A void is a period where a landlord does not have a tenant paying rent. For student landlords, this may either be a whole property being un-let or a room or rooms within a larger property lying empty.
To maximise success a rental property should avoid any periods where no or reduced rent is being collected. This is especially true for those within the student housing sector, as full rent is usually only paid from September to June, when students are attending university. During summer months, rent may be at a reduced rate, or the property may not be producing any income at all. Paired with the fact that if a landlord fails to let a property by the start of the university year, it may be difficult to find another tenant until either the following January or, in a worst-case scenario, the next academic year.
Tenant voids are important for landlords to avoid, especially those with a smaller portfolio, as they can be financially damaging. The landlord will be responsible for covering mortgage repayments, council tax, insurance, marketing expenditure, utility bills and other maintenance costs. All whilst not having an income stream from the property. It is therefore vital to avoid these periods.
Escaping tenant voids
Properly maintaining the property could remove any underlying reason why tenants do not choose the property. Ensuring everything is presented smartly and is in good repair will make the property more attractive to potential tenants. If this is a problem, a quick renovation or redecoration may be able to rectify this. The Kitchen and Bathroom are important rooms to focus on.
Student tenancies are usually agreed very early in the year. The National Student Accommodation Survey found that 41% of students look for accommodation in December or earlier. It is key to advertise the property as early and using as many channels as possible. This increases the number of students that will see the property and increases the number of potential tenants. Using a mix of local newspapers, online portals and university-approved landlord schemes will boost property exposure. If you are using a letting agency, ensure there is regular contact and updates on viewing numbers, enquiries and any feedback gained from viewings. This should uncover any problems with the property, or more importantly, the letting agent. A rental property is an important asset for a landlord, if a letting agent is not fulfilling their duties, an alternative should be found.
Charging an appropriate rent rate can greatly reduce potential voids. Analysis of the current local market and searching for evidence to inform rent levels will ensure that a reasonable rate is achieved. Properties marketed or let at an above-market rate may not attract tenants or may result in voids in the future as tenants leave to find more reasonably priced accommodation. Predatory letting agents may intentionally advise a higher rent in order to attract business. Achieving market rate rent is mutually beneficial to all parties.
Communication
Having good communication between landlord and tenant improves the relationship. Tenants are more likely to stay in the property of a landlord who is approachable, professional and easy to contact. Open lines of communication increase the flow of information regarding maintenance and repairs, rent payments and other questions. Not only will this improve service levels and reduce disputes for tenants, but also provide the landlord with information regarding their property and plans of the tenants. This will allow a strategy to be formulated for the future, in terms of beginning a new tenancy or finding a new tenant.
Incentives are a useful tool for landlords as a way of increasing interest in a student property, especially if the university term is approaching and the property is still vacant. Offering a rent-free or rent reduced period at the beginning of the tenancy will reduce income, but is much more attractive than a property staying vacant for an extended period. Including utilities or offering a subscription to a television service can be successful.
Not all void periods are escapable
The problem is that void periods are unavoidable, landlords cannot fully guarantee against them.
As a student landlord, you can turn voids into opportunities. Having a vacant property gives the chance to complete any maintenance tasks or redecoration that may improve the attractiveness of the property. It will be easier and faster than when completing with tenants present. Furthermore, it may also result in a higher rent rate for future tenancies. Voids can also be an opportunity to upgrade the photography attached to any adverts. This can help expand the number of channels the property is advertised on.
Offering short term lets to students who require accommodations for a limited time may be a way of reducing the impact of a void, although this will require a more hands-on approach.
Another possibility is to make the property attractive to international students, whose numbers are forecast to grow over the next few years, working with an international student-focussed company can give the property exposure to a much larger pool of potential tenants and reduce voids in the future.
For more insights, please visit our homepage.
References
No Letting Go. 2018. Accessed 24th October, 2019, from https://www.nolettinggo.co.uk/blog/8-tips-for-preventing-rental-void-periods/
Property Hawk. Accessed 24th October, 2019, from https://www.propertyhawk.co.uk/magazines/avoid-the-void/
Pettyson. 2019. Accessed 24th October, 2019, from https://www.pettyson.co.uk/about-us/our-blog/428-void-periods
Direct Line. 2015. Accessed 24th October, 2019, from https://www.directlineforbusiness.co.uk/landlord-insurance/knowledge-centre/running-your-property/landlord-with-a-void-period-heres-what-to-do
Save the Student. 2019. Accessed 24th October, 2019, from https://www.savethestudent.org/accommodation/national-student-accommodation-survey-2019.html
