We have all dreamed of finding them; the ideal HMO tenant. Someone who is willing to pay above market rates in rent, always pays on time and sometimes even a few months in advance, takes good care of the place (preferably a DIY enthusiasts who handles their own repairs – with your permission of course), hardly ever has visitors, is clean and an absolute darling to the other tenants.
Honestly, this kind of tenant only exists in our fantasies as HMO owners. But, if we look hard enough, we can find someone who is nearly half as ideal but is close enough to make it worth our while. With that in mind, here are some of the traits you should be looking for in an ideal HMO tenant.
Major factors to consider when choosing an HMO tenant
Before you even decide who you want living in your house, you need to decide what is most important to you. Are you looking for people who are easy to manage, albeit more demanding but can afford to pay a higher fee as far as rent is concerned or are you looking for just anyone as long as the house doesn’t remain vacant?
If you fall into the first category, then you want to target professionals or people who fall within the social housing market. These are people who have jobs and are busy trying to get their lives together. They can afford rent and will probably be keen on keeping the place since it is near their workplace.
The second category is mostly made up of students. Almost always available but are rather problematic as far as rent is concerned. They will also almost always have some kind of visitor or party going on and are not so good at taking care of the place. But, if you just happen to own an HMO near a University or a College, then you will always have tenants.
The ideal HMO tenant
Prejudices aside, the ideal HMO tenant is someone who:
- Has a reliable source of income for the rent.
- Is keen on keeping their tenancy agreement going because they are there for a reason (work and school).
- Has a good tenancy history (more than willing to give contact details of their past landlords as references you can check).
- Is pleasant enough to talk to (if they can go through the trouble of being cordial during the initial meeting, they can be civil enough with the neighbours).
- Has no criminal record.
- Is upfront with his/her declarations (are they going to have a live-in visitor?)
- Respectful and inquisitive (someone who wants to know the finer details of the tenancy agreement just so they do not cross any lines).
- Someone looking for something long term but is amenable to periodic agreement renewals based on performance.
In many cases, you are advised to go with your gut feeling. Do is feel right when you meet this person? Do they seem like a genuinely nice person? Most importantly, can they pay?
If you’re a regular reader of my blogs, then you know I attend Investor Meet Up events from time to time. These are the best places to talk to other investors and learn how they find tenants. Some of them even give referrals (if they no longer have room to accommodate additional renters). The most regular events that happen monthly are the PIN Meetings of Simon Zutshi and the Community Meet Ups of Rick Otton.