I read your articles and I like the golden information you constantly share. I have an HMO and my agent is struggling to rent it. I am thinking about self-managing, what tips can you give me to get the place fully occupied?
Mr P – West Midlands
You are in for a treat Mr. P, as I have a load of tips to get you 100% occupied. I like to consider myself as the master of renting rooms, and I have not come across anyone as creative in filling rooms like I do.
Let’s start from the beginning…
Step 1 – The product you are offering
For me, this is the most important factor. You need to understand where you stand in the marketplace. Is your property:
- Boutique style and high end
- Mid range
- Closer to budget range
Wherever you are, you also need to assess the competition and understand their offering.
Step 2 – How to master your adverts
Whenever I create an advert on platforms such as Spareroom, Gumtree, Openrent etc, I always create an advert which will instantly want the viewer to Call to Action. In order for them to do this, I will create an advert and assess it from 2 points of view.
Prospective No 1 – The Landlord
- Has the property been dressed and well maintained?
- Have I taken good enough photos?
- Have I paid attention and put lots of detail in my advert selling all the benefits?
- Have I listed all the points of interest in the local vicinity?
- Have I created a mini video of the property also interviewing a few of the tenants – how does this come across?
- Would I live here?
Prospective No 2 – The Potential Tenant (The Customer)
- Does the property look attractive?
- Is the property competitively priced?
- Why would I choose this property over all the others in the area? (I will elaborate on this in more detail)
- Could I live with these people?
- How much does it cost to move in?
After the advert is created, I try and sit there with 2 hats on – one being the owner and the other being a prospective tenant and seeing if I can pick holes in it.
It may sound weird, but I also like to assess the advert from a psychology point of view. I ask myself:
- How did the advert make me feel? Was it too pushy or too salesy?
- Does the advert really sell the benefits of the property?
- Would I click the request for more info or call the landlord button?
I personally have found that creating a mini video of the property and uploading it to platforms such as YouTube and Vimeo help as you can embed and share the links in your advert. Where the other 99% of the competitors are simply uploading photos, a video can really make a property come to life.
It allows a tenant to have a walk-through of the property without actually having to visit it. From the landlords’ point of view, it will also generate a serious level of interest, as the people who have seen the video are the ones who can imagine themselves living in the property.
A mini tenant testimonial also goes a long way.
If your tenants are happy to, get them to record a mini testimonial sharing their experience of them living in your property. Have they:
- Been treated well in your property?
- Has the property been well maintained?
- Have they been harassed by the landlord?
- What makes the property such a nice environment to live in?
Tenants are very skeptical of landlords, as there are many horror stories of slum landlords who do not maintain the properties and tenants living in sub-standard conditions. However, a short video – generally 2-3 mins from the current housemates will give any prospects a positive feeling about the property and will also visualise living there.
Step 3 – Incentives
Let’s face it – if you have rooms which are vacant at the start of December, the chances of you filling them now are getting pretty slim. The whole world is starting to gear towards spending their hard-earned money on gifts and presents for Christmas not to mention the parties the festive season brings. However, not all is lost yet. With a little creativity, you still stand a chance. Here is what I do to bring in the last-minute tenants, and make you stand out from your competitors.
Consider taking a homeowner guarantor instead of a deposit – I stop taking deposits when the government decided to protect them in deposit schemes. Instead, I ask everyone to provide a homeowner guarantor and it has worked out fantastically well.
Every person must have someone who can vouch for them – if not, it begs the question as to why not? Are they really that bad?
A guarantor can come in the form of:
- Aunty / Uncle
- Boyfriend / Girlfriend\Best friend
- And so on….
My criteria are quite simple, they must own the property they live in and have proof ie a mortgage statement. If the property does not have a mortgage, they provide ID which will be matched against the land registry title for the property.
The way I see it is extremely simple. A deposit for a room in an HMO is generally around a month, therefore around £400. If any damage were to be caused in excess of that amount, I would still have to chase the tenant. However, with a homeowner guarantor, the amount could be endless. We have a person with an asset who has confirmed that they will deal with any damage or monies owed.
Since doing this, should a tenant default, a simple call to the guarantor informing them of my intention to start to recoup this amount which would generally also blackmark their credit file, I have found, the arrears are cleared within 48 hours.
It really is as simple as that.
From a marketing perspective – if your competitors are asking for :
- 1 Month deposit
- 1 Month rent
- Reference Fee etc
In comparison to yours =
- 1 Month rent
- Guarantor (Costs nothing)
Instantly you appeal to the masses, as you have lowered the barrier to entry. You then have the choice of people and pick the best of the bunch.
There are other incentives you could offer such as:
- 1st month half price rent
- Deposit installments (if you wish to take a deposit)
- Just to name a few
Step 4 – Calls & Viewings
In all the years I have been letting out properties, I have found that the majority of calls come when I would prefer to spend time with my family. This means that calls come in the evenings and weekends, and in order to keep the places filled, you would need to take the calls.
From my experience, I have found that this is where some agents fail – as the agents are closed in the evening, they generally chase back up the next day over to hit an answerphone – normally when the person is at work.
Over the last few years, I decided to remove myself from the equation and tested putting the telephone number of a head tenant of the property, which had the vacancy. I met with my tenants and asked him if they would mind taking calls and also conducting viewings from any people who were interested.
As the person taking the calls also lives in the same property, they have the ability to answer a lot of the questions about the property and also can accommodate viewings in evenings and weekends, allowing me to spend time with my family and friends.
After the viewing, the head tenant would call me and provide feedback and ultimately give me their gut feeling about the person. I always ask, if they could envisage living with that person and whether they would be a good fit for the property. If the answer is yes and yes, I would call the prospective tenant and provided they were interested in the property, I would then arrange to meet them.
I pay the head tenant for every let and also a small deduction in the rent for taking the calls – it really is a win-win for everyone.
Step 5 – Management
Those that know me, will also know that I run a very tight ship. I do not self-manage; however, I do not also give my properties to letting agents. I have created a hybrid system that has made a lot of tenants my HMO managers.
The head tenant, I mentioned above who take my calls and conduct my viewings also act as my eyes and ears on the ground in each property. I always ask all the residents in each property to first contact the head tenants in the property to report any faults/issues, which will then get reported back to me by my trusted source.
This has removed me from being contacted by hundreds of tenants and only by the head tenants. Of course, if there is a major issue, the tenants still have my number by the protocol is to speak to the head tenant first.
Again, to incentive the head tenant to ensure all is in order, we give them a discount on their rent as opposed to cash for their service, as ultimately you would be employing them.
We also have communication channels such as Whatsapp groups that are monitored by my office staff. If there are any maintenance issues, tenants can also log it on there, where the maintenance staff can also access it.
So, there you have it. An article full of golden nuggets as to how to fill your properties and maintain full all year round. Once you have the system set up and tenants taking calls and conducting viewings, you will see the benefits and the freedom you will have created for yourself.
Enjoy the journey.