How to find out if there's demand for your HMO
Posted on 8th December 2022 at 11:10
HMOs can be risky, understanding whether there's demand for your HMO will de-risk the investment by a big margin. The last thing you want to do is invest your time and money in creating a HMO in an area where there is no demand. By investing in an area with no demand means you will have no tenants... which also means no passive income!
Figuring out whether there is demand for your HMO is a walk in the park, it only takes a few simple steps to give you that piece of mind that there are tenants looking for rooms.
Here are two easy steps you can take sitting on the couch in your living room:
Ratio Demand Check
Go to www.spareroom.co.uk, this is a website that connects tenants looking for rooms with rooms made available from landlords and agents. Once on the website type in the postcode and go to rooms available, take a note of this number. Then do the same but look at rooms wanted, take a note of this number. Then do the following calculation: rooms wanted / rooms available.
If the number is greater than 1 then this means there is more demand than there is supply, this is a good indicator. If the number is less than 1, then it means the market is saturated and there's more supply than there is demand.
Test the market, create an advert very similar to what you're looking to do. Reply to the tenants and let them know the room is no longer available, once this is done you can keep their details for rooms you have in the future.
If you want to remove the admin of managing your HMO we provide a full management service where you can also get guaranteed rent for a long period of time (3 years plus), we don't charge any fees and maintenance is included. If this is something that you're interested in please do fill out the contact form, or if you have any other questions do send us an email.
If you've got a HMO and are looking for guaranteed rent or even have any questions related to HMOs, feel free to go to the Landlord Management Services page on our website (click HERE), or contact us on email.
Tagged as: Advice for landlords, HMO, Property Investment, Tenants
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