While there are SO many reasons why I love investing in student HMOs, there are some downsides to this kind of investment. One of the things I like the least is the summer changeover period!
This involves getting the existing tenants out of your properties and turning the homes over to the new tenants. This is really hard work, and the more tenants you have, naturally, the harder this is.
If you’re interested in investing in student HMOs or are looking to improve your processes and scale your portfolio, read below or listen to the full episode on The HMO Podcast.
Here we’ll cover what student changeovers involve and a step-by-step guide to help you undertake this process as smoothly as possible.
An Introduction to Student Changeovers
Student HMOs are great because all of the work involved in filling houses is condensed into a really short space of time. But the real practical consideration and frustration are that this has to happen very quickly!
For my student HMOs, the changeover period is one week. A week is generally enough to get everything you need to be done across a pretty decent-sized HMO portfolio.
You don’t necessarily need that long if you have a smaller portfolio. I used to do it in 24 hours when I was first starting out. But there’s a huge amount to do and a lot can go wrong as there are so many moving parts and because you have to rely on so many people.
15 Steps to Improve Your Summer Changeover Process
Inevitably, the summer changeover period rarely goes perfectly. We try to make it run as smoothly as we possibly can, but it’s always a tough week! Here I’m going to talk you through the 15 steps to help you deliver student changeovers efficiently.
1. Align All of Your Tenancies
For starters, you need to make sure that all of your tenancies are aligned. And of course, that happens well in advance of the student changeover actually happening. We try where possible to make sure that all of our tenancy start and end dates happen on the same day.
Across my entire portfolio, all of the student tenants move in on 1 July and move out on 23 June. That means between these dates every year we have seven days to turn the properties over.
2. Send Tenants Moving Out Information
As your tenants’ move-out date approaches, send them helpful information about what they should do and how they can prepare for moving out. And you need to do that in plenty of time. The more prepared your tenants are to move out, the easier your life will be.
We send all of our tenants a document with specific move-out instructions, including information about cleaning, removing waste, the check-out inspection, and returning deposits.
3. Cancel Any Rent Payments
You also need to make sure that you either cancel any direct debits that you’ve set up for rent payments or send tenants information about canceling their standing orders.
There’s nothing more frustrating for your tenants or for you and your team than forgetting to cancel rent payments. You need to make sure you do this within four weeks of the move-out happening.
4. Send New Tenants Welcome Packs
It’s beneficial to send helpful information to the new tenants who are moving in. This includes your contact information, how the keys will be handed over, and instructions on paying rent.
Then, you’ll need to make sure all of the new tenants get their standing orders or direct debits set up. You shouldn’t leave this any later than three weeks before the tenants’ move-in dates.
5. Arrange Getting Keys from Departing Tenants
Get your departing tenants to confirm their last day on the property so that you can arrange with the last tenant who’s leaving the house to give you the keys.
If you’re not able to meet each other, give them very specific instructions about what to do with the keys. But ideally, you’ll want to take the keys back in person. Get them to sign something and record that you’ve taken the keys.
6. Arrange Giving Keys to Inbound Tenants
You also need to find out from the inbound tenants when their first day is, so you can arrange to hand over the keys to the tenant who’s arriving in the house first. Again, ideally, you want to do that in person and have them sign something to record they’ve taken the keys.
If you have to do a remote check-in, you might use the property’s key safe, but manage that process very carefully. Don’t leave your tenants with free and open access to a key safe as that should typically be used for tradespeople needing access in an emergency.
7. Plan Move-Out Inspections
Know exactly what day you’re going to be getting into each house to do the move-out inspections. These are more thorough than the periodic inspections as you’ll be on the lookout for any damage and potential deposit deductions.
With the inspection, you also need to get the final meter readings. It’s really important to record this even if the tenants are managing the utility bills.
8. Book Any Required Maintenance
Make sure you’ve booked any maintenance that needs to be done. Hopefully, prior to any of your move-outs, you’ve inspected the houses so you know whether any maintenance needs to be done.
There are certain things that are much easier to do once the tenants are moved out, such as touch-up decorating.
9. Schedule Deep Cleans
I’ve done hundreds and hundreds of student changeovers and experience tells me no matter how clear the information is that we give our tenants, the cleaning is generally not quite to the standard that we’d like it to be.
So, that’s why we send cleaners into every single house to do a full deep clean before new tenants move in. On the whole, I pay for that. However, if the tenants really haven’t made an effort in cleaning, we will charge them for that. You need to book deep cleans well in advance, and this should be scheduled after any maintenance happens.
10. Update Inventories
Once the cleaning is done, you need to go into every property and update the inventories. It’s helpful to use a system that specialises in producing these documents. You can also get companies to come in and take care of this for you.
We use last year’s inventory as a starting point and then make updates as needed where there have been changes to the condition of furniture and rooms.
11. Get Final Statements from Utility Companies
If you’re managing the utility bills and tenants are liable for overspend, you need to get the closing meter readings to the companies so they can generate the final statements. This needs to be done as quickly as possible so you know what the final spend is.
12. Process Deposit Returns & Deductions
You must also get the departing tenants’ deposits back to them. First, you need to determine if there are any deductions, whether from any damage or overspend on the utilities. Then, you need to communicate that with the tenants.
Ideally, you’ll be able to come to an agreement. If that happens, you can pass that information onto the deposit company. If you can’t, you need to lodge a dispute with the Deposit Protection Service, and they will step in to mediate. Keep in mind that this needs to be done within 10 days of the tenancy agreement ending.
13. Send New Tenants Inventories
You need to send your incoming tenants the new inventories. You have to give them the opportunity to read it and respond. Everyone needs to agree that the condition being reported in the inventory is a true and fair reflection.
Once everyone comes to an agreement, the tenants sign it and it gets stored away. That then becomes our reference if there are any disputes or issues when we do the final inspections.
14. Finalise Any Outstanding Elements
At this point, you need to finalise any outstanding elements. There are a lot of things that are going to happen that you cannot control. Issues will naturally crop up, and whatever it may be, you’ll need to figure out a way to get it done.
You need to have that capacity in your diary to fix things that go wrong. That may mean calling on others for support or bringing in some temp staff.
15. Book a Holiday to Celebrate
It doesn’t matter if you have 1, 10, or 50 student HMOs, you need to go on holiday once you’ve completed the student changeover. You’ve earned it! Let the new tenants settle in, put your feet up, and enjoy what being a student landlord is all about.
I hope this has given you a good insight into what’s all involved in the student changeover. Please don’t be put off investing in student HMOs. The changeover is all about planning. In fact, with this information that you’re now armed with, you’re going to nail it! It’ll still be really tough, but you’ll be able to do it.
If you’d like access to our template tenant welcome pack, moving out instructions, and other useful documents and resources, join The HMO Roadmap as an annual member! And if you want to ask any questions about the student changeover process, I’m on hand over in The HMO Community Facebook Group, along with other veteran student HMO investors.
About the Author:
Andy Graham is the founder and the lead trainer at The HMO Roadmap! He is also the co-founder of The HMO Mastermind and Smart Property, a specialist HMO property investment and management company. He writes as a regular columnist in different magazines about a variety of HMO topics and is the host of The HMO Podcast! Follow Andy on Instagram!