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Editor: Mark Callacher
Are HMO’s more stressful to manage than single lets?
Many people are lured into the HMO (house of multiple occupancy) strategy by their potential to deliver very high returns on investment. However I have spoken to many investors of late who say that HMO’s are just ‘too stressful to manage’.
Now whether or not something causes stress is subjective, it is internal, but unless you are a robot, I have no doubts that managing a HMO has the potential to cause you more stress than single lets, but if you overcome those potential hurdles, you will get your reward in the form of a higher profit.
Firstly you must take the correct steps to running your HMO correctly, see previous article I did on 8 tips to running a successful HMO.
So why do I think HMOs have the potential to cause more stress –
Problems become magnified.
In a single let you will receive a phone call/text/email and have one person to reassure, in a HMO you may have every tenant communicating the maintenance issue. I recommend using email for non-emergency issues, tenants will follow a path of least resistance when communicating. I would make it very clear that you do not expect to be communicated to, other than the way you have stated. Multiple forms of communication becomes disorganised and becomes problematic.
If the issue cannot be fixed within a day or so (perhaps because your trades person has let you down, as often is the case) complaints will also be magnified, your tenants seem to have the knack of forming a mastermind where they share their dissatisfaction about the unfixed issue, this inevitably brings up other issues that they see as needing to be resolved immediately despite it not being a particular issue beforehand.
Fix the problem within a few days, if you cannot, communicate this to all your tenants and if possible try to give a date by which the issue will be fixed.
The consequences of the big brother effect.
Just like Big brother and any other scenario in which human beings are in close quarters with each other, people will disagree, people will get on or not get on, and people will form and break romantic relationships.
This can be difficult to deal with, and unlike big brother you may not be able to evict someone for just being socially awkward!
Some issues will resolve themselves, however if the property becomes intolerable to live in, due to the relationship with other tenants – it is your problem!
I have a list of different example scenarios as long as my arm, the best generic advice I can give on this is, communicate, a sympathetic call can go a long way. If there is a particularly awkward tenant then they have normally broken some type of house rule to piss other tenants off! Or even broken your tenancy agreement, Use this as leverage to enforce consequences of continuing their behaviour. Common themes of discontent are cleanliness and smoking.
If a tenant starts to behave erratically or creepy you must address the issue swiftly, and don’t be scared to call in the police should things get out of hand, I also advise tenants to call the police if they ever feel threatened or unsafe.
I am lucky in that I can often offer a tenant another room in another house, however you may have to decide whether to ask someone to leave or not.
People often ask why we do not use letting agents to manage our HMO’s, this is the biggest reason, I have yet to find an agency who can cope with the demand of shared living and in particular managing the people within the property.
Communication goes a long way; sometimes issues cannot be resolved immediately, communicate with all involved, if you ignore it, it becomes your problem sooner or later!
Responsibility (or rather, lack of)
The majority of HMO tenants take responsibility to keep the property clean and report maintenance issues, the problem is, it only takes one tenant in each household to make your property seem uninviting and messy! One of the biggest issues our property manager has is deciding who is responsible for certain issues such as unwashed dishes or dirty bathrooms, if it were a single let with a problem, we know exactly where the blame lies, and we can put in the appropriate consequences.
Placing bins out on the correct day can also become problematic as no one tenant wants to take responsibility for it, consider reducing the rent for one of your tenants to place the bins out weekly/biweekly or even tri weekly as some councils are now suggesting!!
This lack of responsibility can quickly escalate, it must be squashed as soon as soon as possible, otherwise it seems to spread like some sort of contagious disease (though wouldn’t you get tired of cleaning the bathroom after yourself just for someone else to mess it up after you!).
Emphasise responsibility before any contract is signed, make a point of saying it will not be tolerated. If, or when an issue does arise, squash it. Do not beat around the bush with politeness, be firm, and send a group text. You will find that people will start giving you names in which case you can decide appropriate action, or the problem will stop.
As mentioned in 8 tips to running a successful HMO, measuring and managing utilities properly is essential, otherwise you will find yourself placed on hold, pulling your hair out for an untold amount of hours trying to sort out issues.
So to sum up ‘are HMO’s more stressful to manage?
They have the potential to be, and in my experience they will do if you do not expect the above as part of ‘The Job’. In my opinion most agencies do not have the resources to manage HMO tenants effectively, but I’m sure there are a few out there, if you believe you know any I would like to know your suggestions, and if you want any more information on the above don’t hesitate to get in touch.
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