Finding a Tenant - The Need for Speed
According to the Nottingham Building Society, about 21% of Buy to Let landlords do not secure a paying tenant within four months of completing their investment purchase. 53% waited for two months and the average void period was one month after completion.
This should ring alarm bells for landlords. We suggest these delays should be unacceptable for the serious investor, as even a one-month void represents 8.3% of the potential yield for a property – that could represent your entire year’s profit or at least put pressure on your finances if you are highly geared.
Around 62% of respondents said that the delay was caused by the need to redecorate or refurbish a property before letting it. Our advice is always to try to gain access to the property for a few weeks prior to completion in order to complete any improvements, even if it means delaying completion by a couple of weeks. You might even be able to make it a condition of your purchase where practicable.
While such works are being done we will often sign up a tenant in advance by showing them what is being done “for them”. We might even involve them in the choice of colour scheme in exchange for signing them up well ahead of occupation.
Incidentally, the research also found the average landlord spends around £700 a year per property on maintenance, and 37% of landlords claim to spend less than £500 a year. Looking at this research on a local scale, we saw this figure as even less with £350 seeming to be the average spend on maintenance. We find that those landlords who invest in noticeable property improvements tend to be those who experience minimal void periods - and they also achieve higher rents.
There is of course an element of balance to be attained and we are always happy to advise on the optimum improvement spend when considering yield versus occupancy. Please feel free to contact us on 01202 554470 for our friendly expert opinion, or pop into our office at 4 Yelverton Road, Bournemouth.