Many people are discovering the profit making opportunities of turning office blocks into flats and either selling them or renting them out. If you are thinking of doing this then you might have questions about what loan is suitable for this or what you need to do to get started. There are certain criteria’s by the lender for example – minimum value of each flat.
Though the building work will cost a lot of money, time and effort there are some long-term benefits to taking on a project of this size. For one, there is a great opportunity to make profit if the flats are sold. Or if you prefer, renting out each property which would give you an increased income as rent will be coming from each flat.
Owning flats has much lower maintenance than houses if bought freehold in a block. In addition, there is no grounds to maintain or building work. So all you will need to worry about is maintaining the boiler, smoke alarms and fixing anything that you have provided.
Where do you start?
The first thing you need to do is find a building that is in the right area with the right amenities. If you are planning on charging higher rent then you will need to ensure that the residents are able to afford the rate. If there are colleges or universities in the area then you could rent to students, though the rent would have to be lower. There is an opportunity here to rent rooms within the flats to the students. This will increase your income stream even more.
Another option is to choose somewhere that is near a big business and rent to people who commute to the business. If there are a lack of flats in this area, then this could solve an issue for the commuters.
Once you have found the property you will need to seek out planning permission. There will be extra regulations if the building is listed.
What about the funding?
Funding Hut have been able to help a lot of landlords get their property portfolio started by securing them a low interest loan that suits their needs. Talk to one of our team today and we will find you a loan that works for you.
What do you need to once the tenants are in?
There are regulations that you need to follow in order to keep your properties legal. For example each flat must have a smoke alarm installed and a carbon monoxide detector.
When writing the tenancy, you need to make it clear how the bills will be paid. If you have students as tenants then you will need to ensure that the council knows that they will not be paying council tax. You might have consider installing separate electricity and gas meters or use sub meters.
Whatever you decide for your project, we can assist with securing you the best possible loan. Talk to our team today:
Advantages of running a HMO (House of Multiple Occupancy) property
Landlords are discovering the benefits of turning their property into a multi-occupancy house. Each bedroom in the property is rented out to a single occupant and each tenant pays rent and their share of the bills. This way of living is particularly popular among students.
It is also used by people who work far from home, they stay in the room Monday to Friday then go home at the weekends.
There are things to consider before you turn your property into a HMO, for example if there are only students in the house then they will not pay
council tax. However if there is someone in the house that is not a student then some council tax will need to be paid. If you are unsure then you should contact the council.
There are regulations that the house will need to abide by the new regulations that came in on 1st October 2018. These regulations state that landlords who own HMO’s must apply for a licence (in certain cases).
The rooms that are being rented out also have to be a certain size and there are limits to how many people can live in each room.
It is also the responsibility of the landlord to install smoke alarms and carbon monoxide detectors.
There are many Lenders who can offer HMO mortgages to Limited companies and landlords. Funding Hut is able to help find you the perfect loan for buying the house and transforming it. Whatever your situation, talk to our friendly team about your property and we will find you a loan that suits your needs