Extended void periods can have a devastating impact on a landlord’s rental income. It goes without saying that if there are no tenants to pay rent, the costs of running a property, organising repairs, taking out insurance policies and even finding new occupants will burn a hole in any owner’s pocket. But what can you do to minimise your chances of encountering a void period?
Most fixed tenancy agreements run anywhere between six months to a year, allowing the owner of the rental to relax, safe in the knowledge that they will have a dependable rental income for an established period. However, it is possible to minimise the potential of void periods through offering aspiring renters a longer tenancy. Whilst this may not be appealing to all renters that present an offer to the landlord, a modest reduction in the amount they are expected to pay in rent could make all the difference and offer owners financial security for a longer period.
A happy and respected tenant is more likely to stay around for longer, granting financial security and predictability to landlords. It’ll save you the hassle of having to market out your property repeatedly, encountering high marketing fees and referencing costs all whilst the rental is lying empty for a month or two.
Keeping your tenants happy could mean attending to their maintenance requests, or simply being flexible with inspections and property viewings. Play fair with your tenants and they will more often than not do the same in return. If you ask them to give you a couple of months’ notice of moving out then that means you have plenty of time to look around for new tenants – and less likely to suffer any void periods. After all, it’s within a tenant’s legal rights to move out on the last day of the fixed tenancy without having to give their landlord any notice.
Whilst this may sound somewhat obvious, ensuring that you have the appropriate material to advertise your rental opportunity once your existing tenants have left is essential to minimising void periods. As can be expected there will be a small delay between tenancies, allowing the land to attend to any remedial work and ensure that the rental is suitable for the new residents.
Landlords are advised to present their rental opportunity to aspiring renters early, ideally at least a month before the existing tenancy is due to expire. This will allow them to reference their applicants and accept an offer that suits them, instead of accepting the first interested tenants thanks to needing to rush them into the property to avoid a vacant rental.
Opening the doors of your rental property to a new demographic is certainly easier said than done but the results will speak for themselves. Whilst being consistent with the type of renters you target holds merit in university towns rich with full time students and young professionals seeking city centre opportunities, offering a well situated, affordable and practical home is something that is universally appealing.
Similarly, fewer than 10% of rental property owners currently accept renters that want to find a home alongside their pets. With a record number of households now not only finding a furry friend to join the family, but also find their next home within the private rental sector, this could be an invaluable opportunity for owners to minimise the chances of a void period.
Landlords should expect any potentially interested party will have done their research on the surrounding rental market and the available opportunities you will have to compete with for their offer. Whilst there are certainly other factors that are worth considering such as the current demand for rental properties in the area, offering future tenants a competitive rent could swing the balance, potentially securing owners longer tenancies and a more predictable rental income.
Some landlords may argue that experiencing a void period is simply part of being a rental property owner. Despite these assurances, it goes without saying that many owners will want to reduce their exposure to void periods and their startling influence on a landlord’s income.
But what are void periods? Simply put a void period is when the owner’s property is left without occupants, meaning the landlord is not receiving any rental income from their investment. This can present a significant problem to owners as without a sufficient rental income they are likely to be coving the costs of their buy to let mortgage, alongside the costs of maintenance, repairs, management and letting fees.
As mentioned, void periods present a great risk to landlords as in the absence of any tenants paying rent to occupy the property, the owner will be left with no rental income from the property. However, an extended void period will cost the landlord more than a few months’ worth of missing rent. Without any tenants paying rent the landlord will be liable to cover the costs of council tax and utility bills alongside the costs that come with repairing and maintaining the rental opportunity for future occupants. Further to this the search for new occupants will also deal additional blows to the landlord’s savings, seeing them pay for referencing checks on applicants, a new tenancy agreement alongside exorbitant agent fees.
As can be expected the loss of income can present a major problem for landlords, especially when the loss in unexpected. Although landlords shouldn’t expect their tenants to abruptly pack their bags and end a tenancy along with their rental obligation, many owners do account for periods where their rental opportunity may remain vacant when determining their budget. This rings especially true for owners that are dependent on their rental income to cover the costs of a buy to let mortgage, as they should be able to somewhat comfortably afford the payments even with a few months of missing rent.
Simply because the fixed term of a tenancy is coming to an end does not mean that the landlord must enter into a void period, vacating all occupants of the property in the process. Commonly, if both the tenants and the landlord wish for the tenancy to continue at the end of the fixed term, but neither party wishes to commit to a longer tenancy period, a rolling tenancy will commence.
Whilst renting is often revered over owning a home for its unrivalled flexibility, periodic tenancies offer the ultimate in this adaptability when renting a home. This can often be an incentive for a new demographic of renters that may not wish to rent a single property for extended periods, or those that relocate often. This also allows the landlord to reclaim possession of the rental far faster than if they were in a traditional assured shorthold tenancy as owners do not have to wait for a fixed term to expire when serving a section 21 notice.
Whilst purchasing a property with existing tenants can be a large undertaking for landlords, as oppose to buying a vacant property, a sale with tenants in situ (sometimes called “sitting tenants”) allows the new owner to generate a rental income right off the bat! Not only will buying a rental property with a sitting tenant prevent the landlord from experiencing an initial void period, but will also allow them to cover any mortgage or insurance expenditures.
A sitting tenant is an occupant of a rental property that is being sold by the landlord. If the occupant of the property still holds a valid tenancy agreement with the landlord, then they will be able to carry on living in the rental once the sale has been completed and ownership transferred to the new landlord.
However, this does not mean that the new landlord is not able to present the existing tenants with a new tenancy agreement that potentially alters the duration of the tenancy, the amount of rent they are paying amongst other details. It is also not uncommon for the new owner of the rental property to wish to repurpose the building, intending to use them as their main residence, meaning the existing tenants will need to relocate and find a new rental.
Why continue paying thousands each year in commission to let your property? With 97% of landlords recommending our services, and with over 50,000 tenants joining our rental community in the last year alone PropertyLoop is welcoming a new era of renting.
The PropertyLoop platform establishes the trust, transparency and personal service that has been lost from the renting sector. We are anything but another faceless corporation looking to profit from your investment, but a community founded on expertise and ambition.
We offer landlords complete clarity on available specialists through a landlord controlled rating and review system, giving users complete confidence of your PropertyPro’s proven results in finding owner’s ideal tenants faster.
With PropertyLoop landlords will have everything they need to let out their rental from start to finish, with no hidden fees, financial barriers or catches; only a revolutionary new way to let.