Understanding Maintenance Costs in HMO Profits

In our ongoing educational blog series about what affects HMO (House in Multiple Occupation) profits, it’s essential to shine a light on an unavoidable yet critical factor: maintenance costs. Whether you own a newly refurbished property or a well-worn building, maintenance is a constant that every landlord must account for. Let’s dive into the various aspects of maintenance that can impact your HMO profits.

The Reality of Maintenance Costs

First and foremost, it’s important to acknowledge that maintenance costs are a part of owning any property, especially HMOs. No matter how pristine your property looks upon completion of a refurbishment, tenants will inevitably introduce wear and tear. From accidental spills and marks on the walls to the minor damages that come with everyday living, maintenance is an ongoing commitment.

High Traffic Volume

One of the unique challenges of managing an HMO is the high traffic volume. With multiple tenants sharing common areas, you’ll likely find that carpets wear out faster and walls become dirtier more quickly than in a standard rental property. The constant movement of people, furniture, and belongings leads to a greater need for maintenance. Expect to replace carpets more frequently and invest in regular cleaning and upkeep to maintain a welcoming environment.

Appliances and Utilities

Another critical area to consider is the lifespan of your appliances. With more people using shared facilities, appliances will wear out faster. This increased usage can lead to quicker deterioration, meaning you might find yourself replacing dishwashers, washing machines, and other appliances more often than you would in a single-tenant rental. Staying proactive about maintenance can help mitigate some of these costs, but it’s wise to budget for their eventual replacement.

Older Properties Require More Attention

If you own an older HMO property, be prepared for increased maintenance needs. The age of the building can contribute to plumbing issues, electrical problems, and other wear and tear that may not be as prevalent in newer properties. Staying on top of these issues and performing regular maintenance checks can help reduce the impact on your profits. Remember, a stitch in time saves nine!

A Light-hearted Note

As we discuss the realities of maintenance in HMOs, here’s a humorous tidbit to lighten the mood: there’s one item you’ll likely never find in your HMOs—forks! Do you know why? Leave your answers in the comments below!

Budgeting for Maintenance

At Headway Property Investments, we recommend budgeting around 10% of your rental income for maintenance costs each month. This percentage helps ensure that you’re financially prepared for unexpected repairs and ongoing upkeep. By setting aside this amount, you’ll be better positioned to manage the costs that arise from the inevitable wear and tear of your property.

Conclusion

Maintenance costs are an unavoidable reality of managing an HMO, and understanding how they can affect your profits is crucial for successful property management. By anticipating these expenses and budgeting accordingly, you can maintain a profitable HMO while providing a comfortable living space for your tenants. Stay tuned for more insights in our blog series!