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Our Top Tips for Filling Your HMO Property with The Right Tenants
In order to make money from a HMO property you need to have your properties as full as possible, as much as possible. You can’t afford to have months going by with rooms unlet or allow tenant disagreements and conflicts to leave you with empty properties. We have some tried and tested tips to help you keep your property full and your tenants happy from the start, all based on making sure you choose the right tenants in the first place. 1. Background CheckDon’t leave anything to chance when selecting tenants for a HMO. You must take up references, particularly from previous landlords, and you should interview potential tenants to get a feel for them and how they would fit and mix in your property. You need to get a credit check to establish their ability to make payments and try to ask about their lifestyle and interests. Meeting the prospective tenant in person will give you a good feel for how they will fit in your HMO so don’t be tempted to just base your choice on paperwork alone to save time. Don’t forget to do the Right to Rent check too!2. Create a CommunityEach HMO will have its own culture, an atmosphere and feeling just as your own home does. A house of multiple occupancy is not just a place people sleep, eat and keep stuff; it has to become a home of multiple occupancy too! You have to have a community that people want to live in for the long term. In order to achieve this, you must pick your tenants wisely and choose people you think can create that kind of community. Once you have an established community and culture in a property and a tenant leaves, fill their place with the same due diligence so that the culture you have created is not disturbed. For example, ideally you want a community where each tenant takes personal responsibility for tidying up communal areas as tenants quickly become disgruntled if they are left picking up all the work.3. Don’t mix tenant typesMost HMO tenants fit one of the following categories; student, professional or LHA. As a general rule these different types of tenants have very different lifestyles and so mixing them in one HMO just does not work. Students tend to stay out late, sleep in late and are renowned for late night parties and general slovenliness! Professionals need early starts and don’t get on well with being disturbed late at night etc. Scheduling clashes, noise levels, common interests and overall lifestyle differences mean that mixing tenant types often leads to conflict so try to avoid it where possible.4. LHA tenantsAccepting local housing allowance tenants in HMOs can prove problematic. LHA uses a flat rate allowance based on the size of the tenant’s household and the area in which they wish to rent – therefore they may not be receiving the full sum of the rent you are charging so bear that in mind! In a HMO where bills are shared you are opening yourself up to tenant conflict as well as conflict between you and the tenant if some of the residents cannot pay on time or find themselves in bad debt. Remember your tenant base creates a culture and community for the property and to attract and keep more tenants you must have a culture that people want to live in, one where they can all feel safe and happy and one where everyone contributes their fair share to upkeep, bills etc.5. Long TermIdeally you should look out for tenants who are in it for the long run! Be wary of tenants who have a long address history and have regularly moved. There may be good reason for this or there may well be very bad reasons so make sure you find out why this is. Having to constantly find new tenants is not only time consuming but each change affects the community in the house so you want to limit it as much as you can. Look for tenants who are looking to settle for their course or job and try to keep them for as long as possible, it makes life easier for everyone involved. For advice, property mentoring or to book on to one of our courses get in touch with the team at Nick Fox Property Mentoring. We would love to help you on your journey to becoming a successful property investor and landlord.