It was announced last week that the UK is officially in a recession, so how can you successfully operate as a landlord throughout this challenging time?
Prioritise good tenants over high rent
It’s better to accept a reasonable offer that’s slightly lower than you anticipate, rather than experience void periods. Now more than ever, it’s important to retain good tenants so carefully weigh up the risks of increasing your rent if you have a great tenant in-situ.
During an economically difficult time, make sure you are proactive and take out rent guarantee insurance to protect your income during times of increased risk. Talk to a broker who can look at the whole of the market and find a policy to suit your circumstances.
Mortgage payment holiday
Payment holidays are for people who need financial help – but it is worth remembering that this should be a last resort and only if you are struggling to make your repayments. Your credit file shouldn’t be impacted but lenders could still use this to make lending decisions in the future. Talk to an independent mortgage advisor for in-depth advice.
If you decide to reduce rent to help your tenants during financially challenging times, makes sure there’s a clear agreement in place. Put an addendum in your rental contract with details of the deferred payments along with details of the repayment plan.
Talk to us and other letting agents about our rental void periods and how we find renters in a tough market. Choose an agency that utilises social media and the latest technology to reach the right people as well as competitive fees.
Help renters to find financial support
If your tenants are struggling to pay their bills, help them to find assistance through Citizens Advice who can help them to budget, access financial aid and find out what benefits they are entitled to.
Be aware of the ‘new normal’
In today’s ‘new normal’ outside space and an area or home office to enable working from home is now much higher on renters’ wish lists. A property with a balcony, garden and even proximity to outside space is in higher demand and people are very conscious of another lockdown and want to be prepared for the event.
Is your renter profile accurate?
Consider widening your reach – if you previously wanted to rent to students could you make alterations to appeal to professionals? Look at how you could adapt your property to appeal to a wider audience.
During lockdown there has been a surge in pet ownership and research and it’s worth considering that over 44% of households currently own a pet. If you buck the trend and allow pets, then your chance of attracting long-term, trustworthy tenants will increase. A tenant who is lucky enough to find a pet-friendly property is more likely to be a great tenant in order to protect their future rental opportunities. Just make sure that there is an additional clause in your tenancy agreement to ensure that any damage is paid for or fixed and that the property is left clean and in good order.
Talk to us at Newton Letting if you would like further advice on renting your property during an economic downturn.