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8 Tips To Running A Better HMO

Estimated Read Time: 8 minutes

Editor: Mark Callacher

8 Tips To Running A Better HMO.

Renting rooms out separately to generate higher returns on a property is a great strategy to generate higher cash flow from a property. We have been running a successful House of Multiple Occupancy (HMO) business for over 5 years now and have a vast amount of experience. The correct property, correctly managed can net you over £1000 + extra cash per month. Here is are 8 tips to consider if you too, are lured by the prospect of high returning HMO’s.

1. Keep your property looking fresh

It is important that you have the cash and contacts available to keep your property looking well, the cost of which can be budgeted as an average into your monthly outgoings. If your property is tired you will struggle to rent rooms out at the rate you desire, this can be a slippery slope, as you become more desperate to fill the property you start to drop your price and possibly fill it with far from ideal tenants. I recommend regular painting of rooms and communal areas to keep them looking fresh and modern. Be aware of decorative trends, an annual wash with magnolia will NOT suffice!

2. Use good furniture

I was going to put this in within the point above, however I feel it is so important that it deserves its own section. Crappy, cheap furniture will make your property look crappy and cheap, it does not have to break the bank, however it should look clean and modern. Ikea is always a good bet.

If you choose to ignore this, you will be paying out for furniture again within 12 months, trust me, I am speaking from experience.

3. Keep your bills under control

Utilities will kill your profits!! – Unless you know how to measure them and manage them.


Take monthly meter readings and work out your actual costs, I also recommend taking a photo and emailing it to yourself as proof. It is your responsibility to keep an eye on your outgoings, in my experience utility companies will; overcharge you, will make mistakes, will become a headache, and will not be sympathetic to you as the landlord. The current push by the government to introduce smart meters will affect how you measure your utilities, hopefully for the better. Good measurement will also highlight any abnormalities, if electric is too high, perhaps your tenant has an electric fan heater on 24/7, if the gas is too high, perhaps you have a leak!

Managing your utilities:

Heating is probably your biggest bill, it must be restricted. There are many ways to do this depending if you have gas or electric, choose the method that suits you best. One of the most common is to place the gas boiler on a timer to control when the central heating comes on and off. Make the times clear in your contract or house rules.

4. Choose your tenants wisely.

There is a saying I heard early on in my property journey – ‘No tenant is better than a bad tenant’.

I chose to ignore this advice at my own peril, Now, I can’t agree more!

Unfortunately this is not a science, and long laborious credit checks etc will significantly reduce the amount of potential tenants available to you. If credit checks were the holy grail of identifying poor tenants then I would definitely consider paying the cost and time they take, however in my experience they are not. Identifying bad tenants can be a bit of an art that comes with experience, and even now, one slips through the net every now and then.

There are a multitude of reasons I prefer ‘no tenant’ to a ‘bad tenant’, one of my biggest concerns is the effect on other tenants, you could find very quickly that existing tenants want to leave, due to the behaviour of the ‘bad tenant’ you chose to give the benefit of the doubt.

5. Keep you HMO clean.

I recommend having a cleaner to clean communal areas at least every two weeks. However you must also have an active approach to dealing with messy tenants, it’s the biggest cause of discontent amongst tenants and can make your viewings become an embarrassing waste of time.

Some tenants (quite a high proportion) will leave dirty dishes regularly, will not clean the toilet, will leave empty beer bottles in the lounge every Saturday evening. Deal with them quickly and firmly, call them, explain your concerns and give clear consequences if it were to happen again.

6. Do not tolerate late rent payments.

If you tolerate late rental payments it WILL lead to more problems. If rent is not paid on the due date then this should be followed up the very next day with a call. Put the pressure on as quickly as possible and give a deadline for payment to be made. An official email/letter/text threatening further action can also work magic.

7. Advertise you rooms correctly.

An empty room should be clean, dressed and presented well, it should be posted on sites such as spare room and easy roommate. It amazes me how many landlords have a half decent room advertised, but through lack of care and effort the room appears to be a crappy, dingy, uninviting box.

8. Know your legislation.

There was probably a time when landlords could snub HMO regulation and get away with it, not anymore! Know your legislation, HMO’s and lettings in general, this industry is becoming more and more regulated, in some cases the regulation has clear benefits, in others cases I believe it to be nothing more than a money spinner for local authorities. Either way the law does not care for my opinion. If you do not know the legislation it can be quite easy to fall on the wrong side of the law.

If you follow these steps you are well on your way to running a successful HMO.

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