Wouldn’t it be nice to own a property that you can rent out so you can earn passive income? That is the dream of many people. Unfortunately, just because you have a property for rent does not automatically mean tenants will come. When they do come, there’s no guarantee they’ll stay for long.
Each one of these scenarios spells a problem for you. Unless you can sustain a high occupancy rate, your HMO dreams might soon turn into a financial nightmare.
The sad thing is that it really isn’t that difficult to maintain a desirable occupancy rate. All you have to do is figure out what your targeted tenants want, how to get them to notice your HMO, and how to keep them from moving to a much nicer place. Here are practical tips on how to add tenants to your HMO to get more rental income.
Find your target market online as well as offline
Today, almost 50% of the world has access to the internet. Chances are great that your targeted market will be online at one point or another looking for the perfect place where they can move. It is your duty to present them with a solution whenever they log in. What you need to do here is figure out what kind of tenants you want to take up the rooms in your HMO and then find out where they hang out online.
For those targeting millennials, there is a good chance that you will find them on Facebook, Twitter or Instagram – basically, the most popular social media networks. If on the other hand, you want an older crowd of tenants (these are people who are almost guaranteed to give you consistent occupancy because they do not like moving houses too much), you can find them using their favourite offline publications such as newspapers and newsletters.
Do your adverts justice
Once you have identified the ‘watering hole’ that all your potential tenants visit from time to time, it is now time to tell them all about your HMO. The best way to do this is to place high-quality, well-detailed adverts in each strategic ‘watering hole’. These adverts should do the HMO justice. High-quality pictures, well-written descriptions and always be ready to answer any inquiries as soon as they come up. It is very much like trying to get your rooms occupied on AirBNB. Be responsive, place high-quality adverts with images and do not insult your potential tenants.
Your best Ambassadors are those who already occupy your HMO. Use these people to spread the word about how good living in your house of multiple-occupancy is and have them encourage people to apply. Of course, this will work best once you attach a bit of an incentive to the entire process. Maybe offer them a small discount on their monthly rent or give them a commission for every referral they enlist as your tenant.
Make sure the price is right
How much you charge in terms of rent really affects the kind of clientele you attract. If your HMO is not competitively priced, you might just be the only one living in it.
Make sure that you do your research and price your property competitively. I’ve mentioned before about PIN Meetings and the We Buy Houses Community Meetup events from guys like Simon Zutshi and Rick Otton. These events are held multiple times monthly in different locations. I find that talking with other investors is one of the best ways to get a feel for pricing in different locations.
You can even make the price just slightly below market value to attract more tenants. If you, however, want to make sure that the price goes up eventually, let them know that there is an introductory price that will change in a few months. This ‘introductory price’ will translate to a discount in their minds and it just might be the one thing you need to get people interested in your offer.
You have to stay in touch with what your target market wants in an HMO. If you can give them exactly what they are looking for, then they will come in droves and invite their friends to do so too.