Clearing the Air: Debunking Misconceptions About Landlords Renting to Serviced Accommodation and HMO Management Companies

Renting property is a significant decision for any landlord, and when it comes to renting to serviced accommodation or House in Multiple Occupation (HMO) management companies, the stakes can feel even higher. Many landlords are hesitant, often citing fears that these companies bring higher risks, less control, or a perceived lack of care for the property. These concerns are often based on misconceptions. In this blog post, we'll explore the most common myths surrounding landlords renting to serviced accommodation providers and HMO management companies.

Myth 1: Serviced Accommodation and HMO Companies Don’t Care for the Property

A common concern is that when landlords rent to HMO or serviced accommodation companies, they lose control over how the property is treated, fearing it will be poorly maintained due to the higher turnover of occupants or the increased number of tenants.

Reality: Both serviced accommodation and HMO management companies rely on their reputation and the quality of their properties to stay in business.

For serviced accommodation, in particular, properties must remain in excellent condition to attract high-paying guests and secure positive reviews.

HMO management companies also benefit from well-maintained properties, as this keeps tenants satisfied and ensures legal compliance with safety regulations.

These companies often have professional cleaning teams, maintenance schedules, and strict protocols in place to ensure that properties are kept in top condition.

In many cases, the property may be better maintained than if it were rented to a single individual or family, as issues are resolved quickly to avoid impacting occupancy rates.

Myth 2: Renting to HMO or Serviced Accommodation Companies Increases the Risk of Damage

Many landlords worry that the increased number of tenants in a HMO or the frequent guest turnover in serviced accommodation will lead to more wear and tear, potentially resulting in costly repairs or even serious damage.

Reality: While it’s true that more tenants or frequent guests could result in more usage, the reality is that professional management companies actively manage this.

HMO management companies follow strict regulations to ensure properties are safe, well-maintained, and compliant with local standards.

Similarly, serviced accommodation providers often have agreements in place with landlords to handle routine maintenance, as well as clauses that hold them financially responsible for any excessive wear or damage.

Professional serviced accommodation companies, for instance, frequently conduct thorough property inspections between guest stays, cleaning and repairing any issues immediately to ensure the property remains in top condition. This level of care can actually exceed what would be expected from a traditional tenant.

Myth 3: Corporate Clients Don’t Care About Occupancy Standards

Another misconception is that serviced accommodation and HMO management companies are solely focused on profit, disregarding the legal standards or occupancy limits of the property. Landlords fear that these companies may overcrowd their properties to maximize revenue, leading to potential legal issues.

Reality: Reputable HMO and serviced accommodation companies are well-versed in property regulations and understand the risks of overcrowding or violating local housing standards.

These businesses must adhere to strict guidelines concerning fire safety, occupancy limits, and health standards. Failure to comply with these regulations can result in hefty fines or the loss of their licenses, something no professional operator can afford.

In fact, most companies that specialise in serviced accommodation or HMO management often exceed the minimum standards required by law to ensure the safety and comfort of their tenants or guests, as this is crucial to their long-term success.

Myth 4: Serviced Accommodation or HMO Companies Will Be Harder to Manage

Landlords may assume that dealing with a serviced accommodation or HMO management company involves more administrative hassle, or that communication and conflict resolution will be more difficult than with individual tenants.

Reality: In fact, working with a professional management company can make life easier for landlords.

Most of these companies have systems in place to streamline communications and operations. They often handle the entire tenant or guest management process, meaning landlords don’t have to worry about day-to-day issues like rent collection, tenant disputes, or emergency repairs.

Instead of managing multiple individual tenants, landlords deal with one corporate entity, which simplifies the management process.

Professional companies are also motivated to maintain a good working relationship with landlords, as their business model depends on a steady supply of well-maintained properties.

Myth 5: Renting to These Companies Is Riskier

Some landlords fear that renting to a serviced accommodation or HMO management company is inherently riskier because they worry that the business might fail or mismanage the property, leaving them with unpaid rent or legal problems.

Reality: Like any tenant, HMO and serviced accommodation companies should be vetted thoroughly.

Established companies are often more financially stable than individual tenants. They typically sign longer-term leases, offering landlords consistent income. These leases often include clauses that ensure the company is responsible for rent payments, property upkeep, and other obligations, regardless of occupancy rates.

To reduce perceived risk, landlords can ask for additional guarantees, such as personal guarantees from directors. Many reputable companies will also provide evidence of their operational history and experience managing similar properties.

Benefits of Renting to Serviced Accommodation and HMO Companies

Aside from dispelling myths, it's important to emphasize the potential advantages of renting to these companies:

• Hands-Off Management: These companies typically take on all aspects of property management, from tenant/guest vetting to maintenance, allowing landlords to enjoy passive income without the typical hassles.

• Long-Term Stability: These companies are often willing to sign longer leases to ensure continuity in their operations, giving landlords stability and peace of mind.

• Professional Care: With their reputation on the line, these companies often go above and beyond to maintain properties, providing a higher standard of upkeep compared to private tenants.

Conclusion:

While renting to a serviced accommodation provider or HMO management company may initially seem daunting, many of the common fears landlords have are based on outdated myths. With the right due diligence, a solid contract, and a professional relationship, these companies can offer a reliable and financially rewarding solution for landlords. By embracing the opportunity, landlords may find that renting to these management companies brings not only stability but also increased profitability.