5 Tips to Consider as a HMO Landlord
12 Apr 2019 - Peter
HMOs are Houses of Multiple Occupancy - put simply, it’s a home occupied by 3 or more unrelated people, who share common areas, like kitchens or bathrooms.
HMOs are attractive to landlords and investors because the total rent attracted by the individual rooms can exceed the rent you could achieve by renting the whole house.
We’ve learnt a few lessons managing HMOs and keeping tenants satisifed, which we’ve condensed into this blog post.
1. Know your Tenants
Before you even buy an HMO, you should do some local research on your potential tenants. Will they be professionals, students or other type of tenant?
Each of these tenant types will have different expectations and you should modify the property to fit.
- A highly paid professional in an affluent area will not rent a room with basic facilities
- HMOs in an area where workers commute must have sufficient car parking or public transport available
- Young professionals and students demand fast internet. A traditional broadband connection will not be sufficient for more than 3 heavy users. We recommend all HMO owners choose fibre internet where available.
Once your property is suitable for your tenants, you should ensure your tenants are a good fit for the property:
- Start by collecting reference and gain permission to run a credit check if possible
- Ensure your property has like-minded tenants. Tenants who become friends take better care of the properties and are likely to stop longer. Even better - give incentive for existing tenants to find new tenants in their social networks.
2. Hire Responsive Management
Ensure your HMO has a highly responsive property manager. By responding to issues promptly, tenants are satisfied and their tenancy length increases. With a longer tenancy length, you’ll pay less for tenant-find services have fewer void periods.
Tenancy Stream responds to issues 24 hours a day, typically within 1 hour or less.
3. Do a Tenant Welcome Talk
Once a tenant agrees to let your property, don’t just give them the keys. Follow this guide below and invest 30 minutes in a simple conversation to protect your property:
- Introduce your new tenant to the existing tenants, either in-person or via email.
- Give your new tenant a copy of the ‘house rules’ and explain why these rules exist. Ensure your tenancy agreement includes penalties for breaking these rules.
- Share useful advice to help protect your property - such as regularly opening windows to prevent mould, keeping an extractor fan running in a windowless bathroom and more.
- Demonstrate how key appliances (such as showers, ovens and washing machines) operate. This prevents accidental damage.
4. Prevention is Better than the Cure
Turning a property into an HMO increases wear-and-tear, but a proactive approach can prevent this:
- Regular professional cleaning prevents mould, damp and deterioration of the property. We recommend that you arrange for a professional cleaner to visit the property monthly and clean all communal areas. When a tenant leaves, their room should also be professionally cleaned.
- If a tenant reports an issue, it should be resolved promptly. Ensure your property manager is proactive in encouraging tenants to report reasonable issues. This encourages tenants to take care of the property. Should you decide not to resolve an issue, be sure to explain your reasons to the reporting tenant.
5. Furnishing, Fixtures and Fittings
In our experience, investing in more durable furniture, kitchens and general appliances is worth the cost. For example:
- A lower cost kitchen might save initial costs, but cheaper materials often absorb moisture and decay quickly. Investing in a solid wood kitchen will save costs in the longer term.
- Choose showers, appliances heating equipment that are easy to replace and repair. Check that replacement parts can be sourced quickly for any appliances.
- Take a complete inventory and take photos of the whole property. This ensures you can evidence any deposit reductions.
If you have any questions, or just need some advice, get in touch. We’re always happy to have a chat.