A Positive Void Period
Yesterday, I met one of my clients who has quite a few properties with us: he runs his portfolio as a business and is just coming up to the end of the financial year. As a part of this he calculates his void periods for the year; and while we were having a coffee he said to me ‘last year couldn’t have gone better Paul, your team have got my void period down to +7 days’. This surprised me – I asked him how it could be a positive figure as a void would mean no rent: surely resulting in a negative figure! He then explained that he had 5 properties last year where the tenants moved out and new moved in, and that he always planned for a 14 day void period, but on average there were only 7 days between tenants moving out and new tenants moving in. For this client this was a big deal as with an average weekly rent of £196 this equates to an extra £980 of income over the year: more than a month’s rent for a typical investment property.
The conversation got me thinking about what landlords can do to minimise their void periods between changing tenants.
1. As soon as tenants serve notice, re-appraise the rental value and identify what work either needs to be done or could be done to maximise the rental return. The majority of tenants need to serve 2 months notice and this is generally plenty of time to obtain quotes and book contractors to start work as soon as the tenants move out.
2. Before you let a property for the first time, make sure you get it professionally cleaned: this then needs to be noted on the inventory and within the contract. The tenants are then contractually bound to getting the property professionally cleaned when they move out. Again, this can be booked well in advance to take place as soon as the tenants move out.
3. Market the property as soon as you can! Within the Private Rental Sector the majority of tenants need to serve 2 months notice, but the majority of tenants who are thinking of moving will be keeping an eye on the market and won’t actually serve their notice until they have found their new home. By marketing your property straight away it will get seen by everyone and have a quicker uptake.
4. Ask your agent to do an open house event for all of the viewings, this will help generate competition between prospective tenants, minimise the impact on your outgoing tenants (they will be packing up and gearing themselves to move after all!) and generally ensure you secure a new tenant quickly. (Not sure what an open house is? Read my blog here…)
5. Prepare to cover the costs of getting the house ready for new tenants. This is not what a landlord wants to hear but even the best tenants don’t always leave the property exactly as it was at the start of the tenancy! Any costs that should be paid by the tenants can be recovered through the deposit, this can take time and in some cases needs adjudicating by one of the deposit schemes. As a landlord you need to cover these costs in the first instance and then claim from the deposit. Unfortunately, this is not really fair on the landlord but it is sadly one of those things that a landlord needs cover.
Thinking about it further, my client with the +7 day void period gets this right every single time and always goes one step further. The day after the tenants vacate we have a general handy man booked to complete days’ work at the property, he doesn’t always know what he is going to be doing but it generally involves a few odd jobs and a lick of paint in a couple of rooms to keep everything looking tip top! The finishing touches are absolutely essential, after all.
I am a Director at Jones Robinson and have worked in the industry since the late 90’s. I am responsible for the residential lettings business within Jones Robinson and have helped 100’s of investors start and build their property portfolios, from accidental landlords and private individuals to full time professional landlords and multi-national companies. You can contact me with any questions at my email address or connect through my LinkedIn.