For many property investors, the excitement of investing in a House of Multiple Occupation (HMO) consists of finding the right property, buying it and then refurbishing it to just the right standard – just enough to attract tenants but not too much so that you blow the budget.
Many property courses focus on sourcing and refurbishment of a property, but if you can’t fill your rooms the investment falls apart.
Often you might use a lettings agent to rent out your property, saving you the time and hassle of finding the right tenants. Many agents are not familiar with the unique configuration of HMOs and if this is your first HMO you will need to start to look for an agent quite early on to ensure you choose one who is experienced at letting HMO rooms.
Alternatively, you might choose to let and manage the property yourself. Which route you choose will depend on a number of factors such as:
a) How close you live to the property
b) How large the property is
c) Whether it is licensed or not
d) Whether you plan to grow the lettings side of your business
e) How much time you have
f) Whether you want to do it!
It’s important to have a process which will help you FIND the right tenants, SCREEN the right tenants, KEEP the right tenants and enable you to turn your rooms round quickly at the end of the tenancy for the process to begin all over again! I’ve named the process ‘‘Tenanting without Tears’, a process refined over my many years of managing my own property portfolio. There isn’t many situations I’ve not experienced over the years!
There are five steps to finding tenants:
Present the house and rooms in an appealing way by dressing and staging them beforehand
Price the rooms according to value, size and amenities
Photograph and video all the rooms in the property for all advertising portals you’ll use
Prepare all the information you’ll need for the viewings
If you prepare thoroughly for letting a room this will save you lots of time and effort later trying to recapture the same information and will form the basis of future room rentals which will allow you to leverage your time from the get-go.
Create your advert. Use the acronym AIDA to formulate your advert –
You will spark the interest of a potential tenant by using a great strapline or unusual feature in your advert. Keep their interest with an appealing and well-written advert. Increase their desire by describing how they will benefit from living in this property and then create a call
to action to encourage them to respond.
In order to rent a room quickly, you have to reply to requests for viewings fast and promptly. As soon as you have interest from a prospective tenant, call them to arrange a time to view. Take their name, mobile phone number and email if possible. On this call ascertain the timeframe
for their move, their budget and their occupation. Once you have a time and date agreed, note this in your diary and include the telephone number of the person. When you carry out viewings you are ascertaining whether the tenant is right for you as well as if they want to rent a room from you.
If the tenant decides to take the room you need to take some form of payment to secure the room and remove it from any further advertising. You may wish to email them a receipt as confirmation and also confirmation of the tenancy. At this point take their personal details
such as name, current address, telephone number and email; their job and salary details; the details of referees and in what capacity are they known by the referee; and information about identification being provided.
5. MOVING IN
After all paperwork has been completed, spend some time explaining to the tenant what is required from them and what the rules and regulations are. Explain what they should do in the event of an emergency and your office opening hours.
Courtesy Call – A week after your new tenant has moved in call them, email them or text them to ask how everything has gone and check that they are settling in well. Any problems can be ironed out faster and any teething problems dealt with. You can reiterate your commitment to the standards they can expect (and outline your office hours too)!
6. MOVING OUT
When a tenant gives you their notice to leave, there are some simple steps to follow to ensure the move-out happens swiftly and smoothly and to ensure you have no hiccups and don’t face major maintenance issues.
To see the full version of ‘Tenanting without Tears’ and more of my easy to use suggestions for creating a high cash-flowing HMO business in my best selling book ‘101 Essential Tips for Running a Professional HMO – Giving you time, money and freedom’.
Currently available for Free (Just pay P&P). Visit http://www.101essentialtips.co.uk/ to claim your copy!