Void periods are without doubt one of the key factors affecting the profitability of HMO (house in multiple occupation) buy-to-let properties.
Of course, no landlord wants to have periods where there are no students in their property as it means missing out on rental income, however rushing to find new tenants without the proper screening procedures often means shorter tenancies and more disputes which is counterproductive in the long term.
Luckily, there are some simple things you can do to minimise and even avoid these frustrating tenancy voids.
What Are Void Periods?
As the name suggests, tenancy void periods are periods of time when a rental property is left unoccupied and therefore produces no income.
Despite the property being vacant, it is still liable for mortgages, maintenance, insurance and other taxes and charges which can have a significant impact on a landlord’s profits.
The Cost of Void Periods
Whilst the biggest cost of void periods is the loss of rental income, there are other fees that are likely to come into play as well, such as council tax, mortgage repayments and utility bills.
Landlords will also have to redecorate and inspect the property at the end of a tenancy which can generate added maintenance and repair costs, not to mention the fees for remarketing the property, screening prospective tenants and drawing up new tenancy agreements.
The other major cost of course is your own time. Running around trying to find new students for your property can be time consuming and stressful, especially when you’re up against the clock to get the property occupied before the new term starts.
How Can You Minimise Void Periods?
The best way to minimise the risk of void periods is for landlords to try and hold on to their good tenants.
Whilst it’s unlikely that your tenants will stay in your property forever, especially as students often leave the city they’re studying in once graduated, there are a number of things you can do to ensure they remain satisfied with their current living situation and stay longer than a year.
Be an Effective Landlord
Never underestimate the importance of the human factor when it comes to student tenants. If you’re friendly, helpful and cooperative, your tenants are much more likely to stay.
Even if you choose to have your property fully managed by a lettings company, choosing the right company who prioritises open communication and taking care of your tenants’ needs can go a long way in securing longer term tenants.
Provide Tenants With What They Need
Deal with any issues they have as they arise (maintenance for example)
- Don’t drop by unannounced, plan any visits you need to make and communicate this effectively to your tenants
- Respond to communications in a timely manner
- Make expectations clear in your tenancy agreement so students know what they can and can’t do beforehand
- Be proactive when asking students if they want to renew their lease
Attract the Right Tenants
As a student landlord, you have the advantage of knowing that students are most likely to leave once term time finishes, so if you’re proactive enough, you should be able to begin to prepare for the arrival of next years’ students around the same time and minimise your property’s void period.
Remember though that it’s in your best interests to make sure you attract reliable and respectful tenants. Fortunately, there are many ways you can do this:
Provide Suitable Furnishings
If you are looking to appeal to student lifestyle, furnishing the property in a way which is both appealing and practical is likely to increase your chances of succeeding. Including a working area in each room for example is crucial for attracting students.
Remember that first impressions are Important; keeping areas such as the kitchen and bathroom to a high standard is a great way to encourage prospective tenants to sign on the dotted line.
Be Creative With Marketing
Invest in high-quality photographs and utilise platforms such as social media to make your listing as appealing and accessible as possible.
Many property listings now include video tours of the property or virtual viewings which can really show what the property has to offer. Consider testing out these marketing techniques and see what kind of response you receive.
Carry Out Tenant Checks
Tenant checks for students differ slightly from the usual procedure as students are unlikely to have built up a credit score and may not have had previous renting experience.
Whilst you may not be able to conduct credit checks or ask for references, you should instead secure a guarantor for your tenants who becomes responsible for paying rent on behalf of students should they not be able to pay it themselves.
Charge Reasonable Rent
One of the biggest mistakes made by student landlords (especially new or inexperienced ones) is charging too much rent for a property.
Knowing the area is crucial when determining how much rent you should charge and researching the current market value of your HMO will ensure you offer a realistic price without underselling your property.
Having your property professionally valued can minimise the risk of getting the rental price wrong and ensure that you are offering a fair price for what you have to offer.
Maintain Your Property
Making the property a nice place to live is essential when it comes attracting longer term tenants.
One simple way to do this is to ensure that your property is maintained to a clean and liveable condition. A quick renovation project may just boost your chances of securing new tenants and may even increase the property’s value.
Having trusted contractors on hand to help with this will ensure you get the best price. At Digs, we work closely with a range of building and maintenance contractors who can assist with both large development projects and small maintenance issues.
If you’re a first time landlord looking for more information about letting to students, check out our dedicated guide.
Minimise Tenancy Void Periods With Digs
Handing your property management over to Digs means you never have to worry about your student property sitting empty, we have experience in both HMOs and smaller student properties.
With our fully managed service, we look after the property and deal with any issues immediately. If students choose to move on, we’ll find new suitable tenants and carry out all proper screening on your behalf with the aim of keeping any tenancy voids to a minimum.