to date information about Sheffield, I Squared Properties and what we are up to and new developments we are taking on.
Speak soon
Laura and James
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