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Welcome to the next instalment of our "Smart Landlord" campaign, running throughout January in celebration of Property Tribes' 10th anniversary.Today, I have put together an article to give suggestions on how smart landlords can minimise the dreaded void.Now, more than ever, it makes sense to find ways to encourage tenants to stay long term.Every time a tenant leaves, you are likely to experience a void and there are other costs associated with tenant turn over.Each tenant turnover comes with expenses that range from cleaning costs to possible repairs and up-grades. Lost rent (especially significant when you rely on rental income to pay the mortgage), utilities, council tax, and advertising and various fees can all add up the longer the a rental property is vacant.Securing a long term tenant is one of the best ways of protecting your cash flow and investment.Here are my tips for securing a long term tenant:1. Buy in a good school catchment areaWhen you have a 3 or 4 bed home suited to a family, that tenant demographic tends to be motivated by being in a good school catchment area.Once they get their children into a local school, it is highly likely that they will want the children to remain there for the duration, so the family tend to put down roots and stay for several years."Whether during a recession or not, the competition for an address within the catchment area of a popular state school creates lively demand among desperate parents," says Nigel Lewis of Zoopla.Properties in a good school catchment area tend to come at a premium price, but this is good news for when you come to sell, because such properties will be more robust against recession and will always appeal to owner/occupiers who will be willing to pay that premium, making such properties easier to exit from.There is a site called Locrating which helps you find the best OFSTED-rated schools in any area.Related threads -Is proximity to good schools high on your list of BTL due diligence?Huge effect of good schools on house prices2. Allow the tenant to decorateIt's generally agreed that neutral colours are best for rental properties, but not every tenant wants to live in a white or beige box.Some tenants want to personalise the property and decorate it to their own taste.If you allow them to do this, then its very likely that they will stay longer, as they feel that they have more of a "home".Clearly, you need to agree with their colour scheme, the standard of the decorating, and, if it is quite radical, you may want to write it into the tenancy agreement that they have to return the property to neutral colours when they leave.The tenants may also want to hang their own curtains and pictures, and again, you can agree to this to allow them to "feel at home".3. Allow petsA recent study by SpareRoom found that 78% of tenants said they have struggled to find rented accommodation that will allow their pet(s) to live with them.Pets are definitely part of a family, so, if you allow them, it is likely that you will have a much greater selection of tenants to choose from, and you will also attract tenants who will value having a rental home that allows a pet, and will likely stay longer as a result.
Out of the tenants that already own a pet, 53% of these in the SpareRoom survey stated that they pay between £10 and £49 extra rent per month to allow their pet to live with them, with 32% paying between £50 and £99 extra per month, so allowing a pet can help increase a landlord’s margins.Cats Protection has launched a major new campaign to help more people living in rented housing own a pet cat.The UK’s largest cat charity is offering free guidance to landlords and letting agents to help ensure that tenancy agreements reflect modern day living.Issues over finding cat-friendly housing have been one of the top five reasons recorded by Cats Protection for cats being handed into the charity’s adoption centres over the past 12 months. Cats Protection’s research shows that less than half (42%) of private rented housing allows cats.Jacqui Cuff, Cats Protection’s Head of Advocacy & Government Relations, said:“More and more people are renting their homes either by choice or necessity, yet very few rented properties accept cats. This means tenants are missing out on being able to own a cat, while landlords may be losing out on attracting responsible and settled tenants.”The charity has launched a new website full of guidance for landlords and tenants about allowing cats into their properties and addressing any concerns. The website, at http://www.cats.org.uk/purrfectlandlords includes free, downloadable legal wording for landlords and letting agents to add to their own tenancy agreements, setting out simple conditions on cat ownership to protect and benefit both landlords and tenants.Jacqui added: “We hear from renters who tell us most adverts state ‘no pets’. Often, the reason for not allowing cats is simply habit, with a third of landlords who don’t accept cats saying they didn’t proactively choose to ban cats, but instead followed a standard template or advice from a letting agent.“The aim of Cats Protection’s Purrfect Landlords campaign is to transform renting so that responsible cat ownership benefits both landlords and tenants - happy landlords, happy tenants, happy cats.“Becoming a cat-friendly landlord means advertising properties as ‘pets considered’ which ensures landlords stay in control and can make a decision once they’ve met their potential tenant.“Our downloadable example cat clauses can then be simply added to existing tenancy agreements and they include tenancy conditions to require cats to be neutered, vaccinated and microchipped. This helps to ensure that cats are in the best of health and unlikely to cause any issues.“We’re also offering advice to help tenants speak to their landlords to ask for permission to own a cat. Landlords are often willing to be flexible, especially as tenants with pets are likely to stay for longer.”
See - Should a landlord allow pets? I have allowed tenants to keep dogs, cats, and also chickens!4. Rent the property as unfurnishedA tenant who moves in with a van of furniture is likely to stay longer than a tenant who just moves into a fully furnished property with just a suitcase.There is also the consideration of the cost of moving, which has increased in recent years. MoneySupermarket estimate a cost of £1,400 to move from an average two bed property, with packing included. Costs are based on a 50-mile move. This makes it likely that tenants who provide their own furniture will stay longer.5. Focus on the two most important rooms in the houseThe kitchen and the bathroom are ranked as the two most important rooms in a property, so its important to focus on these and make them as attractive as possible.Ensure they are well maintained and immaculately clean and even invest in a few up-grades when your budget allows.A little bit of extra money spent in the kitchen and the bathroom generally delivers dividends in terms of happy tenants and also maintains the asset value of your property.6. Find a niche and do it really wellSomeone I know only buys bungalows on the south coast and rents them out to retired couples. His tenants are good quality, pay on time, and stay very long term.Another couple were in the news for allowing very large dogs at their rental properties:Landlord niches ... the landlord who only rents to tenants with BIG dogs!Another niche might be renting properties that have been converted for wheelchair access or houses with a granny annexe so that two generations can live together.Whatever niche you choose, create a "blue print" and standard, do it really well, and you will be able to replicate it.7. Let the tenant know that you are a professional landlord and in it for the long termThis can give tenants reassurance that the property will be available for a long time. I also believe in letting tenants know that I am a member of a professional landlords association - in my case, the Residential Landlords Association, and this gives additional trust that I take being a landlord seriously.Property Tribes members can enjoy 25% discount off membership of the Residential Landlords Association.8. Undertake repairs and maintenance in a timely manner and generally be a pleasure to rent fromLandlords have legal obligations to provide a safe and compliant home, so take these seriously and react promptly to any repair and maintenance notifications from your tenants. Ideally, a contractor should be booked in within 48 hours of the tenant notifying you of a problem.If you are self-managing, be easy to contact and be approachable, as open and honest communication is one of the most effective ways of maintaining a landlord/tenant relationship and nipping potential problems in the bud.9. Don't put the rent up during the tenancyI appreciate this last one may be controversial, but I regard long term tenants who look after the property and pay their rent on time as gold dust.It is therefore my policy to maintain the rent at the same level for a sustained period. Putting the rent up can spook the tenant into leaving and end up costing you more than if you had left the rent at the same level.My policy is to review the rent when the property comes up for re-let and try and increase it then. However, in the current market conditions, I have found that I have had to reduce rents, not put them up, which adds weight to this point.Series run-down:Episode #1 - Launch of "Smart Landlord" 2019Episode #2 - Student HMO landlord - Punk TakiarEpisode #3 - David Sandeman, founder of the EI GroupEpisode #4 - Richard Blanco - Landlord and NLA Rep.Episode #5 - Paul Nicholson, Property DeveloperEpisode #6 - HMO landlords Gertie Owen and Paul WatsonEpisode #7 - Paul Shamplina of Landlord Action.Episode #8 - Ray Boulger of John Charcol Episode #9 - Smart Landlord mindsetEpisode #10 - Aiden and Rob, Property DevelopersEpisode #11 - Making decisions in challenging times Episode #12 - Smart landlords are using technology and data to get the edge Episode #13 - Professional property buyer, Jason Cohen What other suggestions do you have for keeping your tenants for longer?SEE ALSO - Futurist landlord thinkingUP NEXT - Struggling to find tenants for 4 months - L15DON'T MISS - My property won't let! 6 tips to get it let!NOW WATCH:
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
Communication and customer service
Work with customers - they are human and paying you for a service
When a repair needs doing, get it done quickly
Keep the property up to date
Just be a good manager and a good person and tenants will stay ...
Learn Change and Adapt ?????
All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.
I'd agree with all of the above. I'd add - agree a longer tenancy. Pay for decoration. Budget for improvements (not just repairs), wine (a christmas gift works nicely), encourage tenants to share their views on what they want - i.e choose the replacement taps from x3 options.
HMO specific - i'd add: Allow them final say on prospective housemates, Provide some basic utensils (not on the inventory to get them started), talk them through expectations of them (meet tradespeople, interview housemates, be respectful & tidy), Do a little extra - cut the hedge, put up pictures & shelves etc. And be clear about what they should expect from you: gas cert checks, regular maintenance etc
Disagree strongly with point 9 (rent increases) A tenant that looks after the property & pays on time isn't gold dust - it's the baseline expectation and if they're not doing that then the referencing & due diligence stage has failed.
I've got some tenants that have been in-situ for 12 years - if I hadn't increased the rent at all in that time, when section 24 came along I would have been sunk.
I tend to leave the rent where it is for the first 2 years then increase after that.We can see considerable costs for energy efficiency measures coming down the pipe - so if you're seeing your costs increase and don't value your product enough to increase your price (when the surrounding market price has gone up) - they you don't have confidence in your product.Every year - like clockwork - a rent small rent increase - even if it ends up only being 1%, tell the tenant what inflation has been in the past year so they can see it's a below inflation increase.If you want a long term sustainable business instead of it just being a side-hussle, you must increase your rent as market conditions allow.
DISCLAIMER just my personal opinion - for legal advice consult a qualified professional grown-up.
I'm disagreeing with 4 of the 9 suggestions here from my experiences for the following reasons:Non-property/tenant specific:
2 Allow the tenant to decorate - never bought a property off anyone yet that can decorate, and never (the couple and only times it happened, not bothering to ask me) found a tenant that can decorate either. "If you can p1ss you can paint" is obviously one of those old wifes tales! Spent more time, money and effort than it was worth to re-do the 'work'. My favourite example - tenant couldn't be 4rsed to finish off a wall so left it half-painted bright yellow = thanks!
3 Allow pets - never had this end well. Again, lied to, and see the bold bit above in #2.Specific to my tenancy/location:
4 Rent the property as unfurnished - wouldn't work for my types of tenancy niche, plus I can keep an eye on the quality of the furniture etc. in the house to maintain 'the look'.
9 Don't put up the rent during the tenancy - again, wouldn't work, as rents have gone up a lot in just 3 years. Would have been £4.5k down just this tax year alone. Again, it's about knowing your tenant type and whether it's possible or not. I'm still lower rent than my competitors, plus no LA fees so I don't feel bad about this one at all.All the above is from my findings, may not relate to others, but is just an alternative viewpoint.
All the above is from my findings, may not relate to others, but is just an alternative viewpoint.Thanks Adam. That is what PT is for - to express all view points. One of the great things about property investment is that it is highly customisable to each of us based on our individual profile and circumstances.Very often, there is no right or wrong - just what suits our investment approach, strategy, tenant demographic, and risk threshold, so it is good to hear a wide range of views and opinions.
Its very simple and the only factor is keep the rent fair and don't be greedy. It does not matter if you have the best property in the world you still need to find tenants who can afford it.
The government’s new Private Landlord Survey for 2018, published yesterday, shows that 70% of landlords kept their rents the same when they most recently renewed a tenancy showing that landlords prioritise keeping good tenants for a long term.
Related topic:A month’s free rent to reward good tenants?