good tenants void periods

How to get good tenants… and keep them for longer

Any conscientious buy-to-let landlord knows that good tenants can be the key to a successful rental property over the long term.

The private rented sector in the UK, made up of buy-to-let landlords and private tenants, is a key element of the UK housing market. People are renting for longer than ever in their lives, and rental housing standards are being held under the spotlight.

While some still use renting as a stop-gap between living with parents and owning their own home, growing numbers of households rent well into their 30s, from individuals to families and professional couples.

For buy-to-let landlords, securing good tenants can make a significant difference, which is why so many property investors are offering more than ever to attract tenants to their homes.

Once a tenant is in, keeping them for as long as possible reduces the amount of time a property sits empty, maximising rental income. What’s more, changing tenants over can be time-consuming and expensive, with the property having to be emptied, cleaned, possibly re-photographed and re-advertised.

Tenants are staying put for longer

According to a new Private Rented Sector report from Propertymark, tenants are currently staying in properties for longer periods of time – up to 23 months, compared to 21 months in February.

It also reported a small increase in housing stock across its member branches, with an average of eight rental homes per branch that were empty and freely available in March. While this figure still demonstrates a lack of supply, it is up from February’s figure of five.

On the other side of the coin, the number of new tenant applicants per member branch remains extremely high. In March, there were an average of 93 tenants registered per branch, compared to just 78 in February although down from January’s peak of almost 120.

Nathan Emerson, Propertymark CEO, says part of the reason tenants are staying for longer is this imbalance of stock available. This combines with “fierce competition” putting prices up.

Good tenants and good landlords

Both demand and rental levels have been on the rise across the UK rental market in recent months. Data from Rightmove shows that rental demand is up by around 6%, while national asking rents outside London are at an all-time high of £1,088 per month.

The property portal has also noted that tenants are signing longer leases, which prevents some stock from coming back onto the market when it normally would have done in the past. A number of buy-to-let landlords have also left the market, driving competition.

Emerson adds: “When an increase in tenants staying put for longer occurs, the churn of properties that would normally come back into the market begins to stagnate, feeding the issue further. Agents have been warning of the adverse effects of landlords leaving what they feel to be a hostile market.

“Property investment, like any form of investment, needs to be financially viable and with adequate risk mitigation. Many landlords feel their rights are being eroded, meaning they are more likely to sell.”

For both the individual landlord and the tenant, though, a longer lease means more stability. When seeking good tenants who pay the rent on time and are looking for a more long-term accommodation option, this can be a good way of attracting more applicants.

Ways to make tenants want to stay

  • Look at areas of high demand. If you invest in an area with high tenant demand, such as in or close to a major city or town, you will have a wider choice of good tenants. Think about where local jobs are, the transport options and the social scene in the area.
  • Consider size. Depending on your target tenant, size could make a difference. If you want to attract affluent young professionals, for example, a spacious two-bedroom apartment might be a good choice. If your investment is in London, a one-bedroom flat or studio might be more popular.
  • Invest in mod cons. Today’s tenants expect more from their rental properties. Patchy WiFi and a kitchen without a dishwasher are not on most peoples’ wish lists. You could even add smart technology, as these small touches can make a tenant want to stay.
  • Think about their bills. The more eco-friendly your property is, the lower your tenants’ bills will be. This is a major selling point, and you could even get a better mortgage rate for your property. New-builds offer the most energy-efficient options.
  • Make it their space. Tenants want to feel at home in a place, even if they are renting. If it’s furnished, consider investing in a furniture pack to get the right balance. You should also respect the fact that it is their space by giving plenty of notice for inspections.
  • Resolve issues quickly. If an appliance breaks or there’s a leak, respond as quickly as possible. The same applies for any disputes that arise. Once you’ve got good tenants, this can help you keep them.
  • Get good tenants. Your vetting process should help you rule out risky tenants. This could include those who have been evicted in the past, or who have failed to pay rent. If you appoint a letting agent, they should do this for you, but you can still have a say.
  • Consider an HMO. A house in multiple occupation (HMO) tends to have separate contracts for each tenant. This means that when one leaves, it is only that room that stops bringing in rent, rather than the whole property.
  • Budget for void periods. Sometimes, despite your best efforts, your tenants decide to move out. It is important to have a contingency plan for this so that you can cover any costs until you find a new tenant.

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