Lots of questions so I will summarise a response here for you. First of all with regards to Licensing and Planning these are different matters. Currently in most areas a property with 5 or more tenants on 3 or more floor requires a mandatory HMO license. As the manage of a property which you would be with this strategy the license can be in your name it does not have to e the ownere of the property. Currently if there are 7 or more tennants you also need to get planning permission for the property to be used as an HMO.

The new legislation coming in this April will allow local councils the authority to request that any residential property being turned into an HMO with three or more unrelated people living there may require planning permission. Having spoken to a number of councils about this the general feeling is that most councils do not have the man power to enforce this and so will probably only do so in areas where there are far too many HMOs which is having a detremental effect on the local community. I suggest that you check woith your local council to find out what they are planning to do in April.

You could always let put four of the rooms in the property whilst you apply for the license and then fill the fith room once you have the license in place.

This strategy will not work with every property. If there was substantial work required to a particular property I would not bother taking out the option. Also remember that this is done with full knowledge of the landlord and so you need to reach an agreement with them as to what the arrangements are after 5 years if you do not purchase it. If you hve made improvements such as add ensuite bathrooms I image the owner would be happy to keep those. If you use donwstairs receptions rooms as bedrooms I would not add ensuites as this may be strange if you event convert them back into a normal house.

We have a number of people on my Property Mastermind Programme doing very well for this strategy. It works very well in the right area.

I hope this helps

Kind regards

Simon Zutshi

My question is: Do you undertake this work yourself on a purchase lease option? (If so, you surely wouldn’t be able to move people in on day one as you wouldn’t have completed the necessary works to get the HMO license). In five year’s time, should you decide not to exercise your purchase option, would you pay to revert the property back as it was?

Also, which mortgage lender are you using? All that I’ve researched do not allow letting on an HMO basis (but I acknowledge that there must be some who do it!)

It is currently possible to avoid mandatory licensing by staying under three stories and less than five tenants, however these rules look set to change also as I’ve become aware that the government intends to make properties with 3 or more tenants subject to planning permission.

(Feel free to e-mail your response.)

You can find the owner by looking on Landregistry and paying a small fee to get the deeds which will have the address of the owner so that you can send them a letter.

To clarify you pay them the single AST rent they they want and then make the profit on the differnece between the mulitlet rental income and what you pay them + bills.

I hope this helps kind regards Simon

Is there a price set for the purchase or are you suggesting you babysit the owners mortgage or pay them rent similar to that for one family renting then makin the profit from the multi let. You havent made that clear.

Regards

Ian Haith