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I am often asked what the best approach is to take in order to source HMO’s. Unfortunately, there is no magic answer, but the key is consistency. Whether you use one of the below methods or all of them, the harder you work at it the more likely (or more quickly) you are to realise results.
Here is a summary of the basic methods:
The good old traditional method! Estate Agents have the marketing and the know-how to source properties so leverage their know-how. They are also the first to hear about the vast majority of properties in your area and so this (for me) is the most important area you need to focus on -its worth the time and effort, and it does not cost anything.
Here are some tips in dealing with Estate Agents:
Visit each agent in person and explain what you are looking for. These days most Agents will know what an HMO is, but they won’t necessarily know what to look for, so you need to educate them.
Most agents will simply want to know what your maximum budget is and the number of bedrooms you require. Elaborate on this by giving them additional information for example, and property with space to the side to extend, or any property with four bedrooms and two reception rooms etc.
The key to working with estate agents is relationships – and a relationship will grow with a consistent approach. Keep in contact regularly. Call each agent every few weeks, go out on viewings with them – even if you know the property they are showing you might not be right – its all about relationship building. Most importantly, always give feedback. Agents need to understand what you are looking for and feedback is a crucial element so that they can develop this understanding. So, even if its just a few bullet points be sure to feedback to them on each property they send, and each property you view.
Finally, seek their advice! Agents are experts so treat them as such. Harness their expertise on things like which areas should you target, which areas should you avoid, which areas have high tenant demand etc. Agents are a source of invaluable information and most are very happy to share, so never be afraid to ask.
Be consistent – use your diary system to ensure that you are keeping in contact regularly.
If you employ a consistent and regular approach, the process will reward you with opportunities.
It is a legal requirement that councils retain details of every HMO in their area. This includes the address of the property and – crucially – the name and the address of the owner.
So write to them! You may come across an owner with a tired property who wants to sell – perhaps an accidental landlord or someone who has had enough of running a rental property am who would consider selling.
Contact local council and obtain the list. It is a legal requirement they give you access under the “Freedom of information” act. Some have the information readily available on their websites.
Others will send you the list of you ask for it
Create a short, well written letter explain that you are interested in purchasing suitable properties in the area.
Approach a full service direct mail company – there are several of them – We have used DocMail in the past. They will charge typically between 50p and 70p to create your list and send the letters on your behalf.
Some councils have several hundred registered HMOs on their records and writing to all of them can be cost prohibitive. I would suggest that you do need to write to a minimum of 100 to make it worthwhile, with anything above this number being bonus. We aim to write to 500 and we do so every 6 months.
You may have to do two or three rounds of letters before anything meaningful come back and certainly you will have a lot of enquiries that may not be suitable for you. However if you are consistent the process will reap rewards – one of your letter will arrive in front of the right landlord at the right time with the right property.
It’s a fairly expensive process, but the financial commitment will be worthwhile once it starts generating results.
Once you get to know your target area, you will some become ofey with certain streets that have housing stiok that works well for conversion to an HMO. Prepare a well written and brief leaflet explaining that you are interested in buying property in that street., and engage with a service provider to drop the leaflets off. Or, if you have time, do it yourself – you might get talking to some local residents – you will be amazed with what engaging with the local community can achieve.
As with the above process, consistancy is key so make sure that the leaflets are dropped regularly. It is unlikely that one leaflet drop will generate results but if you do it every few months it will only be a question of time before the leaflet drops in front of the right person at the right time.
Facebook – create your profile. Join local Facebook groups in the area. Regularly post on the groups explaining what you are looking for. If there are certain property types you are interested in, or specific locations you are keen on, then include this inf9rmation in your post. Someone might no someone who might no someone etc. The benefit of this approach is its completely cost free. It only takes a bit of time to keep your posts regular.
Visit local property events, and join social media property groupgs. There are bound to be property sources in your area who will engage in most of the methods above as a full or part time job. Use their services! They are particularly useful if you are “time poor” as they will effectively do all the work for you. The disadvantage is they will charge a fee for finding you a property -which can be several thousand pounds – but if there is normally no commitment to pay anything until they find the property so it can be a win win outcome for both parties.
Like estate agents, they will understand what an HMO is but they will need educating on your specific requirements. Be prepared and willing to invest time and energy in building relationships with sources, and in so doing educate them as to what you are looking for.