Have you ever left your home without deciding on where you are going?
It might sound like a silly question, but it’s actually a really important one. I truly believe that this approach applies to pretty much anything we do in life.
- Have you ever started something without having a vision on how you would like the end result to look?
- Would you ever decide on writing a book without first identifying a particular vision for it or kind of message you want to convey to your readers?
- Would you ever plan your week without first identifying you main goals or what would you like to accomplish, such as a new business idea?
Same approach should apply to your HMO management strategy.
How would you like your HMO business to look like in a few months or a few years time?
When you have your long term vision in mind it’s much easier to make every day decisions, even the big important ones.
I would like to share an example from my experience and the time I didn’t consider my long term goal in a decision making process. (This is why it’s important to always write down your long term goals and overall vision for yourself or the business and read through to yourself every single day).
When we started our HMO management business, we decided on a 6 month AST agreements for our tenants, same as the majority of other people that I know.
When a tenancy expires, it automatically becomes a monthly rolling agreement.
We decided to keep the tenancy agreements monthly rolling and not implement the work flow in renewing the tenancy agreements every 6 to 12 months as it was less hassle and when circumstances change we can serve S21 notice much easier. However as I begun to manage more than 100 tenancies, I have realized that this was not the best long term decision for us. This meant that our tenants can give their 6 week notice any time and this in turn means that it’s much harder to predict and plan your lettings workflow.
However with renewing tenancy agreements every 6 – 12 months you can predict the times of the year when there could be an increase in tenants moving out and times of the year when you might have no one moving at all.
We have started implementing the tenancy agreement renewal process only once we had reached more than 100 active tenancies. Currently it’s much more complicated and slower process as it could have been at the very beginning.
Therefore my advice is, whenever you make any decisions, either big or small, remind yourself of where are you going and making a correct decision will become much easier.
Have a great journey.