Letting agent advises landlords to maximise returns from their buy-to-let property; it is crucial to maximise the amount of rent you receive throughout the year he says.
Chichester letting agent Clive Janes of CRJ Lettings says, “this doesn’t, however, automatically mean charging as much rent as you think you can get away with”.
Most successful landlords understand the importance of minimising the time their property is vacant and maximising the chances their tenants will stay as long as possible, whilst consistently paying their rent.
I advocate advertising your property at a realistic rent in the first place, perhaps slightly lower than what you “might” be able to achieve.
Many landlords fall into a trap on this when receiving two rental valuations: for example, one at £1,000pcm and another at £1,050pcm. They assume they should advertise the property for the higher figure, thus receiving an extra £50 per month (£600 per year), to “maximise their income”.
But a search on local property websites indicates that advertising a property for rent in Chichester at £500-£1,000pcm takes 38 days to let, whereas at £1,000-£2,000pcm it takes 61 days. Those 23 additional days would cost the landlord £756 in non-rent!
Added to this, there’s the security risk of having a vacant property, possible extra insurance costs, along with the utility bills and council tax to pay (there are no empty property exemptions from the council anymore!)
Furthermore, you are likely to have a greater number of potential tenants wanting to rent the property at the lower figure. This means you can ‘cherry-pick’ the best of the bunch, increasing the likelihood they will look after the property and pay their rent – remember though, you must comply with discrimination laws here.
Meanwhile, those tenants will be happier to stay longer in a property that is well-priced, as opposed to keeping an eye out for something that might offer them better value for money.
All businesses know it is more cost-effective to look after and retain a current customer, rather than having to go out and seek new ones. Buy-to-let is no different; tenants should be treated as your (highly valued) star customers.
There is of course a balancing act in all of this, but understanding the numbers and managing the property both professionally and pro-actively will pay dividends in the long-run.
If you would like an honest rental appraisal of your property, which takes in to account all of the factors that will provide the best overall return, please get in touch with a good professional letting agent. Make sure they are members of one of the approved professional associations.
Make more money from your buy-to-let property – https://t.co/85LOKR2qEZ
— LandlordZONE (@LandlordZONE) January 7, 2016