An HMO is a house with typically five or more individually let rooms, and a multi-let is usually up to four. Both have shared facilities like a kitchen and bathroom, and are rented by tenants not from the same family or household. Different councils have varying rules and definitions, so check with the local authority before making a purchase, especially in Scotland where the rules are much stricter.
With house prices in many regions on the up and salaries not rising as quickly, many people are renting. With whole properties being unaffordable, houseshares are often their best option. Not only does it benefit the tenants financially, but an HMO or multi-let can generate high yields for the landlord. A three-bedroom house could be rented at £600+ per room, resulting in £1,800 or more each month. It’s typically a greater income than when renting to a family or couple.
But before you invest, research licenses and regulations. Also, setting up could be expensive and a short-term lets can mean frequent repairs due to wear and tear. Nonetheless, if you’re planning on using your pension pot or other savings to invest in B2L, renting to multiple tenants could give you a decent income.