12:32 PM, 14th May 2014, About 8 years ago 13

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I am about to by a HMO property with 21 rooms to let in London. 21 Rooms HMO

My questions are ………..

1) How difficult is it to run a large size of HMO and what difficulties should I expect along the way?

2) Has anyone had any experience of HMO of this magnitude.

I am thankful for any advice/information regarding this.





by Reza Ansari

23:57 PM, 18th May 2014, About 8 years ago

Reply to the comment left by "Yvonne B." at "16/05/2014 - 10:54":

Thanks Yvonne,

again, some useful advice from you.

I am contacting a broker (Mark from 118)to raise some equity from my portfolio to invest in new properties. I did not understand the meaning of ''you can hold multiple properties under 1 commercial loan' !!!I have currently couple of commercial properties without any mortgage. Can i ask for one mortgage for 2,or 3 of them?.Sorry if some of my questions seem stupid.Otherwise i have instinctively or of luck has followed your golden roll of ROI with good return.

Kind Regards


by Yvonne B.

13:06 PM, 21st May 2014, About 7 years ago

Sorry for late reply - been away for a few days, just back at my desk today!
I'm glad your ROI has worked out for you - HMO's tend to be good returns but higher wear & tear and certainly one with 21 rents coming in should prove lucrative!

I'm sure you've spoken to your broker by now and can have some answers. I have only dealt with residential - HMO's, houses split into self contained flats, etc, I do not have any commercial as we know it.(shops, offices, etc) .

However, it is still called a commercial loan because we are running it as a business and it's different than the normal 'Buy to let' mortgage.

I would assume you could group your 3 properties in a commercial loan - I don't see why not, this would give you a hunting facility so that you could add on properties as you find them with the bank funding 100% based on the equity already in the pot.
As follows;

If you had 3 properties, all worth £200k each = £600k
You arranged a 70% loan to value at 4.5%.
That would give you 70% of the £600k = £420k available funds
You use £200k of these available funds to buy the 3rd property at £200k
Leaves you with another £220k to spend on other properties - no deposit required.

You will pay 4.5% on the outstanding balance at any one time, that will be £18,900 on interest only per year on the full £420k. Many banks are also requiring some repayment element of the loan too although it is not financially beneficial to pay off the loans (Seems crazy but you will still pay tax on profits after the £18,900 interest & other costs. If you decide to pay another £20,000 per annum in repayment off the loan you will also pay 40% tax on this! - It's better using the £20k to invest in property again - even if you spend £20k on an existing property - the value will go up and you won't have to pay the tax on it so long term it's better to not pay repayment - it also affects your cashflow rather substantially!


by tony

22:33 PM, 4th August 2017, About 4 years ago

Arsh Ehellahi
Sells property deals, and teaches others to do the same, and he sends the deals to his data base of buyers, but he then cuts the original deal source out of the deal and gives them nothing for finding and sending him the deals, so deal sourcers beware of his unethical and under handed actions.

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