January 25th, 2016.
Property Investment: How to Avoid Void Periods
Property can be a great investment, especially if you decided to buy-to-let as it can cover mortgage repayments and leave a tidy profit in your pocket. But what happens during that period between buying and leasing where you’re refurbishing the property or are looking for tenants? It costs you money.
So, to help save you cash and avoid that property void period, here are a few things to consider:
If you’re buying a property that is already rented out to tenants, sit down and chat with them to see if they’d like to stay on in the property. This is a low fuss option for both parties that keeps costs down; the only difference would be the person being paid at the end of each month.
Long term, high-quality tenants are hard to come by, so treat them well and they may rent your property for years and years to come.
Speculate to Accumulate
Do you want to get top dollar for your property and ask the highest rental rate possible? Then you have to give the people what they want and make it worth their money. No one is going to pay top rates for a property that is tatty and requires a lot of work.
Don’t put off work. Sort out any structural issues, give it a good lick of paint and have an annual spruce up and you will be surprised how property void periods reduce.
You could even invest in extending the property into the attic or adding a conservatory. This will elongate your void period, of course, but once done your property will be pushed up into the next rental bracket, meaning you’ll be able to charge much higher rental fees.
Ensure Occupancy All Year Through
Property void periods are common with tenanted properties aimed at students as the occupiers often return home during extended breaks. If you are planning on leasing your property to students you could ensure your property is occupied 12 months of the year by offering short term rentals to tourists during events or holiday seasons. Online sites such as Airbnb are ideal for this.
You want to get the most for your money, but think carefully about how much you list your property for. Pricing your property too low could mean you don’t recover your costs, but pricing it too high can be off-putting and not reflect value for money to interested parties. It’s a delicate balance.
Research what similar properties in the area are being marketed for and price yours accordingly. You could even use a psychological pricing strategy, for example a resale price of £199,950 sounds more affordable than £200,000 or monthly rent of £680 a month is more appealing than £710, but there is very little difference.
Get it Seen
As a rule of thumb, the more eyeballs you get on the property the quicker it is likely to get snapped up. Multiple viewings give the sense of urgency and encourage tenants to act quickly, therefore reducing your property void time.
Get your property the coverage it deserves by marketing it with the appropriate letting agents. They will ensure your property is listed on their website and other online property portals, with appropriate photographs, measurements and floorplans. They may even market it in local print publications or on their social media accounts too.
We may not be able to control your property void periods, but we can help you find the appropriate finance to ensure any works you do during this period are covered. Get in touch today to speak to one of our experienced and friendly financial brokers to discuss your needs.