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”
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