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HMO Management 101 For Landlords


There's no doubting the benefits in letting an HMO property. Multiple tenants mean more rent payments every month. The income potential is excellent and, depending on location, demand can be high. A property a stone's throw away from a university, for example, should have prospective tenants queuing around the block.

 

But of course, there are two sides to every coin. Being an HMO landlord isn't easy. The financial upside is definitely there. But you have to work hard for your rewards. And there are so many more rules and regulations to follow compared to other rental properties. But if you're going down the HMO route, what are the things you need to know and how can you manage your property without using an estate agent? We'll look at these questions in this article.

 

Red tape aplenty

 

The first issue you'll face is the rules and regulations you need to follow. There's much more red tape when you let an HMO. For example, there's mandatory licensing for those properties with more than four tenants. But each local council may also have their own licensing rules too. Make sure you have a thorough understanding of the local licensing conditions before you think about letting your property. If you're in any doubt contact the council for advice. There are stiff financial penalties for running an HMO without the correct licence, so make sure you're fully covered.

 

You also have to abide by all the other standard regulations including annual gas safety checks, Energy Performance Certificates and making sure the property is a fit place to live. But HMOs also have additional fire safety rules. This could include extra smoke alarms and signage in communal areas for example. Again, make sure you’re fully aware of the regulations which apply to you.

 

Finding your tenants

 

A fully occupied HMO can be lucrative. But of course, you need to fill it first. Finding tenants isn't always easy. If you're doing your own marketing you need to be proactive and make sure you get the message out fast.

 

Many tenants, particularly young people and students, will start their property search online. You need to be there too. Unfortunately, the bigger online letting platforms like Rightmove and Zoopla are off limits to private landlords. Only approved letting agents can advertise on those sites. So, it may be worth using a letting agent to find your tenants for you. MakeUrMove typically finds a tenant within 12 days of listing a property which could save you a lot of time and effort. Especially as you need to find multiple tenants.

 

Keeping the cash flowing

 

A potential drawback with HMOs is they may be empty for parts of the year. Though this only applies to student housing when void periods are almost inevitable during the summer months. I say 'almost' because some students do rent all year round. Instead of going home in the summer holidays they'll find a job locally and stay in their digs.

 

Usually, the extra income from multiple tenants will make up for seasonal void periods. But you could bring in additional rent by renting out empty rooms during the summer. A seaside or tourist location is obviously more suited to this. But again, creative marketing could help you keep the property fully occupied all year round.

 

Managing the property

 

Probably the biggest challenge facing HMO landlords is actually managing the property and tenants.  With more tenants, there's more scope for things to go wrong. Make sure your tenants can quickly report any maintenance issues. Keep on top of repairs so they don't get out of hand and potentially violate your licence. One way to do this is to use a property management service like the one provided by MakeUrMove. It includes a 24-hour emergency hotline which tenants can use to report repairs. 

 

Delegating the management of the property can save you time in other ways too. Rent collection, compliance management and inspections are all taken care of.  Preparing the tenancy agreements which can be tricky in HMOs can also be outsourced. This takes so much weight off your shoulders. But of course, if you prefer to be totally hands on you can take care of everything yourself. But do be organised and be prepared for long and unsociable hours.

 

HMO buy to let property investment

 

There are downsides to letting an HMO. There are long hours and lots of hoops to jump through. But the financial rewards from this kind of property investment can be very worthwhile.

 

Private landlords can find tenants fast by listing their property with MakeUrMove the online letting platform bringing landlords and tenants together.


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