As we own both Professional HMOs and Social HMOs, there is always turnover with tenants on the Professional HMOs. HMO Tenants are on the move. What are the most common reasons they may leave your HMO properties? How can landlords prevent these moves to keep good tenants, maintain consistent cash flow, and maximize cash flow?
Yes there are the outliers we have had,….We have had an attempted suicide….we have had a tenant get his girlfriend pregnant a country away……and of course tenants simply do not get along and one moves out. I learned from another HMO investor, before accepting a new tenant for a professional HMO…have them meet the other tenants and see if they get on. I think is absolutely brilliant. You want a quiet and long tenanted professional HMO in order to generate income.
Why I think tenants leave Professional HMOs
They want to move somewhere cheaper.
Housing costs, especially rents, have been rising for the last five years. Some are just at the point where it makes sense to move somewhere cheaper where renters can get a lot more for their money. It could be that local rents have just gotten too high—or maybe your rents in particular are too high. We try to overcome this by having high end ensuites on our Professional HMOs in Manchester.
Market rents change over time. Be sure you stay tuned into local trends, even when you aren’t actively looking for tenants. If neighboring properties are leasing for 30% less than yours, that could become an issue. Price your properties right. Invest in stable and upcoming locations with more room for growth.
Tenants need more space.
Between a growing number of couples and changing simply need more space today. A lot of people jumped on the minimalist lifestyle after 2008, but now, years later, they are tired of living so tightly and cramped.
Tenants don’t like their HMO roommates.
No one likes scary or abusive neighbors—and they are out there. This is something to keep in mind when searching and screening rental properties. It is also important to keep lines of communication open and to listen to these complaints. If there are problem tenants in your own neighboring units, you probably won’t renew their leases. If they belong to another landlord, you may want to preempt issues by contacting the other landlord.
We recently had an instance one tenant always walked around the HMO in nothing more than a robe. I mean nothing…no underwear. That freaked out the other tenants.
As much as professional HMOs can be very profitable, they need to be managed correctly. Answer tenant issues immediately and show them appreciation.
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