HMO property management can make for a great way to maximise profits by instead of letting to a family the same property is let as a shared house to either students or working professionals.
A well run fully occupied HMO property can be a great thing. And for most experienced landlords they are. This has long been the holy grail of property investment with landlords working tirelessly to keep rooms occupied. But full occupancy is only half the story with many landlords being focused almost solely on keeping rooms occupied. What we are often surprised to find is just how many landlords neglect the running costs when providing accommodation on an all inclusive rental basis. We know utilities management can be a daunting or tedious prospect for landlords as part of managing a HMO property and the expenses can mount. However, armed with some real world experience, the business of managing costs for HMO tenants can be made fairly simple and really can improve your bottom line.
Simply looking at energy costs we can find some great ways of reducing outgoings. For example, did you know that electricity is typically as much as four times the cost of electricity per Kwh regardless of who your supplier is? If you’ve been heating your water with an immersion heater or even using it just as a booster from time to time, the chances are that you are simply flushing water down the drain (pardon the pun). By switching from heating water with electricity to gas this very simple change alone could save a landlord as much as £900.00 a year on a typical HMO property. If this is not enough to justify the thought of having to re-visit your HMO property management practices try looking at this a different way. £900.00 is the equivalent of generating two month’s extra rent a year from a room in an average Nottingham based HMO property!
By reviewing energy supplies on an annual basis it’s surprising what can be achieved here too. When was the last time you checked that you were on the best possible energy tariff? Have you fell on to your suppliers most expensive ‘standard tariff’ as a result of not signing up for the latest deal? Energy prices have reduced significantly over the last two years. Isn’t it time you took advantage of these?
As you can see there are some good opportunities to reduce energy costs. Rather than see this exercise as something of a chore try considering the extra profits that can be made by switching suppliers. But be careful not to be drawn in by the online comparison sites. Often these do not show the best possible tariffs as the site owners have a vested interest in selling utility packages from sponsored deals. Instead spend a little time talking to the top five suppliers explaining your needs to get the best overall result.
Are you considering investing in HMO properties as a means to generate greater returns? If so, feel free to give us a call today on 0115 981 8855 to find out more.
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