HMO Tips For Self-Management—HMO Property Tenants
Hey, I’m Samuel Leeds, and today, I want to talk about HMOs.
In particular, I want to talk about self-management HMO, for people who are managing their HMOs by themselves.
I think a lot of people know the advantages that come from HMOs, such as:
- Cash flow
- Getting rents from other tenants in void periods
- More cash flow!
Of course, there is Article 4, where you get automatic planning permission, and it pushes the value up.
Answering Important Questions On HMOs
One of my students from the Academy, Ella, asked me a few questions regarding HMOs, and I thought of making it in a video to not just share with her, but with you guys as well!
Here are the questions she asked me:
Q: How do you reference-check against prospective tenants?
Reference checking is extremely important when you’re bringing in tenants. When I was self-managing my HMO, I made sure all my tenants were professional and I reference checked them. So, you need to make sure you know your target audience and are checking their reference.
You may ask for their credit history, and get a reference from their previous landlord—I repeat: their previous not current landlord.
If they have a bad credit, you may have someone from their side as a guarantor. A guarantor may pay the bill/rent when they can’t. You also need to reference check the guarantor.
These checks aren’t that expensive either. You can reference check people for 25 pounds (it was this value back in my day!).
Q: What tenancy deposit scheme did you use?
I didn’t collect deposits when I was managing my HMO. The reason why I didn’t do that was because you have to register them, and you have to pay to register them. So what I did was, I used no-deposits as my selling point. I told people they could stay in my HMO and they wouldn’t need to give a deposit for it. It meant less admin for me, as well as a good selling point.
You can always take deposits from people and register them at deposits.co.uk; however, when you reference check people before bringing them in, you won’t need a deposit because they won’t be likely to trash the place.
Q: Did you include the price of bedding in the charge of the room, or let them bring their own bedding?
I would include bedding and soft furnishing for the viewing and pictures for advertisements, etc. but I would tell the tenant that they could buy the bedding. Because maintaining the bedding was a huge hassle for me!
Q: What length of tenancy do you use as a standard? Six months length and then rolling, or six month at a time, or longer?
I wouldn’t ask people to sign another contract for six or twelve months after their stay has ended because nobody wants to stay at an HMO for that long, and it may just ruin everything. People, on average, usually stay at an HMO for six to eighteen months.
So, I would tell them that there would be no minimum stay, literally a monthly rolling contract, but I wouldn’t move someone in unless they planned on staying for six months.
The reason why I don’t ask people to sign a six-month or twelve-month contract is because it puts people off. I’ve had people stay in my HMO for six years, and they initially planned on staying for six months! I never asked them to sign a contract for six or twelve months, just a monthly rolling contract, and it worked pretty well.
Hopefully, you found this blog helpful and would use the information given here for your own HMO.
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