Changes to regulations and tax measures are top of the list of issues causing most concern to UK landlords. New research from online letting agency, Upad.co.uk, found that while these were their top worries, another key issue is client demand. Another prime concern for 74% of landlords was how to manage void periods between tenants. However, despite this, two-thirds of landlords do not intend to change their portfolios in the next few years.
The recent tax changes regarding the increase in stamp duty and phasing out of mortgage relief have been major worries for buy-to-let investors, with some wondering if their business would remain viable or whether they would have to raise rents to offset these additional financial costs. However, many are confident that in the long term, they still have a healthy business.
One worry is how to cope with void periods when no rental income is coming in. The property still racks up costs, even when it is empty and so is a drain on resources. Also, if a property takes a long time to rent, then it becomes less attractive to potential tenants and also drops down the listings on online portals. The key is to have a quick turnaround of tenants to reduce the time a property stands empty or hold on to existing tenants. There are ways to minimise void periods. The best way is to keep long-term tenants. Tenants can be encouraged to stay if the property is in top condition, in the right location and the landlord responds quickly to any queries or problems. It also pays to be flexible if good tenants ask to carry out some decoration, put plants in the garden or to get a pet.
Keeping the property well maintained is another key way of keeping tenants. You can make sure property checks, repairs and safety checks are always up-to-date and carried out on time. There is specialist landlord software available which will automate these tasks for you as well as offer timely reminders about inspection dates or when contracts are up for renewal as well as keep on top of bills, monthly rentals and inventories, for example. By automating the paperwork and contracts into one efficient system for documents, keys, utilities and financial checks, it ensures there aren’t any hold-ups for when a new tenant is interested. Being organised and forward thinking will help to reduce rental voids and help to ensure a quick turnaround of tenants. However, keeping hold of existing tenants for as long as possible is usually more cost-effective.
Once a tenant has given notice to quit, then it’s time to start advertising for replacements. The ideal situation to be in is to have a waiting list of potential tenants because your property is in an area of high demand, is more attractive than your competitors or because of your reputation as a great landlord. As a back-up, it is wise to have a contingency fund for void periods or to use this time to carry out repairs, replace furniture or decorate, so the time is spent wisely.