An HMO can appear successful because most rooms are occupied and rent is coming in each month. However, gross rental income does not show how efficiently the property is being run, or how much profit may be lost through avoidable vacancies, rising costs and poor tenant retention.
A five-bedroom HMO generating £4,750 per month could still underperform if:
- Rooms remain vacant between tenancies
- Tenants frequently leave
- Utility and maintenance costs keep rising
- Rent arrears are not addressed promptly
- Communal areas are poorly maintained
- The landlord remains involved in everyday management
Individually, these problems may seem manageable. Together, they can reduce annual profit by thousands of pounds and create unnecessary work for the landlord.
Here are the most common signs that an HMO may need better management.
1. Rooms regularly remain vacant
An occasional vacancy is normal. Repeated or lengthy void periods suggest that the room-marketing process needs attention.
Consider a five-bedroom HMO in South East London where each room rents for £950 per month, including bills.
At full occupancy, the property could generate:
£950 × 5 rooms × 12 months = £57,000 per year
If each room experiences an average four-week vacancy during the year, the landlord could lose approximately £4,385 in rent.
Most running expenses continue during those vacancies. Council Tax, broadband, cleaning, insurance and much of the utility expenditure still need to be paid.
Recurring voids may be caused by:
- Marketing beginning too late
- Poor or outdated photographs
- An unrealistic asking rent
- Slow responses to enquiries
- Limited viewing availability
- Delays during referencing
- Rooms not being ready on time
- Poorly maintained communal areas
A managing agent should be able to identify where prospective tenants are being lost. For example, plenty of listing views but few enquiries may suggest a pricing or presentation problem. Numerous viewings without applications may indicate an issue with the property, household or advert.
Read our guide to reducing HMO voids and improving occupancy for practical ways to reduce the time between tenancies.
2. Tenant turnover is unusually high
HMOs naturally experience more individual tenant changes than many single-family properties. However, tenants repeatedly leaving after short periods should not be dismissed as an unavoidable part of HMO ownership.
Each departure can create additional costs, including:
- Advertising
- Viewings
- Referencing
- Cleaning
- Redecoration
- Inventory preparation
- Deposit administration
- Check-in arrangements
- Lost rent between tenancies
Tenants may leave because their work, studies or personal circumstances have changed. But repeated departures can also reveal problems with the property or its management.
Common reasons include:
- Repairs taking too long
- Poor cleanliness
- Unreliable heating or broadband
- Incompatible housemates
- Noise or antisocial behaviour
- Insufficient storage
- Weak communication
- One disruptive tenant affecting the household
A good manager should record why tenants leave and look for recurring patterns. Resolving a persistent household or maintenance issue may cost considerably less than repeatedly replacing otherwise reliable tenants.
3. Maintenance is always reactive
HMOs experience heavy use. Kitchens, bathrooms, appliances, heating systems and communal areas may be used by five or more unrelated occupiers every day.
Repairs are therefore unavoidable. The warning sign is when every repair becomes an emergency.
Examples include:
- A minor leak developing into ceiling damage
- A slow drain becoming completely blocked
- Condensation progressing into a mould problem
- A loose handle damaging an entire door
- A faulty appliance remaining in use until it fails completely
- A small roof defect causing internal water damage
Routine inspections should identify deterioration before it becomes significantly more expensive.
The manager should also maintain a clear repair history. If the same appliance or fitting repeatedly fails, replacement may be more economical than continuing to authorise temporary repairs.
Preventive management cannot eliminate maintenance costs, but it can reduce disruption, protect the property and prevent relatively minor problems from escalating.
4. Utility costs are rising without explanation
Where bills are included in the rent, uncontrolled utility costs can substantially reduce HMO profit.
Increased bills may be caused by higher market prices, but unexplained consumption should still be investigated.
Possible causes include:
- Heating left on continuously
- An inefficient boiler
- Faulty thermostats
- Portable electric heaters
- Poor insulation
- Leaking toilets or taps
- Inefficient appliances
- Estimated meter readings
- An unsuitable tariff
- Unusually high individual usage
Utility expenditure should be monitored against previous comparable periods. Comparing one winter quarter with the previous winter is usually more useful than comparing winter with summer.
For example, if annual rental income increases by £2,000 but utility expenses rise by £2,500, the property has not become more profitable.
A competent HMO manager should monitor both income and expenditure rather than focusing only on whether the rooms are occupied.
5. The same tenant complaints keep returning
Tenant complaints are not automatically evidence of poor management. Shared living inevitably produces occasional disagreements.
The problem arises when the same issues continue without a clear resolution.
Common HMO complaints involve:
- Cleaning
- Noise
- Guests
- Smoking
- Food storage
- Heating
- Bathroom use
- Waste disposal
- Parking
- Antisocial behaviour
- Unresolved repairs
One disruptive tenant can affect the entire household. If the problem is allowed to continue, several good tenants may decide to leave, creating further vacancies and letting costs.
Managers should maintain written records, establish the facts, communicate with the tenants involved and take proportionate action. Expectations should be explained clearly at the beginning of the tenancy and reinforced where necessary.
Effective HMO management involves managing the household, not simply collecting rent from each bedroom.
6. Communal areas are deteriorating
Prospective tenants judge the complete property, not just the available bedroom.
A bright, well-furnished room may still be difficult to let if applicants first walk through a dirty hallway, cluttered kitchen or poorly maintained bathroom.
Warning signs include:
- Overflowing bins
- Dirty kitchens and bathrooms
- Cluttered escape routes
- Damaged communal furniture
- Persistent odours
- Poor garden maintenance
- Insufficient fridge or cupboard space
- Missed cleaning visits
- Fire doors being propped open
- Maintenance problems remaining unresolved
Professional cleaning can help maintain standards, but a cleaner cannot resolve every household-management issue.
The manager must also ensure that tenants understand their responsibilities and address repeated behaviour that prevents shared spaces from being used safely and comfortably.
Poor communal areas do more than affect existing tenants. They can reduce viewing conversions, increase turnover and make it harder to achieve the appropriate market rent.
7. Rent arrears are identified too late
Rent accounts should be monitored consistently so that missed or partial payments are identified promptly.
Poor rent management may involve:
- Landlords learning about arrears several weeks later
- Unexplained tenant balances
- Informal arrangements without written records
- Inconsistent rent dates
- Delayed communication with tenants
- No clear escalation process
- Inaccurate or incomplete rent statements
A late payment does not always indicate a serious problem. The tenant may have made an administrative mistake or experienced a temporary issue.
However, early communication is important. A relatively small missed payment can become a substantial debt when nobody follows it up.
The landlord should receive clear and accurate information showing the rent due, amount received, outstanding balance and action being taken.
8. You cannot clearly see how the HMO is performing
Knowing the total rent received is not enough to assess an HMO’s performance.
Useful reporting should include:
- Current occupancy
- Upcoming vacancies
- Rent due and received
- Outstanding arrears
- Maintenance expenditure
- Utility costs
- Management charges
- Compliance dates
- Significant tenant concerns
Over a longer period, landlords should also review:
- Average vacancy length
- Average tenancy length
- Rent achieved per room
- Annual occupancy rate
- Maintenance cost per room
- Reasons tenants leave
- Net operating income
Without this information, a landlord may see £4,500 or £5,000 entering the account each month while remaining unaware of how much is being lost through turnover, inefficient spending and preventable vacancies.
Our guide to how much profit an HMO makes after expenses explains why headline rent should never be considered in isolation.
9. You are paying for management but still doing the work
Perhaps the clearest sign of poor management is that the landlord remains responsible for most of the property’s daily operation.
If you pay for full management but regularly need to:
- Chase rent
- Respond to tenant messages
- Arrange contractors
- Check whether repairs were completed
- Rewrite advertisements
- Conduct viewings
- Progress applications
- Monitor cleaning
- Resolve housemate disputes
- Remind the agent about inspections
then the service is not genuinely removing the management burden.
Some landlord involvement is reasonable. Approval may be needed for major expenditure, legal action or significant changes to the property.
However, the manager should coordinate routine operations, keep the landlord informed and provide clear recommendations when a decision is required.
The relevant question is not simply, ‘What percentage does the agent charge?’ It is, ‘What is being handled for that fee, and what results are being achieved?’
Read our guide to HMO management costs to understand what should be included when comparing management services.
How to assess your HMO’s performance
Review the previous 12 months rather than relying on one particularly good or bad month.
Start by recording:
- The property’s maximum potential rent
- Rent actually received
- Total vacant days
- Arrears or unpaid rent
- Average tenancy length
- Utility expenditure
- Maintenance costs
- Cleaning and management charges
- Number of tenant complaints
- Reasons tenants left
- Outstanding compliance or repair issues
Then identify the three largest sources of lost income, unnecessary expenditure or operational risk.
For one HMO, the main issue may be extended void periods. For another, it may be rising utility consumption or repeated maintenance problems. A third may achieve good rent but require an unreasonable amount of the landlord’s time.
Once the problems are identified, an effective improvement plan may include:
- Repricing rooms using current local evidence
- Replacing photographs and advertisements
- Marketing rooms earlier
- Responding to enquiries more quickly
- Improving viewing availability
- Reducing turnaround times
- Strengthening rent-collection procedures
- Introducing preventive inspections
- Monitoring utilities
- Improving communal cleaning
- Addressing tenant disputes sooner
- Organising compliance records
- Providing clearer financial reporting
What to look for when choosing an HMO managing agent
Managing an HMO requires more than collecting rent and arranging occasional repairs. Before appointing an agent, ask how they will manage the property, its individual tenancies and the household as a whole.
Look for an agent that can clearly explain:
- Their experience managing HMOs and room-by-room tenancies
- How and where vacant rooms are advertised
- How quickly enquiries and applications are progressed
- Their tenant referencing and Right to Rent procedures
- How rent arrears are monitored and reported
- How inspections, cleaning and maintenance are managed
- How disputes between housemates are handled
- Which compliance dates and records they monitor
- What information landlords receive each month
- Every management, letting and tenancy-related charge
Ask to see a sample landlord statement and management agreement before making a decision. The cheapest percentage does not necessarily represent the best value if the service results in longer voids, poor tenant retention or continued landlord involvement.
A suitable HMO managing agent should provide clear systems, regular communication and evidence of how the property is performing, not simply promise to ‘take care of everything’.
Could better HMO management improve your return?
An underperforming HMO rarely needs one dramatic change. Performance usually improves through several smaller changes being handled consistently.
Rooms must be advertised at the right time and price. Enquiries need quick responses. Applicants need to be progressed efficiently. Repairs and tenant concerns must be addressed before they affect the entire household. Costs, vacancies and compliance dates need to be monitored properly.
This is where specialist HMO management can make a measurable difference.
Sturstons manages HMOs across South East London, providing:
- Room advertising and tenant sourcing
- Enquiry handling and viewings
- Referencing and tenancy administration
- Rent collection and arrears monitoring
- Check-ins and inspections
- Maintenance coordination
- Communal and household management
- Compliance monitoring
- Clear communication with landlords
We can review how your HMO is currently performing, identify where income may be lost and recommend practical improvements.
If your HMO is producing rent but still demanding too much of your time, or not delivering the return you expected, contact Sturstons on 0208 108 5974 to arrange an HMO management appraisal.
Join The Discussion