As a professional property agent, I understand the challenges and rewards of managing an HMO (House in Multiple Occupation). Achieving full occupancy is the ultimate goal, ensuring a steady income stream and maximising the return on investment for property investors. Here are some tried and tested strategies to help you achieve this:
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Tenant Screening and Protection
Selecting the right tenant is imperative for successful HMOs. Implement a rigorous screening process, encompassing background checks, previous landlord references, and financial stability assessments. This not only ensures timely rent payments but also fosters a harmonious living environment for all occupants. You don’t want tenants arguing about gone off milk, not washing the dishes, food being stolen and bins not being taken out!
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Obtain or Renew HMO License
Compliance is key. Ensure your property is licensed as per local regulations. This not only safeguards you legally but also instils confidence in potential tenants, assuring them of a professionally managed property. It’s not really a sales feature, it’s a must. If you don’t you could be facing a substantial fine if caught.
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Regular Maintenance and Upgrades
First impressions count. A well-maintained property is more appealing to prospective tenants. Regular inspections, prompt repairs, and periodic upgrades can significantly enhance the property’s appeal, ensuring it stands out in a competitive market. Some cities are competitive so you need to make sure your HMO is up to scratch.
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Competitive Pricing
While quality is paramount, pricing cannot be overlooked. Regularly benchmark your rents against the local market, ensuring they reflect the amenities and location of your property. Note how saturated your product is in your market, for example if there are lots of similar rooms available locally at the same spec then price accordingly because you don’t want a long term void (cost of that on cashflow can be higher than reducing your price). Similarly whilst you think your room should be £450 but it’s the only ensuite room at 15m2 in a 1 mile radius then you could be commanding a higher premium.
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Effective Marketing
Visibility is crucial. Make sure you get your rooms listed on the right portals for your tenant demographic. Think about if you’re targeting students, professionals or housing benefit tenants. High-quality photographs and detailed property descriptions can significantly enhance your listing’s appeal.
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Open Houses and Viewings
Allow potential tenants to experience the property firsthand. Regular viewings and open houses provide an opportunity to showcase the property and address any queries or concerns.
Also when is the best time to arrange viewings for the vast majority of your tenant demographic. For example evenings and Saturday mornings for young professionals. Create competition and scarcity.
Also don’t forget about students, make times accessible for groups.
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Engage with Current Tenants
A satisfied tenant is your best ambassador. Regularly engage with your occupants, addressing any concerns promptly and ensuring their stay is comfortable. Happy tenants often lead to referrals, further boosting occupancy. You want your tenants to get along and if you have good tenants in already then if they bring in more of their friends you’ll maintain the right culture for the house.
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Flexible Leases
Adapt to the market. Consider offering short-term leases or incentives for longer commitments, catering to a broader range of tenant requirements. You may want to look at short term contractor markets, you may want to look at serviced accommodation. But make sure you have the rights to do this, there is talk of clamping down on HMOs being used for serviced accommodation in various locations across the UK
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Offer Incentives
In a competitive market, incentives can make all the difference. Whether it’s a discounted rent for the first month or a referral bonus, such gestures can tip the balance in your favour.
Invariably this sacrifices on tenant quality, so if you offer 1 week free rent etc it does attract those that haven’t got the money to begin with, however it can quicken up the letting process.
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Partner with Corporates
Forge strategic partnerships. Collaborating with local businesses can provide a steady stream of potential tenants, especially if your property is located near business hubs. There are also a number of care providers that are after accommodation so keep on the lookout.
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Utilise Property Management Tools
Efficiency is key. Leveraging property management software can streamline tasks such as booking management, maintenance requests, and tenant communication. There are a lot of these platforms about and we don’t recommend any in particular but if administration isn’t your strong point and you have a number of rooms to fill this can help you stay on top of things and get rooms filled quicker.
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Feedback and Reviews
Reputation matters. Encourage your tenants to share their experiences online. Positive reviews can significantly influence potential tenants and enhance your property’s appeal.
In conclusion, achieving full occupancy in an HMO requires a blend of professionalism, adaptability, and proactive HMO management. In a 4 bed for example, having 1 room empty can have a big dent on cashflow so your occupancy strategy is crucial. By implementing these strategies and maintaining a keen focus on tenant satisfaction, property investors can maximise their returns and ensure their HMO remains a sought-after choice in the market.
