I want to give you my top tips on how to avoid rental voids. But first, what is a void? Basically it is the time when you are not receiving rent – usually the time between tenancies. It is the most likely thing that will have an adverse effect on your income. As a landlord for the last 20 years, I assure you I have made quite a few mistakes! But the main thing is that I learnt by them, and this is the education I am happy to pass on.
Nowadays being a professional landlord is not about making a quick turn over. Successful landlords make sure that the assets they have make a profit now, as well as in the future. So, it’s a lot to do with planning and not forgetting that the simple things can make a huge difference.
Here are my ten top tips to look out and plan for:
Top Tip 1: Choose the correct property:
Make sure that you choose an investment and not a liability. Know the market you are serving and buy the house to suit that. You most probably will never live in the property, so definitely don’t let your heart rule your head. Definitely don’t buy for future use of your parents or children. The people who will be living in the property now will be your tenants. Your tenants will expect a safe, clean, and warm home. Also, a little tip when you make your offer to buy – make sure that your deal is subject to the vendor allowing you to show the property to prospective tenants to reduce void periods.
Things to consider when choosing a property are:
Is there a high rental density already? What do the other properties look like? Are the gardens overgrown? Do the curtains look worn? One day you may want to sell the property and if it is perceived to be in a ‘rental ghetto’ this could reduce your return if the area has not improved. Also be aware of what is being developed in the area.
If you buy the same type of property in the same street or block you could become your own competition. If you are buying off plan, make sure that the deal is fabulous.
Garage and a garden
These are the most used search terms on the major web site. Having them will reduce void periods.
What are they like? Do the buses run near? Are there shops within walking distance? What are the schools like? All will have an impact on your rental and asset worth.
Be careful of buying anything with a grading of D or less. Make sure that you understand what is needed to bring the level up to C and what it will cost you. Make sure you know the age of the boiler
Does the property you are considering have good natural light as this is a definite plus when marketing.
Good Water pressure
Always a positive sell particularly in a shower
Modern Kitchens and Bathrooms
Will always put you ahead of most of the competition and will allow you have higher rentals. People will pay for quality and you would be very surprised to see how many investors do not see this.
If you have a property within a block, make sure that the management company are doing what you are paying for. Poorly maintained communal areas will turn off new tenants. You may have a palace but if you can’t get prospective tenants past the poorly decorated entrance this will give you the risk of higher voids
Top Tip 2: Make sure that you set up the correct agreement
If you set up the wrong agreement your tenant could stop paying the rent. Free downloads from the web look a fab idea, but do they protect your interests in the property? Your property is worth thousands, so is it worth the risk? Always use an agreement from a trusted source.
You are only going to need to refer to the agreement if trouble occurs with your tenant and by then it will be too late to find out that the free download is not much help to you. You’ll need to make sure that the agreement has reference to the deposit and how this will be dealt with, if there is a need to draw on it. Remember, if the deposit is not dealt with in the correct way you will not be able to serve a Section 21 notice, which could work out to be very expensive.
Top Tip 3: Choose the right tenants
Your due diligence should cover a minimum of the following elements
- CCJ history for all addresses
- Employer reference
- Proof of income
- Bank statements
- Passport check
- Proof of right to live in UK
- Letter proving past address
- Driving licence
- Visit to the present home particularly if pets are involved.
- If a guarantor is involved all of the above apply.
My reality is that most tenancies run very smoothly, but we have never taken additional money in lieu of decent references or moved someone in due to a hard luck story. Always meet prospective tenants and find out about them.
Top Tip 4: Rent reviews
Carry these out every 12 months. There are many sources to help you get an idea of market rate to make sure that you do not fall behind. There is a school of thought that if your rent is below the market rate you will keep your tenants in longer. There is no doubt that this has a lot of logic, but if you never do anything then 5 years down the line it will be very difficult to put an increase in place. Little and often, as long as it’s fair, will keep your investment on track.
Top Tip 5: Arrears
Deal with arrears the day they happen. Don’t get caught out on this one as it could be very expensive. The overwhelming majority of people pay their rent on time, it’s the few that don’t pay. It is essential to to deal with them quickly. When you become a landlord you run a business, so the rules are no different.
Top Tip 6: Carry out regular inspections
The word inspection sounds harsh, but it is your investment and you need to make sure that you look after it. Your tenant may not want to trouble you with a minor leak. Catching these things early could really save you money.
Top Tip 7: Carry out regular maintenance
Set up a rota for works for decoration i.e. hall every two years, bedroom every seven.
Top Tip 8: Understand the Law
There are over 170 pieces of legislation that affect the PRS. Make sure that you understand how they can affect you or make sure you work with someone that does understand the law. It can be very expensive if you get things wrong.
Top Tip 9: Use the correct marketing media when looking for a tenant
Rightmove is the largest portal with the biggest return in our area. But there are so many more ways of getting to your market. Whoever you work with make sure their advertising reflects the benefits that your property has. A poorly marketed property, even on Rightmove, will take longer to rent out, leading to potential voids.
Top Tip 10: Be Nice
The relationship between the landlord and tenant is a mutually beneficial one. Never think that you have the upper hand, you could come a cropper
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