So you are thinking about become an HMO landlord?!?In our last blog we talked about what an HMO is and some tips you need to get you started. You can read that post here
. In this latest blog we will look at the steps you need to take to get started in the world of HMO lettings.Nick Fox has proved that HMO lettings is an area where you can see great success and hopefully these steps can help you do the same.Here are our 4 steps to get you started.
- Locate the perfect property
The first step is of course to find the perfect property to get you started. Remember that HMOs tend to be targeted at the lower end of the rental sphere, offering cheaper accommodation. Students are of course a very popular option.As an HMO landlord, your property search will need to be very different than if you were looking for a family home. You are very unlikely to attract a couple or families into a shared property.Before you start your search you should make a decision about which tenant group you wish to attract. Primarily HMOs attract the following types:
- Foreign workers
- Local housing allowance claimants
- Low salary workers
- People who move for workers e.g. contract workers
It’s vital that you answer this question in the early days. For example if you are targeting students and the nearest university is 75 miles away then you have a problem. Also, if you purchase a property in a nice part of town and trying to attract low salary earners, again you have a big challenge on your hands.Make a decision on who you want to attract and allow that to drive your HMO property search.
- Bring in the finance required
You don’t need any special type of mortgage in order to purchase a HMO property. Most lenders are not adverse to HMO purchases but more often than not they just don’t advertise this.This is not a tricky part of the process as there are plenty of options available to you, it’s just a matter of spending the time you need to get the best solution for you.
- Get the property ready
Once you have purchased your first HMO it’s time to get the property ready so you can attract your new tenants. Again, it’s important that you operate from the basis of who you are wanting to attract. Often the most popular option for a HMO can be to create a simple and cost effective look and feel.You don’t need to go luxurious and spend vast amounts of cash. Often tenants don’t require the standards you might think they do, so no need to spend a fortune on fixtures and fittings. Yes, make it look attractive but be clever in how you do it.Cheap and cheerful can win the day for you!
- Let the rooms
There are a number of ways that you can fill your property. One of the most effective ways is through the classified ads of a local newspaper and online through relevant Facebook groups. Most areas have Facebook groups set up where you can promote lettings that are available and they can be very popular and effective. There are also many online forums that you can now use through the power of the internet.Once you have advertised make sure you are prepared for the enquiries. Think about the criteria that you want your tenants to fulfill and prepare the questions so you can ask them over the phone when they make their initial inquiry. Also, let them know exactly what you want them to bring in terms of documentation when they view the property.If they agree to become your new tenant then ensure they sign the relevant agreement with you and take copes if ID and any other relevant documents. Plus, most of all, ensure you get the deposit from them. If you are thinking of moving into HMO letting then why not grab yourself a copy of HMO Property Success. Full of information you will need to get you started, you can purchase your copy here.
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