The more rooms you have rented out then the more money you’ll receive at the end of the day. It’s simple arithmetic. Therefore, doesn’t it make sense to try and let as many rooms as you can in order to make as quick a profit as possible?
On the surface this may sound like a good idea, but the reality is quite different. That’s because obviously, the more rooms you are renting out, the more tenants you have and therefore the more time you’re have to going to spend furnishing, carrying out maintenance obligations and collecting rent.
And, if like many budding multi-HMO property owners, you are already holding down a full-time job in another sector while your HMO business gets off the ground, then you will no doubt discover that there just aren’t enough hours in the day – or the evening for that matter.
So, it makes sense to take building up your HMO portfolio slowly, with all bases covered, and to make sure you are more than ready when that next big HMO investment opportunity comes knocking at your door. Otherwise you’ll find yourself drowning in paperwork, uncollected rents and, in a fit of pique and exhaustion, may just forget the whole HMO venture altogether – which would be a shame because there really is a lot of money and pleasure to be gained in successfully managing a portfolio of HMOs.
Maybe you are considering dipping your toe into the HMO market for the first time, or perhaps you’ve already taken that first important step and have already invested in your first HMO property. Buying a second then a third turns this property investing lark in a whole new ball game and means having to consider:
Where to Buy
As well as having done your research as to demographics and large employers/universities in the area, you’ll want your HMO properties to be within reasonable travelling distance of where you’re currently living. That’s because not only will you be popping over frequently to check on any maintenance issues and to collect rent, there’ll also be the initial furnishing and painting etc to be done.
How much time you have
Again, coming back to the issue over whether you have enough HMO properties to be able to afford to manage them on a full-time basis, it’s essential to work out how much core time you’ll need to devote to day to day management. And then there are the unexpected calls at night for maintenance issues or, if you’re unlucky, having to chase up unpaid rent perhaps even through the court system. Do you need to get an assistant in to help manage your burgeoning portfolio? Can you afford it?
Getting someone to manage your portfolio
Just as in buy-to-let property investment and letting, a number of agencies also specialise in HMO portfolio management. The benefits of handing over the running of your HMO investments means, of course, that you have more free time in order to pursue other commitments to expanding the business, such as looking for new properties to invest in or sourcing additional capital funding.
The agency you’ve signed up with will endeavour to collect rent, ensure maintenance on the properties is up-to-date, handle tenants deposits and advertise for new tenants whenever a room is due to become vacant so that void periods can be avoided as much as possible.
Another important aspect of HMO management is compliance with local authority legislation. This often involves annual checks and renewed applications and can be extremely frustrating and time consuming. Again, this is a part of the management process which you would expect the agency to handle.
What software is available?
As in just about every sector of industry out there, technology has also managed to speed up processes in the property world – not just in terms of being able to advertise an HMO more widely and at less expense via social media, but also in by helping you manage an HMO portfolio. There are currently several packages on the market which are worth looking at and can be assessed depending on how much you want to pay for a monthly subscription and how large your portfolio actually is; also how complicated you want the software to be.
Excel spread sheets are of course always handy but the new range of software is more interactive and will alert landlords to rent which has gone unpaid, as well as flagging up any new legislative changes etc. The main contenders are:
But you’ll find there are hundreds of software programmes out there. Just find the one which best suits your own needs.
Discover more tips and advice on HMO investing and management from our website Property Go-To Girl.
I'm Jacquie the Property Go-To Girl. I am passionate about property. I love to help people make the most out of their property investments!