How Long Can You Expect Tenants To Stay In Your HMO?


how long should your lease be, lease contracts for tenants, long term lease contracts, short term lease contracts


There are very many differing views as to how long a landlord should expect tenants to stay in their HMO. Some believe that longer lease terms serve them better while others think that shorter ones are more prudent.

As is the case with most subjective matters of your own business, the answer lies with your individual goals as an HMO owner. Let’s look at some of the arguments surrounding this matter.

Why tenants should have shorter lease agreements

Lease agreements can range from one month to as long as five years depending on the kind of understanding you have with your HMO tenants. There is a school of thought that supports longer leases while there are those who oppose it. Today, most landlords prefer shorter leases for one main reason: they have the option of getting rid of problem tenants sooner.


hmo investing, legal concerns in hmo, hmo propertyThat is the single most often identified reason for shorter leases. Truth be told, no matter how much you run background checks on your tenants, situations change. Someone who has a history of being a good, well-paying tenant might see their circumstances change for worse.

This will, of course, put some strain on their finances and as such, they may end up being problematic tenants. In this case, you will need to get rid of them sooner, however cold that might sound. But if you offered them a 5-year lease term based on the fact that they were historically great tenants, then you might have an issue at hand.

With a shorter lease term – say six months, you can take the time to observe how the tenants behave and decide whether or not you want to renew their agreements. It is advised that after six months, taking on a month-by-month agreement is just as well.

Argument for longer lease terms


The strongest argument for longer lease terms involves tenant turnover. If you are using an agent to keep your HMO full, then you have to consider the fact that there are fees to be paid every time a tenant moves in and out. You also have to pay for:

  • Vacancy advertisement.
  • Repairs to the room.
  • Cleaning and maintenance.

There is also that period where the room might be without a tenant as you wait for someone new to take it up. All this will cost you money. In fact, it is estimated that the process of acquiring a new tenant can cost up to 25% of your rental income. This is not something that most landlords are fond of at all. So, to avoid it, they would rather risk it and offer longer lease terms.

Perhaps, a good way to make more informed guesses is to attend property meets. I’ve mentioned Pin Meetings of Simon Zutshi and the Community Meetups from Rick Otton before. Many who come to these events are landlords and they may give you insights about their tenants. This will give you a general idea of what the culture is like in certain neighbourhoods.

How long should you expect your HMO tenants to stay?

This will depend on what you want with your HMO. The average lease term goes for about 6 months. But if you find excellent tenants who are looking to put down roots, then you may even have a tenant for years to come. Typically, however, a month-month agreement or a 6 months agreement is the industry standard.

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