What is a multi-unit freehold block?
A multi-unit freehold block (MUFB) is a single freehold property divided into individual units with no separate leases. It can also apply to situations like a succession of terraced residences with the same title.
Multi-unit freehold blocks (MUFBs) can be a smart investment option since they provide added protection by decreasing your exposure to rental voids, and they normally provide a higher income than a single residence buy to let property.
An MUFB is not to be mistaken with a home of multiple occupations (HMO), which will have shared facilities. Instead, a MUFB will feature self-contained flats with their own kitchen and bathroom.
Obtaining a multi-unit lease mortgage can be tough due to the fact that it is a somewhat specialized section of the buy to let industry, but it is definitely achievable for most. It’s simply understanding where to look for a multi-unit buy-to-let mortgage, which is sometimes referred to as a multi-unit buy-to-let mortgage. Knowing a few fundamentals can also be beneficial.
- Usually available up to a maximum of 75 percent of the property value or purchase price, although up to 80 percent may be attainable on rare occasions.
- First-time landlords (FTLs) are usually eligible, whereas first-time buyers are not (FTBs)
- While the number of units in each freehold property is normally limited, it is feasible to acquire financing for an unlimited number of units.
- Loans are available for individuals or limited organisations to own.
- Repayment options include interest-only or capital-and-interest repayment.
- The interest cover ratio (ICR) is usually calculated based on the total rentable value of the property.