Void Periods: how you can avoid them.
Void periods are inevitable. A void period when your property is unoccupied with no rental income will happen to most landlords during the lifetime of their investment. Yet excessive or lengthy void periods can significantly impact the viability of your investment. Many property experts agree that landlords should never take for granted that their property will always be occupied. As soon as a property is empty and you have no rental income your investment is costing you. Therefore landlords should actively manage their property to limit void periods at all costs.
Cost of Void Periods
New research has shown that tenants stay on average 16 months in a property in Manchester and Liverpool. The research also revealed that it takes northern landlords approximately 30 days to fill a vacant property. Void periods between tenant occupancies can end up costing landlords up to £850 every 16 months. Over the lifetime of a buy-to-let investment void periods can add up and become a significant loss for many landlords.
Although property experts claim that void periods are inevitable, we here at LegalforLandlords, believe they can be managed to limit the risk to your investment. If you are renting your property for the first time, or dealing with a change in tenant occupancy, adopting a void period strategy can keep your investment property earning rather than costing you.
Tips to Avoid Void Periods
- Void proof your property. Make sure your property is the best it can be. Kitchens and bathrooms sell a property so it’s worth investing in them. Tenants’ expectations of rental properties are increasing all the time. Your property needs to be of a high standard to attract and retain tenants
- Get good tenants and keep them. Invest in tenant referencing to give you reassurance about your potential tenants. If they are moving on, ask them why? You might be able to resolve their issue or have another property that suits their changing needs
- Every area has its ceiling rent. Make sure you set a realistic rent for the area your property is in. It’s more cost effective to get the property rented quickly at a slightly lower rent than holding out for a higher rent and risking a void period
- Offer a deal. A discount for the first month’s rent or including amenities can help clinch the deal for a potential tenant or help retain an existing one
- Offer good customer service to your tenants. Be open and accommodating to reasonable tenants requests. Your reputation as a landlord depends on it. You can always include a clause in the tenancy contract to ensure property is returned to its original condition when your tenants leave
- Consider letting on a multiple occupancy basis. Renting by room means if one tenant leaves you still have rent coming in while you find a replacement
- Actively market your property even when it is let. Family and friends may know of someone looking for a rental property when the time comes to re-letting it
- Invest in your property. Use any void periods to invest in your property or to do essential maintenance work
- Budget for void period. The rule of thumb is one month per year. If you have accounted, and planned financially for it, it won’t be an unexpected expense
- Protect you property. Ensure you landlord insurance covers your property if it is unoccupied
Every tenant moves on at some stage. Our tips are not exhaustive, however, we hope it has got you thinking of the practical steps you can take to avoid void periods.
We Can Help
Here at LegalforLandlords, our aim is to ensure your occupancy rates are high and your investment keeps working for you. We can help by providing the best tenant referencing, legal and insurance services for the rental property sector. Call us anytime on 0333 577 9050 or find us online at www.legalforlandlords.co.uk.