Being an HMO landlord can be super stressful especially if it’s your first time doing it. There’s so much to be done and very easy to screw things up. For a starter, things can get really tough unless you know exactly what you need and what is needed of you. You must understand why you are into the HMO rather than rent the property to a single tenant. But still, you can do it and when you do it yourself you can get quite a lot from it. So, how do you get stress free HMO management?
Here are a few things you can do to run a stress-free HMO business:
1. Understand the legislation involved
Single-let properties are often straight forward. All you need is find and vet the prospect tenant, sign the contract and set up the rent collection mode. On the property, you just have to comply with the legislation and keep the property in a habitable condition.
On an HMO, there is quite a lot needed of you. For starters, you’ll need planning permission and a license which approval will depend on:
the number of tenants
tenant relationship
property location
In most areas, 4 or more beds you need mandatory licensing. This is actually different compared to earlier where the requirement was dependent by the number of floors that’s why you need to inquire whether or not you need licensing. For this, you can contact your local council to understand whether you are required to.
2. Deal with property maintenance requirements
With HMOs, there are maintenance requirements that you are supposed to deal with different from those of single to let. One of the major ones is fire safety whereby the more tenants the more the requirements.
On this, you need to have adequate fire escapes, multiple fire detectors and fire extinguishers.
Also, you are responsible for keeping the communal areas clean which can be a good idea to hire a cleaner.
3. Draft a proper tenant contract
One of the biggest stress you can get on your HMO property is the tenant. You will be dealing with separate individuals and have them coexist on one household. This comes with a lot of challenges that you can solve only by having a well-documented contract with them.
4. Establish communication channels
The key foundation of a good relationship is communication. With your HMO, you need to set up a good communication method and encourage the tenants to communicate with you and each other. You can set up a WhatsApp group and ensure everyone informed about issues involved with the property.
You should, however, try to maintain proper boundaries; Be friendly but you don’t have to be friends. Always try and maintain professionalism in the group discussions.
You should also conduct regular checkups to spot and note the problems before they turn big.
Be mindful, though, on the tenant privacy by letting them know about the visit before you show up.
5. Deal with void periods
Another thing that can be a stress factor on HMOs is the void period. To deal with this, you can give the tenant discounted rates if they hold the property on their away time. But first, you need to understand your target market and how competitive your area is to decide. If you want to avoid voids altogether, then consider guaranteed rent on your HMO.
During the vetting, favour those who work around or if you are dealing with students, favour those who are planning to stay during the summer period.
The easiest way to stress free HMO management!
Overall, when managing an HMO its important to focus on building a good relationship between you and your tenants. Also, avoid different sets of individuals; if you are dealing with students you should deal with them all the way. If professional just professionals. Have a specific type of tenants!