What Do I Do When My House Floods?house floods

Dealing with the aftermath of a house flood is always difficult. It is an emotionally difficult time for everyone – both landlord and tenant. Damage from flooding only gets worse as time goes on, thus it is important to act quickly! As an owner of a rental property there are several things you should know and understand about your responsibility as you begin the recovery process. The most important fact is, home flood coverage is typically NOT included in a property policy. Flood coverage can be purchased, but it requires a separate policy and most times the flood policy requires a 30 day waiting period before it takes effect.

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Most landlords are not responsible for insuring their tenants. However, a landlord could be responsible for covering replacement of items if they are responsible for the damage. But in most cases, your tenants should have their own renter’s insurance policy to cover their belongings. Renters insurance is generally fairly cheap and something all landlord’s should recommend their tenants own.
[bctt tweet=”10 Things to Know as a Landlord When Your House Floods”]

Landlord’s Responsibilities

  1. The landlord is responsible for the building structure itself as well as flooring, wiring, plumbing, and appliances; i.e., pretty much anything you provided to the tenant as part of their rent.[su_spacer]
  2. The landlord has responsibility to repair the unit so that it’s habitable and livable once again and this means that the repairs must be made as quickly as possible. If the repairs are not made within a reasonable time, the tenant could withhold rent, hire the work to get done, or even notify local authorities.[su_spacer]
  3. When a flood happens and you learn there is damage, immediately report the claim to your insurance company. (Please note: most insurance policies require you pay for home flood coverage separately from your regular policy.)[su_spacer]
  4. Whether you have home flood insurance or not, it will be very important to carefully track the expenses incurred as a result of the flood, including all material purchases, labor, travel, etc. If your insurance covers the flood, you will need to submit your expenses to them for reimbursement. If your insurance does not cover the flooding expenses, at the very least you will need the receipts for the next tax filing season.[su_spacer]
  5. In most states, landlords must provide 24-48 hours notice before entering the rental property; however, in the event of an emergency this does not apply.[su_spacer]

Tenant and Renter Insurance Information

  1. Renters insurance, most known for providing coverage for replacement of personal items if your stuff is damaged, ruined or stolen, also has other benefits.[su_spacer]
  2. Most renter insurance policies cover the cost of temporary relocation and normal living expenses in the event the location where the renter lived was damaged in such a way to make it unlivable. When the house floods, if the renter’s insurance policy does not specifically include home flood coverage, the damage and loss associated with flood will not be covered. Each policy has different limits and terms. It is important your tenants understand the limits of their policy. Regardless of how the event occurred resulting in damage, the landlord should encourage the tenant to report the event to his/her insurance company.[su_spacer]
  3. If the tenant has to relocate as a result of damages due to the house flooding or other significant damage, the tenant is not responsible for paying rent during that time.[su_spacer]
  4. The tenant will have the opportunity to cancel the lease at that time they are displaced due to the damages. However, they must notify the landlord or property manager soon after leaving the property.[su_spacer]
  5. If the damage does not require relocation but is a significant inconvenience, the tenant may request a rent adjustment.[su_spacer]

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[bctt tweet=”Home flood coverage is typically NOT included in a property policy. 10 things you need to know as a landlord.”]

This is a broad-level overview of the things to know about being a landlord when your house floods. Every situation will have its own nuances. When in doubt, go to your attorney, accountant, or insurance agent and get the guidance you need.

Here are some additional links that provide some good information:

What’s My Flood Risk?
What to Do When Your Apartment Floods
Post-flood Tips for Residential Landlords
What Are My Rights If My New Jersey Apartment Floods?
Natural Disasters – Who’s Responsible?
The 6 Most Important Clauses in a Landlord Insurance Policy

Happy Investing!
Jeri

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illegal rental duplexThe almighty rental duplex. It’s such an attractive option for investors because you get two tenants under one roof.This reduces some of your management and logistical efforts, and increasing your rent per square foot…a 50% increase in some cases. Some rental duplexes are almost like complete units that are only sectioned off by a firewall; for example, a newer condo duplex. Other duplexes may just be a house that has been specially converted to a rental duplex. In this case, owners split off one of the bedrooms and one of the bathrooms, add a kitchen, and call that an efficiency that is able to house another tenant.

Example:

An investor, who we’ll call Tom, picks up a 3 bedroom/2 bathroom (later referred to as a 3/2) apartment in Miami and is able to rent it for $1,700 per month. This investor has a great understanding of his market and knows that 1 bedroom studio efficiency apartments in the area can rent from $1,000-1,200 a month. He decides to add another kitchen, put a wall in, and carve off a separate 1 bedroom/1 bathroom (or 1/1) unit for a second tenant. Now, he essentially just created a new unit out of “thin air” that rents for $1,150. Of course, his original 3/2 apartment is now a 2/1 apartment after the conversion.
[bctt tweet=”How to Avoid Purchasing or Rehabbing an Illegal Rental Duplex”]
What is the net effect? Well, in a larger city like Miami, you often pay a premium just to live there. In Tom’s case, the $1,700 per month 3/2 has been converted to a $1,550 per month 2/1 apartment, creating a second unit within that property.

Put it all together and you have a 2/1 for $1,550 and a 1/1 for $1,150, which adds up to the original 3 bedroom/2 bathroom house that Tom purchased. The total rent for this house, which was originally just one 3 bedroom/2 bathroom house (at $1,700), is now $2,700 per month of rent! If Tom already bought this rental unit for positive cash flow, he just kicked this puppy into overdrive. It just sounds perfect doesn’t it?

Until you realize that Tom’s unit is now an illegal rental duplex…

Why is that? Well, Tom did the conversion without notifying the proper authorities. He also didn’t ensure his improvements were fully up to code by having them inspected. You might argue that Tom was a little negligent here, but it could’ve just been an accident.

Let’s look at another investor, Jessica. She is looking for a rental duplex and Tom just so happens to be ready to sell his. Jessica thinks it’s a great deal, even after Tom’s inflated the price to account for the new income the duplex offers. It is a really nice looking property and the numbers look great. Nothing to worry about, right?
[bctt tweet=”Watch out for illegal rental duplexes that have been incorrectly converted, especially in large cities.”]
Jessica works with her Realtor and buys the property. The Realtor ended up pushing the appraisal through with the seller anyway, despite the fact that it was illegally converted (this is based off of a true story–beware of this and make sure to have those units checked out.) After purchasing the property, Jessica did notice one problem–she had to pay utilities of that unit because there was only one meter in the building and they couldn’t be separated out by tenant. Furthermore, someone could report her to the city. Other questions such as “what happens when I have to sell it?” crossed her mind. She’d either have to hope that the appraisal was approved again (which is taking a huge risk) or find a cash buyer that wouldn’t try to get an appraisal.

So what happens if the city found out? The bad side is that the units would have to be converted back to original drawing specs. This means tearing down the added kitchen and opening up the walls that connect the illegal unit to the main residence. Often this would also mean evicting the tenants from the illegal unit while all of this is going on.

So what’s someone like Jessica supposed to do to avoid this situation from happening? Here are four ways you can help ensure you aren’t getting an illegal rental duplex like Tom sold and Jessica purchased.

1. How many units does the property have?
2. How many bedrooms and bathrooms does each unit have?
3. Are any of those units illegal units?
4. Does each unit have their own water and electricity meter?

Asking these questions will make sure you don’t run into problems in the future. Having these illegal units may seem profitable at first, but they really aren’t worth the risk! Due diligence, as always, is important, but when you buy a rental duplex, you definitely want to make sure you take extra steps to ensure you aren’t stuck with a huge mess on your hands!

Helpful Links:

Find out any changes, repairs, and taxes from your local assessor’s site.
National Assessor’s Site

Get an estimate on how much rent you can charge. This is also an average.
Rentometer.com
Zillow.com 

Infinite Returns,
Bill

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Upad are always looking for ways to help landlords and tenants understand each other better. We are grateful for all the help we receive with our surveys and for the insight it gives us.

These are the results from our most recent tenant survey to find out how tenants are searching online for their next rental in 2018

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Should You Invest in Real Estate or Pay Off Your Student Loans?

Someone once asked us, should you invest in real estate or pay off your student loans? Many people who have student loans wonder whether they should focus on repaying their student loans or use any additional money to invest. One type of investment that often comes up is real estate. That’s partly because many people dream of owning their own home or of buying investment properties to rent out in order to generate income.
But does it make sense to do this before being debt-free?

Investing vs. Repaying Student Loans

Most financial advisors will tell you it doesn’t make sense to wait to until you’ve repaid your student loans. That’s because student loans generally charge a relatively low-interest rate while many types of investments provide greater returns than that.

Here is an example. If your student loan is charging 5% interest, but you can make 7% by investing in the stock market – then it makes more sense to repay your student loans slowly and invest any additional funds in the stock market or another investment opportunity. 

Is Real Estate a Good Investment?

Real estate is an investment that has the potential to offer great returns. How big those returns will be, depend on the market you’re buying into and the purpose of your investment. If the real estate market is growing in value at a rate greater than the interest charged on your student loans, than investing in real estate makes sense. Unfortunately, real estate is cyclical and so it’s hard to know whether that growth will continue.

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If you plan to live in the home that you’re buying, such as a duplex, your return could be greater. The money that you would otherwise have been putting towards rent would now go to your mortgage. This would reduce the real cost of your investment and the equity you build would mean that your return will be better.

But when you’re investing in real estate, there are a number of other costs involved which could reduce your return. For example, you’ll have to pay taxes, buy insurance, and cover repairs on the house. Each of these expenses will increase your cost. That means even with a 5% price increase on your property annually, the actual return on your investment is less. 

One of the safest approaches to this technique is to buy strictly relying on the cash flow the rental property will generate. This way if the home value fluctuates, you will still be able to pay for all your expenses and weather the market changes. The real estate market will vary greatly depending on which part of the country you live in.

It is critical that you do your due diligence and run the numbers to ensure your rental property is generating positive cash flow at the end of each month. This will pay great dividends later on. The more times you run the numbers, the better you will be at understanding your local real estate market.

Ultimately, the only way you will really know if you should buy real estate or pay off your student loans is to run scenarios. Use our free Student Loan Vs Rental Property Analysis tool by clicking on the image below or using the menu by clicking the Tools -> AssetRover Downloads link, to help you decide which scenario makes the most sense for you.

Student-Loan-Vs-Rental-Property-Analysis-Tool

Fees and Interest Rates

Another important factor to take into account is how long you plan to hold the investment. Unlike stocks, it is sometimes difficult to sell real estate investments quickly. There are also high costs involved in buying and selling real estate such as agent fees, taxes, and closing fees. If you don’t plan to keep the property for a long time, then those fees could eat into your returns.

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If you have a high-interest rate on your student loans, it could also make it more difficult to make enough by investing in real estate. Should that be the case, you should think about refinancing at a lower rate. This could save you thousands of dollars and make it more beneficial to invest rather than repay your loans.

The Bottom Line

Many people who have student loans want to repay their debt as soon as possible. But if you wait and repay your student loans before investing, you lose valuable time that could be used to grow your net worth. In the end, you need to take your time, and do your analysis to make sure you are making the right decision to invest in real estate or to pay off your student loan.

Happy Investing,

Jeri

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If your tenant wants to stay in your property at the end of their contract and you are happy for them to remain, you have two options. You can issue them with a new Assured Shorthold Tenancy (AST) or you can simply allow their original tenancy to become ‘periodic’, in other words it will roll on from week by week or month by month, depending on whether they pay their rent weekly or monthly.

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Please note this article will be updated regularly to reflect updates in the movement of the Tenant Fees Ban legislation through the Government.

November 2017 Update

Since the tenant fee ban was debated in Westminster last month, draft legislation was released this week to reveal the finer points for the implementation of the ban. Landlords will face a fine of up to £5000 for charging tenant fees and if they breach the ban twice in 5 years, they could face criminal prosecution or a civil penalty of up to £30,000.

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Real Estate 101: How to Tell the Difference Between a Buyer’s or Seller’s Market

What is the difference between a buyer’s or seller’s market?

Are you in search of a new home, investment property, or the perfect office space for your business? Before looking for a property that will meet all of your needs, be sure to determine whether you’re currently in a buyer’s or seller’s market. Knowing what type of market your area currently has will give you insight as to how much bargaining power you will have.

To save you time, we’ve put together some of the best pieces of advice we can think of when it comes to determining your current market status.

Know the difference between a buyer’s or seller’s market

According to Certified Commercial Investment Member (CCIM) Brian Rosteck, “there is not a universally accepted upside to either [market].” While there are perks and challenges to each market, knowing the status of your area’s real estate market can be crucial when scoring the property you’re looking for. Your realtor is the best source for this information and you can ask them directly for this.

Buyer’s market

Before you can determine what type of market you’re in, you have to first know the difference between the two types. In a buyer’s market, there is more supply than demand in a neighborhood. In this type of market, you’ll have great negotiating power since there will be a need for properties to sell. When making offers, you’ll find that the seller is more likely to work on your terms in a buyer’s market. Essentially what you find is:

  • Inventory is higher than when compared to previous months or years
  • There is more than 6 months or more of inventory available on the market. You can determine this through the absorption rate and the month’s supply of inventory calculation. Your realtor can help you with this information.
  • Listings stay up longer and you will see higher Days on Market (DOM) numbers
  • Current listing prices are lower than previous comparable sale prices
  • Overall housing prices are falling
  • Likely to see more advertisements and bigger advertisements
  • It takes a long time for the “Sold” sign to go up

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Seller’s market

Conversely, in a seller’s market, there’s more property demand than supply and you will see the following characteristics:

  • Inventory is lower than when compared to previous months or years
  • There is less than 3 months of inventory available on the market. You can determine this through the absorption rate and the month’s supply of inventory calculation.
  • Listings do not stay up as long and the DOM is generally lower
  • Current listing prices are higher than previous comparable sale prices
  • Overall housing prices are rising
  • Likely to see fewer advertisements
  • “For Sale” signs don’t stay around long

What to do as a buyer for a seller’s market

As a buyer in a seller’s market, you’ll have a difficult time low-balling offers during negotiations. By doing so, you may lose the property you’re interested in. Because there is a limited supply of properties, sellers can turn to other buyers very easily without entertaining your offer. For more information on what mistakes to avoid during a seller’s markets check out this article by Trulia.

Most often people hear the two terms applied to real estate, but in reality, they apply to any type of product market.

Do your research

Now that you know the difference between the two definitions, an effective second step is to do your research on the property that’s captured your attention. For instance, you’ll want to take a look at how many days the property has been on the market. In a buyer’s market, it’s common for properties to stay on the market for some time since there is a lot of competition. However, if you’re in a seller’s market and you notice that a property has not sold after a significant amount of time, that could be a good sign to stay away. In this case, it’s possible that the seller overpriced the property. As a result, it became stale. People then assume there’s a problem with it. If you’re unsure about a property or your current market, ask your realtor. They can provide more information and advice before you make your offer.

If you’re concerned about how long a property has been sitting on the market, check with your real estate agent. He or she can give you an idea as to how long their properties typically sit on the market before being sold.

You’re also going to want to look at the neighborhood – are price cuts common in this neighborhood? In a buyer’s market, price cuts will be common and the competition will be few and far between. Whereas in a seller’s market, properties may maintain their selling prices or they may be sold for more than their asking price.

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Let interest rates be your guides

Ah, interest rates, the least fun part about purchasing a home or building. Interest rates are important not only because they can indicate how much cost will be added to the property, but also because they can indicate the type of market your area currently has.

If interest rates are high, buyers will have a difficult time getting mortgages. In this case, you’ll most likely find a lot of properties at discounted prices. You’ll also notice that prices will decline, indicating a buyer’s market.

When interest rates are low, however, money will be easier to come by, therefore buyers will be flooding the market.

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Check in with Freddie Mac and Fannie Mae

Government entities are great tools when it comes to determining the current status of your real estate market. Buyers can always rest assured that it’s a good time to purchase a home when Fannie Mae becomes involved. Fannie Mae pushes first-time homebuyers to take the property plunge by offering incentives for them. If you see Fannie Mae and Freddie Mae becoming involved, you’ll know it’s a good time for homeowners to buy.  

To better assist homeowners, Freddie Mac launched a financing program called HomeSteps, and another called HomePath. Both participate with a 3% closing cost assistance and lower money down. Whenever these two Government-sponsored enterprises become involved in your market, you’ll discover that it’s best for sellers. And in case you have any doubts, these deals were not around during the housing crash of 2008. Sadly the Freddie Mac and Fannie Mae programs do not apply to property investors, but they are great resources to recommend to homebuyers you work with.

Pay attention to your submarket

When looking for the perfect property, it’s important to know how either type of market will apply to you. When people are on the benefitting side of a market, they “can get cocky and overplay their hand,” says Rosteck. Ultimately, this will lead to losing the property you’ve had your eyes on.

If you’re a buyer and you’ve determined that your area currently has a buyer’s market, it’s possible that things “can be measurably different in the submarkets,” according to Rosteck. An example of this would be your local office space market.

Take the office market in the downtown Cedar Rapids area, for example. Rosteck says that when examining it closely, you’ll find that “the office market as a whole is a buyer’s market with an abundance of properties to look at.” This means that the downtown submarket can be even more competitive than other areas of the city.

In looking at office spaces in the New Bo district or on the northeast side, it’s important to keep in mind that it’s “less of a buyer’s market,” says Rosteck. In these areas, “properties are a little harder to find with owners a little less likely to deal.” In other words, if you’re taking a serious look at an office location in the downtown area, you may want to put in your offer sooner rather than later to avoid losing your chance.

Keep track of the months of inventory

Another way of determining your area’s market status is to look at the months of property inventory. In a buyer’s market, there is typically six or more months of inventory. In a neutral market, you’ll find three to six months of inventory, and in a seller’s market, you’ll discover less than three months of inventory.

Whether you’re a buyer in a buyer’s market or a seller’s market, it’s important to know that either market can work for you as a property investor. Before making an offer on a property, be sure you’ve conducted research on the neighborhood as well as the property itself. It will also be beneficial to keep track of whether or not governmental agencies are making special offers to homebuyers, as this can indicate a buyer’s market. As always, we highly recommend you run the numbers before making any purchase.

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With summer in full flow, thousands of British landlords will soon be waving goodbye to their tenants for another term… Whilst they’re gone, a refit may be desirable. It’s as good a time as any to raise the value of your property.

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As a landlord your income is the rent you receive. It can also cover any other payments received from tenants for services which have been provided by the landlord – these included:

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Being stuck with an uncommunicative douchebag tenant that’s fallen deep into arrears is probably the most frustrating and terrifying scenario for a landlord. It’s truly gut-wrenching.

But what about second place? I’d say that being pinned down with a property that won’t shift for months on end is a strong contender. I’ve personally never been in that situation, but I know many landlords that have, and the root cause is almost *always* the same.

Most landlords and experts will instinctively say it’s because of one or more of the following reasons:

  • Price – the asking price isn’t competitive.
  • Supply – there’s an oversupply of properties in the local area.
  • Photography – poor photography being used to advertise.
  • Rightmove/Zoopla – property isn’t being marketed on the two biggest UK portals.
  • Condition – poor decor, unsavoury odours, general uncleanliness, and cheap and ghastly fittings.

If you are struggling to rent your property, I’d strongly encourage you to investigate each of those areas. However, while they are the most common contributing factors to prolonged vacancies, they’re often not the makeup of the actual cause.

The real reason many landlords struggle to rent their property is often a lot more difficult to resolve, because it’s psychological, and it’s based on ingrained standards. We all have standards, and some are notably lower and higher than others. But the problem is, our standards are based on our own experiences and perception, so it isn’t easy to reason or negotiate with.

The reality is, many landlords put properties onto the market after running a quality assurance assessment based on their own standards, which often doesn’t align with the expectation of the market. It’s easy for me to tell someone their standards are piss-poor, but it’s difficult to convince them I’m telling the truth when their reality is telling them something completely different.

It’s no one’s fault, really. But it’s still a problem that should be recognised.

I remember 5 or so years ago, when I had a couple of school teachers for tenants. They were a pleasant enough couple, but filthy as fuck. The whole place was just cluttered with crap, and they had crammed each room with oversized furniture. Lord only knows how they manoeuvred around the place. On a sidenote, is it just me, or are teachers notoriously messy?

Anyways, when they vacated, the hubby said to me, “The Mrs has been cleaning the place thoroughly for days. She’s got OCD, she’s obsessed with cleaning, it’s spotless. You won’t have to do a thing.”

When I conducted the final inspection it quickly became apparent that their definition of cleanliness was total bullshit. There was dust and cobwebs in plain sight, literally everywhere. The cooker was also smothered in congealed jizz. Either they were severely visually impaired, or their standards were lower than a tramp living under a bridge… and every other person that considers copious amounts of dust inadequate.

In any case, I evacuated them from the premises as quickly as possible (without making physical contact, of course) and called in a professional cleaning company immediately.

Test Case: The property that won’t rent

It must be noted that I’ve been umm’ing and errr’ing for the past 30 minutes on whether or not to use a real example, because it could be it’s directly offensive to someone that probably doesn’t deserve the heat.

But screw it, I’ve decided to bite the bullet, because landlords stuck in this rut can learn from this, even if it’s a bitter pill to swallow. My only hope is that the chap I’m using as an example doesn’t cross paths with this blog post, and if he does, I hope he doesn’t take it entirely the wrong way!

Today I stumbled across a thread on the PropertyTribes forums, where a landlord has been struggling to let his 2 bedroom flat since July. Considering it’s September now, that’s one hell of a long stretch- his pockets must be bleeding.

This is what the landlord said about his property:

It was renting for £975pm. The mortgage, service charge and management fees came to nearly £750pm. It has been vacant since July. I have dropped the rent to £895 but have only have an offer of £800.

I have aranged to meet my agents on Friday.

I am trying to decide what to do with it.

He then shared a link to his rental property on Rightmove, which you can view here.

Bit dingy, ain’t it?

Without trying to sound like a condescending, snobby dick-face… if the landlord is not understanding *why* his property isn’t being swept off the market (which clearly is the case), it indicates to me that his standards aren’t particularly high, or at least, inline with the market’s expectation.

The property is glaringly out-dated, from the grubby bathroom to the lackluster carpets, so the initial £975PCM asking price is scary. Even the revised £895PCM price is a little awkward. But the issue is, he’s not seeing what I’m seeing, otherwise he wouldn’t have created the forum thread in the first place, and contemplating “what to do”

Right? Right.

It would be another discussion if he just openly confessed, “I know the property looks dated, but I just don’t have the money to invest.”, or something along those lines.

The landlord also mentions the following, “The best thing about the flat IMO is its size – it has 50% more floorspace than the flats on the lower floors. Some of that is wasted on a very large bathroom. That is not mentioned in the description.”

To me, that’s another indication that he’s missing the obvious and living in cuckooland; the poor schmuck is under the impression that if he informs people that there’s more square footage of that crap he’ll encourage enquiries! *sigh*

His comment implies he’s not actually getting the enquiries, let alone the viewings, which means protective tenants aren’t liking what they’re seeing from his advert! It’s a proven fact that photos usually do the majority of the leg work when generating enquires, but if your centre-piece is a gloomy kitchen and bathroom from the 90’s… there’s very little gravitation pull, and highlighting more of ‘it’ is just suicide!

It’s not a terrible property by any means, and it’s arguably better than a lot of crap other landlords serve… but is it actually worth £975PCM in its current condition? Bitch, please!

Most people will say, “The problem is the condition of the property, specifically the out-dated kitchen and bathroom (two key areas which notoriously sell properties).”

But that’s not the real problem, is it? The real problem is that the landlord perceives the condition of the property to be acceptable and essentially worth the £975PCM price-tag. And that’s my point; it’s a mindset issue, based on ingrained standards. He’s seeing one thing, and I’m seeing something completely different.

So, so, so many landlords have this issue. I’ve seen genuinely good landlords, who aren’t tight-fisted at all, and have their tenants best interest at heart, that struggle to let their property simply because they’re being guided by their own standards, which is often lower than required.

On a sidenote, I think the letting agent he’s using is providing an embarrassingly poor service, but that’s another issue altogether.

Comparing the market

I did a quick search on Rightmove for 2 bedroom properties with in close proximity and similar price range, and the first result that landed on my radar was this 2 bedroom apartment, £900PCM.

When comparing the two properties, I know which I’d rather snap up. There’s an obvious difference in quality, not to mention photography (which has been proven to make all the difference).

I don’t know the Reading area, so I don’t know if one property is situated in a more premium location than the other. But it’s irrelevant, because I’d be willing to move a little further afield from my desired location if it meant living in a significantly better conditioned property, and I think that’s a general consensus among most folk.

If your property isn’t renting after doing the basic/common checks…

I strongly encourage you to consider that your standards might be lower than the current markets’, even if that’s a kick in the nuts. Like I said, it is a tough pill to swallow. I’m not saying you need to offer high-end properties, I’m saying the price-tag needs to reflect what you’re offering. So if you’re offering a plate of steaming shit, you should be asking for the going rate for said plate of shit!

I would say “check out the competition for a reality check”, but that’s unlikely to work if it’s an issue of misaligned standards. Even if a landlord independently scopes out the competition, he probably won’t recognise the difference in standards, or at least, the gaping holes in their own proposition. That’s the problem.

To clarify, I’m not trying to shit on anyone’s standards here. People should live how they want to live, and I have no qualms with that. But this isn’t about how YOU live, this is about how your tenants live, and it’s about maximising your profits by providing tenants with actual value (i.e. not your perceived value). If you fail to provide, a few outcomes will most likely occur:

  • Excessive vacant periods.
  • You’ll eventually be forced to significantly lower your rent after you’ve wasted time ‘testing the market’.
  • You’ll get dog shit tenants with equally low standards (trust me, you don’t want that).
  • You’ll find tenants that won’t stick around for long because they’ll eventually cotton onto the fact their money can go further. Bear in mind, a high tenant turnover rate can be equally as expensive as long vacant periods, if not more.

It’s also worth noting three other points:

  • The landlord may have made more money if he accepted the £800 offer (of course, it depends on the date he received the offer, and how long it eventually takes to find tenants). This goes back to another big mistake landlords often make: prolonging the vacant period to hold out for ‘top-end’ prices (especially when you don’t have a comparatively top-end product).
  • Generally speaking, if a property isn’t receiving serious offers with in a week or so (especially in today’s booming rental market), it’s safe to assume there’s a glitch somewhere! If there isn’t a serious offer in 3 months, that usually means there’s a fundamental issue with the property, which goes way beyond correcting the basics.
  • It’s common for some landlords to have the complete opposite problem, where standards are so elevated that overspending occurs! But in this instance, you’re unlikely to struggle to occupy your property! In any case, understanding your market is crucial.

In conclusion, don’t be ruled or clouded by your own standards… especially if they’re out of sync with the market!

So why do YOU think the property is struggling? Thoughts & comments all welcome, as usual xo

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