I’ve shared a Rick Otton video before about building a team to help you with the buying process of your property. But after purchasing your property, you’ll probably need another team if you don’t want to lose countless of hours managing everything yourself.
There are quite a few things you have to put in place to make sure that your HMO runs smoothly. For starters, you have to:
- Create a binding tenant contract that every incoming tenant should sign.
- You have to keep track of your income, expenditures and such for the sake of taxes.
- You have to file tax returns.
- You have to try and find new tenants to maintain a high occupancy rate.- You have to deal with the day to day concerns of your sitting tenants.
- You have to reply to inquiries and create adverts for your HMO.
- You have to make sure that the rent is collected in time and that the water and electricity bills are paid every month.
All these are examples of tedious admin work that quite frankly might not bring you much joy as a landlord. But without them, your operation may not run as smoothly as you would like it to. So, since they have to be done and you do not want to do them, what are your options?
Hire an agent
Quite frankly, the one solution that takes care of all this for you is to hire a letting or property management agent. These are the people who will make sure that everything runs smoothly and that your HMO is constantly occupied. But this costs money and most landlords would rather not share their hard earned cash with letting agents. So what else is there?
Streamline the process
You can set the whole system up in a way that requires minimal involvement on your part. In short, within your tenant agreement, make sure that the tenants know when what bills are due and that it is their responsibility to take care of them. Make sure that they are responsible for their own cleanliness and help them form a council that resolves any dispute by popular vote. This kind of system is difficult to create but if you get it right, you will almost never have to interact with your tenants or perform admin work on your HMO.
Hire a relative
By hiring a relative, we mean, give them a room for free in your HMO in exchange for services rendered. Basically, make them the building’s supervisor and task them with handling all of the admin work that comes with owning an HMO. You still might have to pay them a little for upkeep, but the bulk of the payment will be that they get to live in your HMO for free. This way, you look good in front of your family and you still get the admin work done by someone else.
To be honest, these duties cannot be entirely avoided without some kind of concession on your part. You will either have to part with some money to hire property managers or you will have to forego rent for one unit just to get someone to do it for you.