Jump to content

Residential Property to: BTL vs HMO

Andy Ayim

Recommended Posts

Hi all,


Really enjoy reading all the topics in this forum. I currently have one BTL investment in Manchester and live in London and face the following dilemma. 


Situation: With my mother and brother moving out in the coming months I face the problem of having spare capacity in our residential property.


Consequence: With only my younger brother and myself left in the house, it is highly likely we will move out and either rent somewhere new or buy a place to live in.


What does this mean?


Option 1: I could convert the 4 bed house (5 if I convert the living room to a bedroom), into a HMO ready let, obtain a license and remortgage the house before renting out each room (fully aware of the added stress of HMO's).




Option 2: Remortgage and rent the house out as a BTL property, for a lower yield than HMO's but with less stress associated.



The property is in north London...... what would you advise/do?








Link to post

Hi Andy,


For a property of that size in North London I imagine the yield wouldn't be fantastic as a single let (would the rent support the level of borrowing you need/want?) but it would rent easily, and there would also be strong HMO demand.


Would you be willing/able to self-manage if you went down the HMO route? Finding a good agent who specialises in room lets isn't impossible, but there may or may not be one in your area.


That seems to be the trade-off - the extra money v your time - and that's a decision only you can make!


Another factor is lending, which is always going to be tougher on an HMO than a single let.


What are the main factors influencing your decision at the moment?



Link to post

Hi Rob,


The yield on single lettings would not be great, but suffice enough to cover borrowing with a small margin. However I am keen to put in the time and effort to let it as a HMO. I know the local market well and have already spoken to two potential tenants and have popular avenues for marketing rooms to LHA/ low pay workers. 


I envision upfront it will be capital and time intensive getting the property HMO ready and attracting the initial tenants. I think the real hurdle will be regarding obtaining lending. 


I am going to reach out and speak to a few brokers and HMO landlords in the community to better understand the challenge ahead.





Link to post

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • Create New...