Definition of HMOs:

HMOs, or Houses in Multiple Occupation, are residential properties where several tenants live together, typically sharing facilities like kitchens and bathrooms. This arrangement can involve converting single-family homes or larger buildings to allow for the rental of individual rooms. Each tenant signs their own agreement with the landlord, creating separate tenancies within the same property.

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To begin, we need to set up a Leads Generator to identify potential opportunities.

Specifically, set up the Leads Generator to focus on properties that are outside an Article 4 Area, which are suitable for HMO Permitted Development Conversions. This setup will help you pinpoint properties where HMO conversions are permissible without the need for full planning permission, streamlining the process of finding viable investment opportunities.

In the Advanced Filters section of this particular template, pay special attention to the Property Information settings. Adjust the surface area parameter, which is currently set at 90 square metres, to exclude smaller properties that are unsuitable for HMO conversions. This filter helps refine your search to target only those properties that meet the size requirements for a viable HMO.

With your Lead Generator now active, it will begin delivering real-time market data on property opportunities that match your specific HMO PD Conversions criteria. This results in a curated list of highly motivated sellers, ready for you to engage with.

At the top of your workspace, you’ll find the Motivated Seller Banner. This banner categorises sellers from the most to the least motivated, based on your personal criteria. Sellers displayed on the left are typically more motivated and thus more likely to be receptive to a deal. In contrast, those on the right, who have recently listed their properties and may be holding out for the highest price, are considered less motivated. This system helps you quickly identify and focus on sellers who are more likely to negotiate, saving you time and increasing your chances of securing a deal.

a. Prioritise ‘Back & Reduced’ Properties: We recommend focusing on properties that have been marked as ‘Back & Reduced.’ This approach efficiently targets the most motivated sellers in the area, according to your settings, helping you save time in your search and increasing the likelihood of discovering lucrative deals.

b. Another effective strategy is to sort listings under the “Back and Reduced” tab by “Lowest Price.” This method allows you to quickly identify properties being offered at reduced rates, which is often an indication of seller motivation. Seeing these properties first can expedite your decision-making process by highlighting the deals most likely to provide good value.

c. Evaluate Floor Plans for HMOs: When evaluating Houses in Multiple Occupation (HMOs), start by examining the floor plan. This initial step can quickly indicate whether a property merits further exploration. A detailed and accessible floor plan can sometimes reflect the seller’s readiness to provide all necessary information, which might suggest their motivation to sell. This efficiency in assessing floor plans can speed up the process of identifying promising investment opportunities.

d. On the map, click the HMO Article 4 filter to exclude properties located within Article 4 designated areas. Focus your search on properties outside these areas, where there are fewer restrictions. Properties outside Article 4 areas are typically easier to convert into HMOs because they often do not require planning permission. This strategic filtering can streamline your search process, allowing you to quickly identify and assess potential HMO opportunities.

To effectively evaluate a property’s value, compare its price with the average price of similar properties in the surrounding area. This comparison provides a clear perspective on whether the property is priced competitively, which can indicate seller motivation and potential investment value. This method helps ensure you are making informed decisions based on market trends and local pricing.

Based on the data, the average asking price for this property is £129,950. Meanwhile, the average asking price for similar 3-bedroom properties currently on the market is £175,000. Given this comparison, it would be prudent to consider making an offer around, or potentially below, the average price of £129,950, depending on the condition and location of the property relative to others listed at £175,000. This approach ensures you’re making a competitive offer that aligns with market trends while potentially securing a better deal.

The price and status history provides a complete overview, ensuring you have the full context. For example, the property was originally purchased for £100,000. It has been listed with the same agent since November for £130,000. There was a potential buyer in February, but they withdrew in March, and the property has remained on the market since then. A simple traffic light system indicates the status clearly.

To arrange viewings for properties in your pipeline, click on the property card and select ‘Add an Action’. This will open a small window where you can choose your preferred viewing date and time. Additionally, you have the option to synchronise the viewing with your personal calendar, ensuring it fits seamlessly into your schedule and that you’re well-prepared for each property visit.