Generate income from my home?

wmat983

Good afternoon,

I'm after some advice, I have a 6 bedroom house, could call it a 7 bed as the old garage got converted into an extra room due to previous owner having a disabled child.

Anyway, I was thinking of downsizing,I don't need a house this big, my house is in fairly decent location, I have 3 schools, hospital and access to motorway all within approx 2 mins drive.

I was wondering if it would be a good idea to move out and rent the house out per room maybe? My mortgage on it is currently fixed at around £750/month approx.

Would I be able to change mortgage to BTL mortgage?

Other option would be to stay here around 5 years, sell house, buy smaller home and be mortgage free, I currently have 25 years left as it stands!

Any advice would be much appreciated as I have no experience with HMO's etc!

Thank you in advance for any replies!

Guest101

welshmatt983 wrote: »

Good afternoon,

I'm after some advice, I have a 6 bedroom house, could call it a 7 bed as the old garage got converted into an extra room due to previous owner having a disabled child.

Anyway, I was thinking of downsizing,I don't need a house this big, my house is in fairly decent location, I have 3 schools, hospital and access to motorway all within approx 2 mins drive.

I was wondering if it would be a good idea to move out and rent the house out per room maybe? - well then those schools would be redundant dont you think? My mortgage on it is currently fixed at around £750/month approx.- that will change once you get a BTL mortgage

Would I be able to change mortgage to BTL mortgage? - I don't know, how much equity do you have in your property, percentage wise

Other option would be to stay here around 5 years, sell house, buy smaller home and be mortgage free, I currently have 25 years left as it stands! - I think that answers my previous question.

Any advice would be much appreciated as I have no experience with HMO's etc!

Thank you in advance for any replies!

Why would you rent it out per room? It's so much more work for an inexperienced person

wmat983

Guest101 wrote: »

Why would you rent it out per room? It's so much more work for an inexperienced person

I was just thinking may generate more income than if I rented out per room than if I just rented it out to a large family etc.

Guest101

welshmatt983 wrote: »

I was just thinking may generate more income than if I rented out per room than if I just rented it out to a large family etc.

Undoubtedly it would. But even the most experienced landlords shy away from a 7 bed HMO.

saajan_12

This forum likes to analyse the suitability of a property as a rental, but here I think it is key. You need to think about what your target market would be:

Big family in renting the whole house: many of the residents could be children or retirees, with a handful of adults working. They would need to be able to afford the rent on a 7 bed house but not afford / want the stability of buying..

Group of sharers renting the whole house or let individual rooms in HMO: Are there likely to be singles or couples wanting just a room in a house share in the area (e.g. university, industrial area, large employer nearby?) Does the immediate local area cater to other interests of these potential tenants (e.g. shops, restaurants)? Does the house cater to several unrelated people using shared facilities without necessarily coordinating a routine like a family would (e.g. large kitchen, enough utilities / washing facilities, enough bathrooms, large enough living space, car parking).

Just as unique / unusual properties are hard to sell (one of for most people), they are also hard to rent out, which you may need to do frequently depending on tenant turnover.

wmat983

Guest101 wrote: »

Undoubtedly it would. But even the most experienced landlords shy away from a 7 bed HMO.

Any other idea's, care home, bedsit? Or just keep it until I have enough equity in it to sell and buy smaller home and be mortgage-free?

I want to increase my income and get a large property portfolio just seems so hard to do, I got 2 houses before I was 25 and done nothing since so just frustrating!

wmat983

saajan_12 wrote: »

This forum likes to analyse the suitability of a property as a rental, but here I think it is key. You need to think about what your target market would be:

Big family in renting the whole house: many of the residents could be children or retirees, with a handful of adults working. They would need to be able to afford the rent on a 7 bed house but not afford / want the stability of buying..

Group of sharers renting the whole house or let individual rooms in HMO: Are there likely to be singles or couples wanting just a room in a house share in the area (e.g. university, industrial area, large employer nearby?) Does the immediate local area cater to other interests of these potential tenants (e.g. shops, restaurants)? Does the house cater to several unrelated people using shared facilities without necessarily coordinating a routine like a family would (e.g. large kitchen, enough utilities / washing facilities, enough bathrooms, large enough living space, car parking).

Just as unique / unusual properties are hard to sell (one of for most people), they are also hard to rent out, which you may need to do frequently depending on tenant turnover.

My thought was the hospital nearby, they have recently expanded everything up there so I was thinking staff may need accommodation nearby.

Crashy_Time

Best bet would be HA or Care type organisation that houses and supports people with mental health issues or disabilities, that way they are basically running the let and paying you for it, but the tax implications could be complicated, I don`t know. Another option is get it on the books of a nearby Uni for them to let to visiting professors/exchange students/ mature students etc., but maybe they have all this on campus these days, again I`m not sure, and they may only pay a small retaining fee when it isn`t in use? The most money for you would probably be the Care/HA route, unless the budget gets chopped in future.

wmat983

Everyone says the way to get rich is by buying property, then keep re-investing profits and expanding, this was the reason why I thought about renting per room might be a good idea, more income pump back in and re-invest.

I guess like I said early maybe best idea would be to sell and buy a small house, get mortgage free and build from there?

Guest101

welshmatt983 wrote: »

Any other idea's, care home, bedsit? Or just keep it until I have enough equity in it to sell and buy smaller home and be mortgage-free?

I want to increase my income and get a large property portfolio just seems so hard to do, I got 2 houses before I was 25 and done nothing since so just frustrating!

Well there's 3 options.


1: live in it, get lodgers if you want
2: rent it out, pick a target audience - students, families, locums for the hospital?
3: sell it now. buy with a smaller mortgage.


What would happen if you moved out and your tenants stopped paying rent? Could you afford to support both properties?


Do you want to be a landlord? Do you have time? Is there actually money to be made? - ie after tax, costs, sinking fund and fees will you be better off investing in something else?

Guest101

welshmatt983 wrote: »

Everyone says the way to get rich is by buying property - That was 20-30 years ago. You wont get rich doing that now. , then keep re-investing profits and expanding - That only works in a small percentage of cases. Just look back to 2008 to see what happened to those who lived on a shoestring budget , this was the reason why I thought about renting per room might be a good idea, more income pump back in and re-invest. - How much more? Have you don the maths?

I guess like I said early maybe best idea would be to sell and buy a small house, get mortgage free and build from there?

it's up to you. But being a landlord is not sitting back and watching money flow in. Just look at the horror stories on this forum