How to Maximise Rents in a Slower HMO Market

When the HMO market is moving quickly, it can sometimes feel as though you can put a room on the market and have several people interested almost immediately.

But what happens when the market slows down?

There may be more rooms available, tenants have more choice and suddenly landlords have to work harder to attract the right people.

This is when I think it's important to remember that maximising rent isn't simply about charging more.

It's about creating a property that people are prepared to pay more for — and, just as importantly, want to stay in.

Here are some of the things we look at when we're trying to maximise rents in a slower HMO market.

1. Do Your Research

The first thing is to understand what's actually happening in your local market.

Don't just look at what other landlords are asking. Look at what properties are actually available, how long they've been advertised and what they're offering for the money.

Compare properties like-for-like.

Look at:

• Room size
• Private or shared bathrooms
• Quality of furnishings
• Kitchen and communal areas
• Bills included or excluded
• Parking
• Location
• Broadband
• Outdoor space
• Energy efficiency
• Overall presentation

If somebody is offering a similar room for £50 less per month, you need to understand why a tenant would choose yours.

Equally, if your property offers considerably more, don't automatically assume you need to match the cheapest room on the market.

Know your competition, but don't be afraid to be different.

2. Don't Just Match Your Competitors — Exceed Them

One of the easiest mistakes in a slower market is to look at what everyone else is doing and simply copy it.

Instead, ask yourself:

"What could I do better?"

If your competitors provide a basic bedroom, can you provide a better-quality bed and mattress?

If their communal areas look tired, can yours feel clean, modern and welcoming?

If they offer limited storage, can you provide more?

If their rooms are poorly photographed, can you present yours properly?

You don't necessarily need to spend a fortune.

Sometimes it's about making the property feel better thought through.

The aim isn't to be the cheapest.

The aim is to give tenants a reason to choose you.

3. Focus on Quality

Quality matters, particularly when you're trying to achieve a higher rent.

A good-quality mattress, decent furniture, attractive lighting, useful storage and a well-presented room can make a huge difference.

And don't forget the communal areas.

In an HMO, tenants aren't just renting a bedroom. They're also sharing a kitchen, living areas, bathrooms, hallways and sometimes outdoor space.

If those areas feel clean, comfortable and well maintained, it contributes to the overall value of the property.

A tenant may be willing to pay more for a property that feels like a nice place to live.

4. Improve Energy Efficiency

Energy efficiency is increasingly important to landlords and tenants.

Improving insulation, draught-proofing, heating controls, glazing, lighting and other suitable measures can potentially make a property more comfortable and help reduce energy use.

For landlords, it's also important to understand the current minimum energy-efficiency requirements. In England and Wales, qualifying private rented properties covered by the MEES regulations generally cannot be let below EPC E unless an exemption applies.

But I think it's worth looking beyond simply meeting the minimum.

If your property is warmer, more comfortable and cheaper to run, that's a benefit you can communicate to prospective tenants.

And with energy costs being a consideration for many renters, a more efficient property can become part of your value proposition.

Just make sure any investment makes sense financially for the property and is appropriate for the building.

5. First Impressions Really Matter

You can have a fantastic property, but if the first impression isn't right, you may never get the opportunity to show it off.

Think about what a prospective tenant sees when they arrive.

Is the front of the property tidy?

Does the entrance look welcoming?

Are communal areas clean?

Does the property smell fresh?

Is the lighting good?

Are the photographs online representative of what they'll actually see?

The same applies to the viewing itself.

A prospective tenant is already comparing your property with others.

You want them to walk away thinking:

"I could see myself living here."

6. Add Value Rather Than Just Increasing the Rent

If you're trying to increase rent, think about what you can add.

It could be:

• Better furniture
• More storage
• A better-quality mattress
• Improved communal space
• Faster broadband
• Better lighting
• Outdoor seating
• More attractive décor
• Improved security
• Better kitchen facilities
• Private bathrooms
• A cleaner and more organised property

Not every improvement will justify a rent increase, so it's important to look at the numbers.

But if spending £500 on improvements helps you achieve an additional £50 per month, for example, that's £600 additional annual rent before considering costs and other factors.

The important thing is to understand what tenants actually value.

Don't spend money simply because you think something looks nice.

7. Keep Your Tenants Happy

This is probably one of the most important points.

In an HMO, tenant retention matters.

Every time a room becomes vacant, you potentially have lost rent, cleaning costs, advertising costs, viewing time and administration.

So sometimes the best way to maximise your rental income isn't to increase the rent.

It's to keep good tenants for longer.

That means responding to maintenance issues, keeping communal areas in good condition, communicating properly and making tenants feel that their concerns are being listened to.

People don't expect everything to be perfect.

But they do want to know that when something goes wrong, somebody will deal with it.

8. Make Shared Living Work

HMO tenants are sharing their home with other people, and that can bring its own challenges.

Good management can make a huge difference.

Clear house rules, sensible communication, good cleaning arrangements, appropriate rubbish and recycling facilities and well-maintained communal areas can all help.

The better the shared living experience, the more likely tenants are to stay.

And that's important because a high rent isn't much use if you're constantly dealing with empty rooms and tenant turnover.

9. Don't Compete on Price Alone

When the market slows, the temptation can be to reduce the rent immediately.

Sometimes that is the right decision.

But before doing that, ask yourself whether there is something else you could improve first.

Could the photographs be better?

Could the room be furnished better?

Could the communal areas be improved?

Could you offer something the competition doesn't?

Could you improve the viewing experience?

Could you explain the benefits of the property more effectively?

Price is only one part of the decision.

If you can create a property that offers better value, you don't necessarily need to be the cheapest.

10. Think About the Whole Tenant Journey

For us, maximising rent isn't just about getting someone to sign an agreement.

It's about the entire journey.

From the first online enquiry, to the viewing, to the application, to moving in and then living in the property.

Good communication at every stage can make a difference.

A prospective tenant who feels looked after is more likely to have confidence in the property and the landlord.

And once they're living there, continuing that level of service can help retain them.

The Bottom Line

A slower HMO market doesn't necessarily mean you have to accept lower rents.

It means you need to be more strategic.

Research your competition. Improve the quality. Add genuine value. Make the property energy efficient. Focus on first impressions. And, most importantly, look after your tenants.

The landlords who understand what tenants want and deliver a better overall experience are more likely to stand out.

And sometimes the best way to maximise your rent isn't to charge the highest price in the area.

It's to create a property where tenants think:

"I'm happy to pay that because I'm getting good value for my money."

That's the difference between simply putting a room on the market and actually creating a successful HMO.