Tenanting without Tears – How to fill your HMO rooms!

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.Finding tenets for 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!

 

FINDING TENANTS
There are five steps to finding tenants:

1. PREPARING

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.

2. ADVERTISING

Create your advert. Use the acronym AIDA to formulate your advert –
 Attention
 Interest
 Desire
 Action
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.

3. VIEWING

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.

4. SECURING

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!

Buy to let is dead. Right?

Well, maybe Buy to Let in its traditional form is dead! Certainly buying in your own name, putting down a reasonable deposit and then a few months or years later refinancing all of your money out is something fewer and fewer investors want to do now. We have George Osborne to thank for that.

Investing in Buy to Let has seen a huge amount of change in the last few years, with new legislation that impacts financing, as well as property tax changes which, has left many landlords questioning if Buy to Let is still a viable investment strategy. With that said there is still a huge demand for rental property and with ever increasing ‘transient’ lifestyles people want flexibility, gone are the days when people what to live in the same house for 40 years!

Our first HMOIf you have been wondering what is the alternative, and how you can make your money work for you, I’d like to suggest House of Multiple Occupation are one way you can address this problem. We hold a number of personal B-T-L properties but a few years ago realised that there were other strategies we could use. When I discovered HMOs I raved on and on about them (in only the way a demanding wife knows how to do) and eventually Andy said ‘OK, let’s give it a go’. That was our very first 4-bed Mini-Mo and since then we have not looked back!

If you don’t have much money to invest, or you are concerned about whether this strategy will work for you, then I’d like to invite you to my NEW and IMPROVED HMO Fast-Track Live Event on 14th October in Birmingham. I’ll be sharing with you how to get started with very little of your own money and LOADS of case studies about how you can make huge profits and BEAT THE TAXMAN!

In this jam-packed and interactive workshop, you will learn how to:

  • ANALYSE an area to invest in for long-term cash flow and growth
  • UNDERSTAND the process of a refurb to create a wonderful HMO home
  • SELL rooms effectively so you avoid voids!
  • MANAGE the investment so it becomes HANDS-FREE
  • LEVERAGE your time so you can rinse and repeat!

 

With a mixture of fun, interactive exercises & relevant examples of REAL HMOs, I will share my tried and tested systems to ensure you grow your flow with HMOs. So are you ready to go on your own HMO adventure?

YES PLEASE RESERVE ME PLACE!

 

The Insider Guide to Using Spareroom

*This article first appeared in HMO Magazine - The Go-To Magazine for HMO Landlords,
 Investors and Developers

Knowing how to get your goods to market is vital if your business is going to succeed, and this is no exception when it comes to renting rooms. When Spareroom (the UK’s largest flat-sharing website) was launched, it changed the landscape for HMO property investors overnight. There is an argument that it enabled the sector (particularly professional HMOs) to grow exponentially as it allowed landlords and investors to have an immediate and interactive presence on the internet. Even if they had no website, marketing strategy or smartphone, the power of Spareroom was that it removed the pain of advertising for landlords, placing any room directly in front of a willing and ready buying audience.

Spareroom website screenshot.
https://www.spareroom.co.uk/

Since its inception in 2004 Spareroom has continued to be top of the room-renting listings portals and has developed additional features and benefits for both tenants and landlords. There are a number of aspects of which you may not be aware, and in this post, I want to share some of those functions which may help you reduce room voids and increase your profits – particularly if you are not familiar with some of the newer and more dynamic features of the site.

Reduce room voids and increase your profits

Spareroom is an online environment which changes daily. It is a site where prospective tenants and aspiring landlords create profiles and upload photos and videos with ease.  They get over 2 million visitors every month – that’s 11 times the circulation of the Guardian. Much like online dating, there are constant matches, suggestions and recommendations being made to tenants and landlords. Unless you are aware of the speed at which the site can change, you will probably miss out on potential tenants who could be ideally suited to your property.

Be active not passive

Unlike many marketplaces where you cannot see your customer, Spareroom helps connect you directly to people who may be interested in renting a room. In a busy marketplace where choice abounds and there are a number of good looking rooms to choose from, what sets you apart from the rest? Research tells us that tenants prefer to rent from private landlords or people that they feel they can connect with, and who they feel care about them. They don’t like to be treated just like a number (well who does)? They also stay longer in properties where the landlord takes maintenance, customer care and service seriously and puts tenants’ needs first. So rather than waiting for prospective tenants to contact you, you can carry out a search for your ideal tenants on ‘Rooms wanted’ by typing in your chosen location (i.e. the location of your HMO). This will bring up a list of people who are looking to rent in your area, along with their budget. Send them a friendly message, inviting them to arrange a viewing of your property (along with a link to the advert). This also allows you to decide on people who look like a good fit with your property and ensure they meet your requirements. The personal invitation to view is a great way to demonstrate your proactivity. Make sure you read their preferences first though otherwise it won’t look as if you really care if they’ve stated they want a large double ensuite room and all you have to offer is a single with a shared bathroom!

 

Statistics and measurement

One of my maxims in life is ‘Treasure what you measure and measure what you treasure’! If renting your rooms is valuable to you then it’s crucial to know how that well-crafted and beautifully photographed advert is performing (and if it’s neither of these please see below for further help and advice)! When you log into your account go to your advert management page (where all your ads are listed  – called ‘My Placed Ads’). Halfway down you will see a small box named ‘Featured Ads’ and there is a clickable link- ‘Settings and statistics’ which shows the number of times your advert has been seen and clicked on in the previous week (or chosen period of time). One of the key components in keeping your advert at the top of the listings is how often you edit it, and how many click throughs you receive. Keep your advert fresh by occasional edits, changes and re-wordings. Ensure the photos show your rooms off to the best possible standards and please, please, please dress for success! Above all, don’t let your advert languish. Otherwise your clickthrough rate will rapidly diminish and you’ll end up on page 9. Where no-one goes …

If you are still struggling to get enough views of your advert, here is a brief explanation of the ways to upgrade and boost your chances even more:

 

Advertising Upgrades

Three additional services that you can upgrade to are:

  • Early Bird
  • Bold Advertising
  • Featured Advertising

 

Early Bird status allows all new prospective tenants to see your advert as soon as they log in or create their profile. [Named Early Birds by dint of paying extra to see new adverts first. It doesn’t mean they are early risers – please don’t confuse the two]. If you have not paid for Early Bird status it will be a few days before your advert is placed before new tenants, losing you time and valuable viewing opportunities.

Bold Advertising enables your ad to be displayed with a lovely blue border around it this differentiating it from the standard grey border, and enhancing the placement of the listing.

For these services you can pay for a monthly, 3-monthly, or annual fee for a defined number of property adverts. If you wish to add further properties to the Bold Advertising pass this is possible too. Usually, Early Bird and Bold Advertising are purchased together.

Featured Ad status is a pay-per-click service. This works on the basis of a bid price which is calculated by Spareroom’s internal algorithm. It takes into account the number of rooms available in your locality, the level of competition for top advertising space, and the number of potential matches for your advert. As I mentioned earlier, Spareroom is a dynamic advertising environment which means that there can be rapid transactions taking place simultaneously. You can find that one day the cost to place your room advert at number one position is 80p and then a week later, £1.20. To understand the way Featured Ad status works and how to get to number one position, you need to go to ‘My Featured Ad’ page (which you get to by clicking on ‘Settings and stats’)  accounts management page and click the tab named ‘Rankings’. Here you will be able to assess the current ranked status of your advert and decide how much you are willing to pay to be at number one in the rankings.  You can then decide how much to pay for the privilege of number one position by going to ‘Individual Ad Bids’ (on the same page).

 

It is worth considering Featured Ad status if you have one particular room that you’re finding hard to shift. Avoid having a number of adverts all featured at once, or you’ll find you are bidding against yourself and then having the difficult choice of which one to prioritise.

Otherwise, remember the tips above to keep your advert fresh and current to raise enough interest to rent your room.

 

Information and advice

Spare room recognises that the site has many facets and if you are new to online advertising you may need some additional advice and help. If you click on the ‘Info and advice’ tab in the top right-hand corner of the site you can gain further access to useful information and examples about how to improve your advert, how to create a video, how to describe your room, how to market your property effectively, and much more.

 

Spareroom is a marvellous resource if you know how to use it. But it can be overwhelming and confusing too! For a free webinar with further information about ‘How to Harness the Power of Spareroom’ please visit my website www.hmosuccess.co.uk and register with your name and email address.

Free webinar insider guide to Spareroom
Free webinar insider guide to Spareroom, register now!

 

 

 

Generation rent

[This article was written in January 2015]

Wendy Whittaker- Large blog
Over the last few weeks, my DH and I have spent many happy hours discussing the state of the UK economy and the world economy (as you can tell we live exciting lives). These discussions have tended to take place over a leisurely Sunday breakfast when we are padding around in our pyjamas. Over a smooth cup of freshly brewed coffee it makes for a relaxing yet stimulating start to the week!

Although neither of us has studied economics to any great depth, we both have a good grasp of certain key economic theories which I think has helped make our investment journey a more confident one. I would definitely advise anyone involved in property investing to study the ‘Big Picture’ and understand what the economic risks and opportunities are within the world today.

One discussion we  recently had was around what is often termed ‘Generation Rent’ – i.e. people who are unable to afford to buy their own property and therefore can only and possibly will only ever rent. [The phrase has also given rise to an active movement lobbying for more legislation to support tenants http://www.generationrent.org/]. However, I would like to widen the definition of this phrase to demonstrate that to a lesser or greater extent we are all generation rent – unless we take definitive action to change that status.

I still work one morning a week at the local University, which I regard as interesting, fun, and informative. I enjoy teaching and love the contact with students and I am passionate about my subject area (Early Years). So it is rather nice to find that also once a month I get a payslip and an accompanying deposit into my bank account. Aren’t I being rented once a week by the University? And my car is on a PLP plan  (personal lease plan) that means I don’t own it, but I can drive it nonetheless as if it were mine. And many of our buy-to-let mortgages are interest-only which means we are effectively leasing the properties to rent out to other people (the only additional benefit is that we get to keep any capital growth).

There are many benefits to renting. You don’t have to take full responsibility for the capital item if it goes wrong or needs certain repairs. If you want an upgrade, its fairly easy to transact (yes you may have to pay more per month but that’s the price of improvement). You can plan your finances much more easily and with certainty. There are a lot of benefits to renting. However, many people feel fearful and powerless when renting, They feel that they have few rights and no options. This is simply not true, particularly when it comes to housing. Let’s face it, if you are in a job, you yourself are being rented by your employer! If you can use the situation to your advantage, I can see that being rented and being a renter may actually end up being a pretty savvy way to financial freedom!