Void periods can cause stress for landlords, and aren’t always something that can be avoided. They should be a consideration when you’re thinking of letting out a property, to ensure you can afford to cover bills if and when your property becomes unoccupied.
We want to help you understand the ins and outs of void periods and what they mean to you as a landlord, including potential costs involved, the best ways to avoid them, and tips for managing voids if you experience one.
What is a Letting Void?
A letting void means a rental property is unoccupied for a period of time, usually between tenants. It is not an ideal situation to be in as a landlord, as it often means you are under pressure to find a new tenant, to avoid covering several months of bills, and missing out on rental income.
What is a Void Period?
The void period refers to the length of time that a property is vacant for. Void periods can vary in length depending on market conditions, the attractiveness of the property, and the landlord or property management team’s approach to finding new tenants.
What are Void Costs for Landlords?
Void costs are the expenses that occur for landlords as a result of a void period. These commonly include mortgage payments, utility bills, and council tax.
Other costs that fall under this bracket, but are often not thought about, include lost rental income, maintenance needed to get the property ready for a new tenant, and marketing expenses. In addition, as a landlord you may wish to get extra protection on a vacant property, which can include installing security, and increasing your insurance cover.
How to Calculate Void Costs
The cost of a void period varies between each case, depending on how much you charge for rent, and how long your property is empty for.
Let’s look at an example, to get an idea of how much a void period could cost you, based on rough estimates…
In this example, the total amount the landlord will spend on monthly bills, added onto the amount they will lose from rent payments, equals £970 lost per month during void periods.
This doesn’t account for some of the additional costs we talked about previously, as these can vary greatly depending on the situation of the landlord and property, so the total amount lost can be a significant amount more.
How Long is the Void Period?
Void periods can vary in length from case to case, depending on a number of factors mentioned previously, including the current market, location, condition and desirability of the property.
What is the Average Void Period in the UK?
The average void period for rental properties in the UK is around 3 weeks a year, so this is a good figure to base your own calculations on. This enables you to factor in void periods when looking at potential return from your rental property.
It is a good idea to try and find local data on average void periods around your area, or speak to a property management company to get this information. This will allow you to make more accurate estimates for how much profit you can expect to make from your rental in a year, considering any potential void costs.
How to Avoid Letting Voids
You can’t completely eliminate the risk of having void periods as a landlord, but there are steps you can take to reduce the chances of it happening.
Choosing the Right Property to Let
Choosing the right property to rent out is a huge factor in reducing void times, as a more desirable property and area will reduce the chances of tenants wanting to move on, and will also help you get a new tenant sooner if they do.
When looking for a property to rent out, consider how attractive it is in terms of its location, local amenities, schools etc. Also think about the property itself, are you looking for a flat or house? How many bedrooms does it have? Is it suitable for a growing family? Is it more likely to attract students? Do the neighbours seem friendly? Does it have parking?
Have a think about the type of audience you want to attract as tenants, and then consider what they would be looking for in a rental property. Get advice from letting agents if you are unsure what type of tenants a property is the most likely to attract.
The Importance of Long-term Tenants
It goes without saying that having long-term tenants is the best way of avoiding void periods.
There are always going to be situations where your tenant has to move on, whether they are relocating, need something bigger, or are looking to buy somewhere themselves. These reasons are out of your hands, but you should do everything you can to ensure they are not leaving for reasons within your control - such as poor maintenance, lack of communication, or high prices. We’ll touch on this more below…
How to Build a Good Landlord-Tenant Relationship
Building a good relationship with your tenant is going to give you the best chance of keeping them - which is desirable, particularly if they are a good tenant! Here is the best advice we can give you about keeping a positive landlord-tenant relationship…
Keep Your Property in Top Condition
Some landlords can be guilty of only putting time and money into maintaining their property when they have to, or between tenancies. By keeping on top of general maintenance and ensuring your property is in good condition, you are going to keep your tenant happy, and build trust.
Don’t just rely on your tenant reporting any issues with the property, as they may not want to cause a problem or ruin the relationship with you by complaining. Instead, you should arrange regular inspections where you can see for yourself if anything needs fixing.
Conduct Regular Inspections
Regular Mid-Term Property Inspections, in addition to your Check In Report and Check Out Report, are a great way of keeping on top of property maintenance.
You can do this yourself to see if there are any obvious issues, or hire professional property inventory services such as what we offer at Arnold Inventories. This allows you to get more through inspections, and provides you with reports of where damage may need fixing.
Make sure you take accountability for any damage where it is general wear and tear, and don’t be quick to pass blame onto your tenants without evidence that damage was caused by them, as this will have a negative impact on your relationship.
Don’t Overcharge for Rent
It is difficult in the current climate to charge enough rent to cover your expenses, without over-charging your tenants. Only make price increases where it is necessary, and in-line with the rental market in your area, and don’t be greedy about it.
Be sure to speak to your letting agent about how much to charge for your rental property, and the pros and cons of increasing the cost of rent. After all - you could end up worse off if you have a long void period, rather than keeping your tenants rent the same and then continuing to rent from you at the current rate!
Communicate Effectively With Your Tenants
Have regular communication with your tenants, including checking in with them to ensure there are no issues, rather than waiting for them to come to you every time.
If you are arranging inspections, give the tenants more than the minimum 24 hours notice (or however long it states in your tenancy agreement), and find a date and time that suits them. This will help them prepare for the inspection, and it will feel less like you are checking up on them.
How to Manage Rental Voids?
The best way to cope with the extra costs of void periods is to factor them in from the start, to make sure you can cover costs if it does happen. Always plan for the worst, and then you will be more prepared!
Budgeting For Void Periods
As an experienced landlord, you probably have a good enough idea of how to calculate rental income, and budget for things like maintenance costs and void periods.
If you are a new landlord and don’t have the previous experience, one of the most important things you can do is budget for unexpected costs, even if they may not come up - this includes void periods.
Considering Contract End Dates
Careful planning can help you manage void periods. For example, if you can manage your rental so the agreement runs out at the busiest times in the property rental market, such as late spring/summer, you are more likely to get a new tenant and reduce the void period.
Conclusion: How to Deal with Void Periods
Understanding and managing void periods is crucial for any landlord. While they are often inevitable at some point during your time as a landlord, there are steps you can take to significantly reduce the chances of losing tenants, as well as the length of void periods.
Being well-prepared when calculating your rental income should reduce the impact a void period has on your overall finances, and allow you to cope with covering the extra costs.
If you would like to speak to our team about property inspections and how they can help you as a landlord, reach out to us via our online contact form.