NO VACANCY: KEEPING YOUR RENTAL PROPERTY OCCUPIED
They say that death and taxes are the only two certainties of life. Well, if you’re a landlord, you might be feeling that empty weeks at your rental property are an inevitable third.
Vacant days are money lost for landlords, and we meet plenty who feel both entirely powerless and resigned to losing valuable rental income. Aside from the financial cost, if voids become a regular occurrence they can cast a lingering cloud over your tenancies, with the back of your mind never completely free: will your tenant give notice at the earliest opportunity; will you find new ones for a seamless changeover; will you need to carry out repairs or maintenance before new people can move in?
But are void periods entirely down to chance and luck? And is there really no way to influence the number of days your property remains empty? Even though it might be unwise to expect 100% occupation over the lifetime of your rental property, there are undoubtedly actions you can take to reduce the risk of void periods, and even the occasional opportunity to use them to your advantage.
So this week’s article focuses on how to keep your rental property occupied in the long term so that voids don’t become a regular nuisance.
THE HIDDEN COSTS OF VOIDS
While the absence of a tenant will put your rental income on hold, it won’t stop your expenditure. For every day your property sits empty, you’ll become financially responsible for things like council tax, water, gas, and electricity, which all become costs for you as soon as your tenant vacates.
While utility bills will likely be minimal during empty periods, the council tax will depend on whether your property is furnished or empty. Furnished homes attract the full rate even when vacant, while the ’empty and unfurnished’ discount has dwindled. It all adds up, and you could easily find yourself paying a couple of hundred pounds each month your property is vacant.
As a rule of thumb, it’s wise to budget one month’s worth of rent for a void period each year. That doesn’t mean you need to lose 1/12th of your annual income, but having a contingency for things like hidden costs and unexpected expenditure can reduce the anxiety when something happens.
BE IN IT TO WIN IT
To quote Dorothy in The Wizard of Oz: “there’s no place like home”. Can you think of anyone who would argue with that phrase? It’s such a powerful and universally resonating statement. But look what happens when we change it to: “there’s no place like rented accommodation.” It just doesn’t have the same ring.
It’s essential to think about your property’s presentation during viewings and to pre-empt any issues. If you have tenants who’ve given notice, ask them if anything needs fixing. Attending to issues before they leave – or lining up contractors for the day they move out – will mean new people can move in immediately. An empty and cold home simply isn’t as inviting as one that’s lived in, so give yourself the best chance of re-letting before your tenants vacate.
If your property is already empty, make sure it’s as inviting as possible. Scuffed paintwork, mouldy grout, or chipped skirting don’t exactly paint a picture of a lovingly cared for home, so fix them as soon as you can. Large piles of mail forming by the front door are also never a good look, so clear them on regular visits if you’re self-managing. And depending on the time of year, either open the window vents to ensure a proper airing or leave the heating on low to avoid a frosty welcome.
You can also use a vacant period to make upgrades to your property without disturbing your tenants. Contractors will be able to move around freely without having to deal with personal belongings, which means works can proceed with more speed so your next tenants can move in sooner. See the Boost Your Appeal section for ideas on simple improvements to make your property more rentable.
You may feel this sounds obvious, but setting the correct price for your property will help it to rent faster, especially when there’s lots of competition. Overpriced homes tend to attract very little interest, and there is no easy way to communicate that you’re open to offers without making your asking price look pointless.
To reach the largest number of possible tenants, use a letting agent: they’ll have a register of potential tenants and will also be able to list your property on national search portals, where almost everyone begins their search. Many people never get any further than this before finding a home, so make sure you don’t miss out on the richest source of tenants.
Finally, be pragmatic and look at the bigger picture. In a competitive market with plenty of property available, accepting an offer £10 less per week than your asking price could well turn out better than sticking to your guns and risking a month without tenants. The right letting agent will help you strike a balance between ensuring that your rental income continues to reflect the market and maximising your occupancy rate.
BOOST YOUR APPEAL
Generation Rent is a thing, and the number of people looking for rented homes is rising. By 2021, almost a quarter of all housing stock in the UK will come from the private rental sector. Rising house prices have created a significant shift into long-term renting, which means people are looking for homes to enjoy for a longer time, rather than stop-gaps before getting on the property ladder.
The fact that more people are renting is good news for landlords, but it comes with increased hopes and expectations about the quality of homes on offer. So think about how to make your property more rentable to attract higher calibre tenants. Relatively small items like replacing the hose attachment on the mixer tap with a thermostatic shower unit; upgrading the kitchen by installing a dishwasher; or implementing affordable smart tech like room thermostats can make all the difference in attracting premium tenants.
Many of the upgrades or appliances that you can install cost much less than the UK’s average monthly rent of £974. Investing in good-quality items from trusted brands will not only ensure your property keeps up with competitor home; it will also reduce the need for ongoing repairs and replacements. People tend to give notice as soon as they can for homes where things keep breaking down, so why not help them to stay by ensuring that everything works.
THINK LONG TERM
If you’re looking for proof about renters staying in properties for longer, then look no further than the average UK tenancies, which now last for more than four years. Make it known to potential tenants that you want them to stay for the long haul, and that your property is somewhere for them to create lasting memories.
If your tenant feels truly at home while living in your rental property, they are far less likely to start hunting for somewhere new in nine-or-so months. Many tenants have experienced continual rent increases or receiving notice to quit every year to the point of always keeping an eye open for their next option. But if your tenant is a good one, it pays to reduce the possibility of them jumping ship.
The vast majority of tenancy agreements are 6 or 12 months long, which hardly sets the scene for longevity, but there is no limit on the length of an Assured Shorthold Tenancy. So why not consider a longer-term contract to give your tenants more comfort while including a break clause in the event of the tenancy not going to plan. And if you already have tenants in your property who you’d like to keep, even if the renewal date is a long way off, say something now. The sooner you do, the sooner you nip their wandering eyes in the bud.
Most of our landlords have no desire to have to continually re-let their property – even if they get a slight increase in rent each time – because they know that changes of tenancy often mean periods of vacancy. And no matter how conscientious your outgoing tenant, there will inevitably be the signs of wear and tear that come from everyday life, and from moving out. Empty homes are frustratingly good at highlighting even the slightest marks which could leave your home looking less loved than it is.
Long-term tenants bring stability and provide you with steady yields, with zero voids and less time, hassle and expense. You may well find that works more in your favour than the on-paper attraction of an incremental rent increase every 12 months.
SHOW YOU CARE
Part of a being a landlord – and all of being a letting agent! – is providing a service. Think about when you’re in a shop, at a hotel or on a plane: being treated well is not only delightful, it’s what keeps you coming back for more. It’s precisely the same with high-quality tenants: they’ll be in no rush to leave if they know their landlord cares.
We’d define a good service from a landlord as taking pride in your property: you simply can’t go wrong with the message that you’re a pro. Responding quickly if the washing machine breaks down or the heating plays up will give huge comfort to your tenants, so even if you can’t send a contractor out right away, the simple acts of acknowledgement and communicating are remarkably efficient at cultivating goodwill.
Remember, you WANT tenants who notice things. By letting you know the minute something’s up, they help you to keep your property in tip-top condition and to keep your costs down by dealing with problems at the outset, rather than leaving them to grow.
Managing agents carry out inspections during tenancies to make sure everything is going well for the tenants and to ensure that properties are being well cared for. If you’re self-managing, it’s well worth doing the same to give you and your tenants complete peace of mind and a personable relationship.
It would be wrong to suggest you should budget for zero empty days at your rental property, but you do have the power to create an environment that consistently attracts the very best tenants. By looking after your property, encouraging your tenants to stay for a long time, and showing them you care about their enjoyment of their home, you’ll be laying the foundations of a reliably solid occupancy rate.
If you’d like to learn more about keeping your rental property occupied and keeping your void periods to a minimum, why not get in touch? You can call Anthony on 07753 869016 or email us at firstname.lastname@example.org – we’re here to help you make the most of being a landlord.