As a landlord you want to maximise your investment in your HMO properties, whilst providing good accommodation for your tenants. With 35% of households living in social or private rented accommodation, there is good demand for rental property, but attracting a certain demographic and investing in your property takes careful consideration to ensure you get a return on your investment.
In this blog we look at the 12 ways landlords can add value to an HMO rental property and appeal to their ideal tenants, whilst keeping an eye on the budget and yield.
Who is Your Ideal Tenant?
Although many of the points below will apply to all properties, it’s important initially to know who your ideal tenant is as this will help you think about how much you want to spend on renovations, the quality of items you might buy and the impact on the rental income and ultimately, the annual yield.
Landlords with HMOs are often targeting students or young professionals. These two groups of people are quite different as is the amount of rent they are able to pay per tenant. Being sure of which group you want to target will help you to know how much to invest along with the achievable rent after any work has been carried out.
Once you know who your target tenants are and understand what is important to them, you can decide how best to spend your budget to make improvements to maximise your rental income and return.
1. Redecorate
Painting is one of the most cost-effective ways to smarten and brighten up a property or individual room. Simply repainting the walls and going over the skirting board and doors can be enough to cover over those scuff marks from previous tenants and transform the look and feel of a room from one that is old and tired to one that looks a lot more loved and smart, making it immediately more appealing to prospective tenants.
2. Replace Flooring & Clean the Carpets
If you have areas where the flooring is tired and worn, it is best to replace it. Putting hard-wearing flooring down such as laminate or Luxury Vinyl Tile (LVT) is an initial outlay of money but is very durable and will wear well making it a good investment that still looks good years later.
This sort of flooring is advisable in the communal areas of HMOs because it is hard wearing despite the high footfall and is easy to keep clean.
Being able to advertise a property with new carpets or flooring also enables you to maximise your rental price and is very attractive to prospective tenants.
Where carpets have become dirty or have been stained, you may find that using a professional carpet cleaner can really refresh them and prolong the life and look of the carpet, without having to replace it at that point.
Providing a smart, clean and modern environment is also going to enable landlords to avoid tenancy voids and appeal to a greater number of potential tenants.
3. Modernise the Kitchen
The kitchen area is the heart and communal area for any HMO, so, it’s important that this room is modern and welcoming. Whilst refitting a kitchen is expensive it can make the difference from renting out a place or struggling to and really sets the tone for property.
With so many individuals using a communal kitchen, it is also the area that is heavily used and may need regular redecorating or investment to keep it looking good. However, giving new life to this area may be as simple as painting cupboard doors, replacing door handles, replacing worktops or retiling. Such investment is relatively small but makes a strong visual impression and enables landlords to continue to keep rents higher.
4. Refresh the Bathroom
After the kitchen, the bathroom is the next key room that many tenants find can make or break the decision to rent. Fitting a new white suite need not cost the earth but can transform the bathroom space into one that feels modern and light.
In HMOs where many people are using the bathroom and opening windows and ventilating the space after a shower may not consistently happen, mould can often form on ceilings and the silicon around the bath and sinks. Re-painting regularly and re-doing the silicone require very little money but make a huge difference to how the room looks. Plus, it protects the room and property longer term from leaks.
5. Improve the Kerb Appeal
Making sure that the property looks appealing from the road can be just as important to tenants as the inside. Make sure the front door is in good condition and painted as necessary. Cut the grass, weed the driveway, prune any hedges and hide or place the bins tidily.
Maintain windows, windowsills and gutters because small investments in these protect your larger investment in the property and can save thousands if kept in a good state of repair.
If an HMO property has a front garden, consider paving it so that cars can be parked on it, avoiding ugly tyres marks on any grass areas and making it a real selling point for young professionals with a car who would value off street parking.
6. Provide Everyday Appliances
Providing appliances is generally what tenants expect within an HMO so that no one person is responsible for buying or replacing them.
Having white goods that are considered a luxury brand may appeal to young professionals helping them to choose your property over another one and may enable you to charge more rent and really maximise on your investment.
7. Furnished may be the Way to Go
Offering your property already furnished could be the way to go. Although there is the initial monetary outlay, furnished properties command a higher rental price and therefore potentially a better yield to landlords.
However, it’s important to be sure of your target tenant. Students will be looking for certain pieces of furniture such as a desk and chair in their room, whilst young professionals probably won’t. Read about furnishing a student property and other aspects of being a student landlord in our Guide for First Time Landlords.
8. Tailor the Property for Students
If your HMO is specifically marketed at students, think about other things that would appeal and help them to choose your property. For example, plenty of plug sockets as well as USB sockets for laptops, phones and gadgets.
Where traditional properties only have one bathroom, it is a good idea to consider adding either additional toilets or ensuites. This is potentially a big outlay, so make sure you’ve checked with a letting agent as to the difference in rent that you can demand once the work is done.
9. Maximise the Number of Rooms
In an HMO property every additional room commands an additional monthly rental income. In older properties with larger rooms, it may be possible to build a dividing wall and create two rentable rooms out of one.
Before you commence any work, do check with a letting agent to be sure that the two spaces will be big enough to command the rent you are hoping to achieve as well as complying with any regulations on this.
10. Build in Storage
Storage can be an important factor for student and young professional tenants who often don’t have their own furniture. Whilst older properties are more likely to have built in cupboards, newer ones often don’t. Building in some wardrobes with features like sliding doors can really increase the appeal of your property over one that doesn’t.
If your HMO property is for students and is located close enough to the university sites that students can cycle, providing storage for bikes can also be another plus for tenants.
11. Maximise the Outside Space
Don’t forget to think about the garden. If it’s just a small patio area, make sure it is still an appealing space, and weed free. Add a modern garden mirror to reflect the light and make the space feel bigger, or a plant pot with a hardy plant.
If a garden has more space, think about adding a patio or decking area and creating a formal outside seating space that tenants can enjoy in the warmer months.
These areas also have the benefit of requiring relatively little ongoing maintenance but are popular with many tenants.
12. Increase the Energy Efficiency
In this time with ever increasing energy bills, rental properties with good insulation will be favourable with students and young professionals looking to manage their budgets. Investing in loft or wall insulation is also a good investment in an HMO property helping with potential damp areas and with government grants available, it’s a win win for landlords.
Advance Planning is Essential
Of course, maintenance such as redecorating and replacing flooring all take time to organise and have to be carried out in between tenants, so it’s important that landlords are organised and plan work and book any contractors in advance to keep any tenancy or room voids to a minimum.
Renovating and Hiring Contractors
Renovating and refurbishing HMO properties takes time, energy and skill. Doing the work yourself may not be an option and so hiring in the help of experienced contractors becomes essential.
Contractors can carry out the work quickly, within a given budget. Professional trades people will be accredited and will do the work according to current regulations giving landlords peace of mind it has been done properly.
Hiring contractors and planning work also enables landlords to know when work will be finished and enables the property to be available to rent in the shortest time possible.
At digs we’re able to help our landlords with renovation projects by recommending qualified and experienced contractors.
How much Rent Should You Charge?
Whilst renovating an HMO property to make it more attractive to students and young professionals is good, it’s also important to keep an eye on the budget and the return that any investment will yield.
Before any work is carried out, it’s a good idea to have a chat with your letting agent. Agents will know and understand the demands of your target tenants and the rental rate that you can realistically achieve post renovation.
Remember that rent is influenced not only by the condition of the property, but also by things like its location to the city centre and university or nearby transport links. Read more in our blog that looks at how much rent student landlords should charge.
Get the Maximum Rental Value with Abode
At digs, our team is here to support student landlords as they refurbish their properties and make changes. We’re here to advise and help you make the best investment, get the maximum return and secure the best tenants for you.
To discuss any of the above for one of your HMO properties, or are looking for a management agency, feel free to contact us on 0117 930 8750 or fill out our contact form and we’ll get back to you.
