Top tips to avoid a void period on your property investment.
When investing in buy-to-let property, most landlords understand that their property could be vacant at one point or another throughout the duration of their investment.
Direct Line for Business has found that the average landlord will lose out on £547 every 18 months due to void periods.
On average, the research shows that a landlord will typically take 22 days to find a new tenant to occupy their property.
To avoid a lengthy void period, the experts at Experience Invest have put together some simple tips to plan for a successful property investment.
What is a void period?
A void period describes a length of time when a buy-to-let property is vacant. Extended periods of vacancy can reduce overall returns from the property and decrease the profitability of a portfolio.
What can you do if your property is empty?
It is inevitable that a residential investment property could be vacant at some point.
A landlord may wish to use this time wisely to carry out any maintenance and repairs. It is much easier to get a boiler fixed, carry out safety checks or to repaint a property when it is empty.
Landlords may also wish to update kitchen and bathroom areas to ensure their property remains desirable to tenants and improve the property’s attractiveness on the market.
If the property is vacant for an extended period of time, a landlord could contact the local council to apply for Landlord Council Tax Exemption.
However, if a property continues to have a low occupancy rate, the landlord should consider whether it is priced correctly for the local market. Comparing the property to similar listings will provide a guide to how much it should be let out for.
After all, reduced rental returns are better than none at all.
How to reduce a void period…
There are a few ways to reduce a rental void period and planning ahead could help to safeguard returns in the long-term. Here is a list of ways landlords can deal with an empty property.
Investors should avoid overstretching their budget when buying an investment property and factor in void periods into their strategy. A contingency plan could be the make or break of a buy-to-let investment.
If a void period cannot be factored into a plan, the investor should ask if the buy-to-let opportunity is truly a good investment?
Conducting a Full Tenant Check will help safeguard rental returns. Landlords may wish to secure references from a tenant’s employer, previous landlord and confirm their bank details.
If your property is well-kept, tenants are more likely to stay for longer periods of time.
Where possible, try to provide a good service. Tenants are more likely to stay put if a landlord is approachable and willing to maintain the property to a high standard.
If an agent is appointed, landlords should ensure that the company they have appointed is doing their job correctly.
Assure your rental returns
One way to ensure that you receive an income from a property, even if it is empty, is by investing in an asset that has rental assurances in place.
Experience Invest provides investors with fully managed UK property investments that have rental assurances in place.
Upon completion, investors will receive a NET rental return for an assured period on time which is paid whether the property is occupied or not.
For example, Falkner Place is a high-end residential development in Liverpool’s prestigious Georgian Quarter. This opportunity will provide investors with 8% NET per annum over a 3-year assurance period.
This investment strategy will allow investors to safeguard their returns for the first three years of the investment. What’s more, the discounted nature of this off plan development will allow investors to benefit from strong capital growth potential.
As the opportunity is fully managed, tenant checks, maintenance and the marketing of the property will all be taken care of.
Plus, as the development is a new-build, the property will have new-build warranty. This will mean that no work will be required by an individual landlord throughout the warranty period.
A property investment with assured returns may be the most efficient way to decrease a rental void period.