Is this true? Well…it’s complicated. That’s why I invited Simon Allen from Total Business Finance onto the show, to dispel the myths about HMO mortgages and get to the truth about valuing HMOs.
Listen to this week’s show and learn about HMO mortgages:
- Whether it’s true that an HMO is valued at 10 times its annual rent (spoiler: it’s a little more complicated than that)
- Which factors affect how an HMO will be valued
- How to mitigate the risk of buying an HMO then not getting the valuation you want
- Some fascinating inside information about the criteria that lenders use: what determines how much will they lend, and to whom, at any given time?
- All the lenders who make up the HMO mortgages market, and the differences between them
- How to decide which lender to approach with a potential HMO project
- What the future has in store for HMO financing
Also, I wrote a post recently explaining the concept of “recycling your cash”: structuring a property deal so you can pull (at least some of) your initial funds back out to use again, rather than having to save up from scratch for the next deposit. Check out that post here.