Investor’s Guide To Find Tenants – HMO or SA

investors guide

Whether you are an investor who has already secured a Rent to Rent property or are still considering getting involved, acquiring tenants is a major component to the process. This is the step that turns the investment into profit. Understanding the different ways to easily find tenants can make the process less daunting. The preferred tenant depends on the type of property you are investing in: if the property is House in Multiple Occupation licensed or if it is designed for Serviced Accommodation. There are several ways to accomplish this, some of which are outlined below.

With both House in Multiple Occupation (HMO) and Serviced Accommodation (SA) properties, high-quality pictures have the power to dramatically increase the number of interested tenants or people who wish to stay on your property. Decently well-lit pictures of clean and orderly spaces within the property instills a sense of trust within the person who is considering staying there. Along with that, a good description of the property is essential to entice potential renters. This includes accurate details of the various amenities and rooms offered in the property and even including unique aspects of the property. Descriptive details about the location is also useful as most people base decisions on where to live or stay on the area the property is in. 

HMO properties are looking for long-term tenants who are most likely living on the property for a period of time. One of the main and easiest ways to find these types of tenants is by utilising social media platforms, such as Instagram and Facebook. Social media has quickly become a main line of communication and a go-to for information for users. This makes it a convenient starting point for reaching out to potential tenants. Both platforms offer paid advertisements that can be used to boost exposure to your available property. 

Specifically with Facebook, there are several potential ways to create ads to reach digital users. Boosted ads can be incredibly useful because it increases the amount of digital traction on the post. Suppose the investor creates a post about the prospective property looking for tenants. Utilising the boosted ad on this post will garner more interactions in the form of likes, comments, and shares than it would have organically. This is extremely beneficial to those looking to find tenants because the information is reaching a larger audicience, and therefore increasing the chance of finding an interested tenant. 

Promoting posts on Facebook is also extensible to Instagram. Doing so would allow your tenant-search posting to reach audiences on both platforms, even if they do not have both. This permits someone who has Instagram, but does not have Facebook, to be exposed to the listing, expanding the number of potential renters. Overall, any boost in engagement on the property listing post or page will reap benefits.

Additionally, one exclusive aspect of Facebook is that it has group and community chats that allows users to join and connect based on a mutual interest or specific topic. Joining a landlord or renting group chat for the desired area is another efficient way to find tenants. There are several groups that allow possible tenants to specify what sort of characteristics in a rental they are looking for and investors or landlords to promote their available listings. This makes the process of connecting tenant to landlord, and vice versa, much simpler.

Furthermore, using different renting service websites can be extremely helpful in procuring tenants. OpenRent is a popular service that allows landlords to list their property online. OpenRent offers partnerships with other listing services, including Rightmove, Zoopla, and PrimeLocation, (depending on the subscription package chosen by the investor) to optimise the property listing and have it reach the largest number of interested people as possible. If you are just interested in advertising on OpenRent only, it is free to list. As an investor, the quicker you can find a tenant, the better. The OpenRent service positively boasts a four-day average turnaround for securing a tenant. 

Another well-known listing service site is SpareRoom. SpareRoom offers advertising on their website only, but has a large database of over 12 million registered users and 2 million site visitors each month. As an investor, you can always list your property for free, but have the option to upgrade your advertisement type if you wish. Both websites are great options that offer convenient and efficient lines of communication between investor and tenant.

Many prospective tenants will not even consider signing a rental agreement and living somewhere if they have not seen the property beforehand. Hosting an open house or setting up viewings will entice potential renters and make anyone who is interested more comfortable. This is not only advantageous for the tenant, but for the investor leasing the property. The investor would have the opportunity to meet those who could potentially live in their investment property and perhaps choose who they would prefer to rent out to.

The second type of property let is for SA types. The ideal tenant for this type of leasing property are those that are staying on the property temporarily, such as travellers, business workers, and construction workers. Two of the most popular SA websites known internationally are Airbnb and Vrbo. Both offer similar services in terms of how they list properties and find potential clients. With these services, the lister can upload pictures of the property, provide location and amenity descriptions, and outline a cancellation policy. 

Airbnb presents two options for fee payment, the split fee and the host-only fee. With the split fee, the fee is split between the host and guest, with the guest usually paying more. The guest’s extra fee is about 14% of the booking total while the host’s is about 3%. The host-only fee option, which is becoming increasingly popular, is about 14% of the profit made from the booking. Vrbo also offers two models for fee payment: an annual subscription option and a pay-per-booking option. With the annual fee, the investor listing the property pays a $499 fee that covers the whole year, which can be a cost-effective option depending on the price to stay per night. This option is especially recommended to hosts whose property is available throughout the year or if the property is rented out for more than $10,000 in the year. Conversely, the pay-per-booking option charges the host a 5% commission fee and a 3% payment processing fee per booking.

It is important to note that London specifically has a 90-day rules that prevents short-term rentals to be let for more than 90 days in a calender year. This includes renting for 90 consecutive days or 90 days spread out. 

When it comes to the number of users and listings, Airbnb comes out on top. Worldwide, Airbnb has 5.6 million listings and 150 million registered users. Comparatively, Vrbo competes with about 2 million listings and 48 million users. Both companies offer similar services in terms of functionality for those listing the property. It is entirely possible to list properties on both platforms to maximise the exposure to different interested parties. The main thing to note if doing so, however, is to make sure not to double book. Both Airbnb and Vrbo use the same calender service, which can be linked to prevent any issues of booking twice.

An important part of Airbnb and Vrbo booking and SA rentals in general comes from customer reviews and ratings. Encouraging guests who had a good experience to leave reviews regarding the quality of service, cleanliness, location, and other property characteristics acts as a digital word-of-mouth recommendation. Prospective guests rely heavily on the reviews of past guests to decide whether or not they are going to stay somewhere. Cultivating positive ratings improves the chances of being booked in the future and keeping occupancy rates up, which is essential for running and maintaining a profitable property on one of these websites.

Although Airbnb and Vrbo are among the largest short-term rental services available to investors and guests today, there are still other notable companies that offer similar business. Booking.com is a similar service to Airbnb and Vrbo in terms of the booking process and fee structure. Another service called Simplyowners creates an ad for the property themselves, with an annual fee and discounts for multiple listings. A member of TripAdvisor, Flipkey allows hosts to promote their property for a 3% fee for every booking. Lastly, for high-end properties in London, a member of the company Onefinestay visits the property and decides whether or not to let it be promoted on their platform. All are reasonable options to look into separately or in addition to listing on larger sites like Airbnb and Vrbo.

Regardless of whether or not you are an investor in an HMO property or SA property, finding tenants is arguably the most important aspect of the process because doing so allows you to start making money on your investment. Social media and the different websites outlined above are designed to make the proceedings effortless for both the investor and the tenant. Rent to Rent is only getting more popular among investors. Progress Property Services offers reliable service in the real estate Rent to Rent market, and are happy to assist any interested investor in the process.


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