There are many forms of investments that people could opt for these days. However, data provided by propertywire.com show that "houses with multiple tenants are a better option to buy to let investment." Houses in Multiple Occupation (HMOs) are the most steady and cost-effective form of buy to let investment in the United Kingdom. These arrangements can protect landlords alongside higher costsbrought about by the interest rate rise in the UK. It appears that the recent policies in the UK have led to various challenges for the homeowners and tenants alike. Based on an earlier report by thisismoney.co.uk, "Thousands of buy-to-let landlords will see their earnings hit after George Osborne cracked down on mortgage interest tax relief in his summer Budget today."
The move instigated will level the field between landlords and their tenants as well as for the homebuyers and investors. Based on a data provided by propertywire.com, "HMOs, generally rented to young professionals and key workers who are intrinsically geared towards maximizing rental income." It is done by leasing each room on an individual basis. It clarifies that the proceeds of a standard buy to let investment can be eliminated out by a 3 percent increase in the interest rates. Assuming mortgage rates increase by the same amount, as gross rental income is not sufficient to cope with higher mortgage interest repayments as added in a prior article by propertywire.com.
Although it may seem that HMO landlords pay for all household bills, the circumstances that the property produces a much higher gross rental income definitely show that these costs are easily absorbed. The analysis provided propertywire.com suggests that the maximization of income from a given size of property through creating extra rooms. Also, renting them to multiple tenants means HMOs can generate rental income. The outcome would be that it is up to four times greater than the rentals attained in a standard buy to property.
