Void Periods: Everything you need to know
Void periods are enough to send a shiver down a landlord’s spine. So how can you minimise the risk?
A void period is a stretch of time when your property is unoccupied – literally void. There can be a couple of reasons for this:
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- Renovation. You may be doing some work to the property before renting it out again
- Yet to find a tenant. You may not have found the right tenant for the property, so it’s sitting vacant until you do
- Previous tenant left early. It may be that the previous tenant broke their tenancy agreement and left, leaving you unable to fill the property in time
Ideally, you want to keep void periods to a minimum, as you want the property to be tenanted in order to generate the income required to cover the expenses.
However, void periods can and do happen. The average property is void for around 3 weeks a year, as one tenant moves out and another moves in. So how can you prepare for void periods and how can you prevent them from happening too often?
3 top tips to prepare for void periods
No one wants a void period, but as we’ve said – they do happen. With the best will in the world, you are likely to encounter void periods at some point in your landlord journey, even if it’s just because the dates between old tenants leaving and new tenants moving in don’t line up perfectly. To minimise the impact on your investment, you need to prepare for them.
As we always say – hope for the best, prepare for the worst!
- Know your limit. We’re always saying how important it is to track your expenses and check in on your finances regularly. As well as your mortgage repayments and insurance costs, you should have an idea of how long your property can be void for before it will impact your bottom line. Use our free Income and Expense Tracker to help you figure it out
- Save towards it. Part of your regular financial check ins should be making sure you’re putting a little money away each month towards potential void periods. This way, you extend the time a property can be void before it becomes a problem. You should aim to have a minimum of 1 month void to prepare for, but 3 months would be a lot better!
- Plan ahead. If you’ve got some renovations planned and decide to do these between tenants, make sure you have a plan for how long this will take. Work often takes a little longer than we plan for, so make sure you build a buffer into your budget in case you run into an extra month
8 tips to minimise void periods
So you’ve got your void period fund saved up, which is great, but you should also do what you can do make a void period a rare occurrence in your landlord business:
- Location, location, location. You can plan to avoid periods as much as possible, even as early as the buying stage. Do your research when looking for an area to buy in, as if you invest somewhere where the rental market is sluggish – perhaps there aren’t many jobs or schools nearby – you could be setting yourself up for more void periods than you’d want!
- Reference your tenants. Do your due diligence when taking on a tenant and make sure they are trustworthy with tenant referencing. This way, you are less likely to rent to someone who may break the tenancy agreement and leave you in the lurch and scrambling for a new tenant
- Stay on top of updates. There’s a lot of competition in the rental market these days and post-pandemic, standards are high, so make sure that you are on top of what tenants are looking for and do what you can to meet those expectations
- Put your best foot forward. Make sure you’re showing your property to its best advantage on the advert. You don’t want potential tenants not even bothering to view because the photographs are bad or there’s no floorplan. Invest in professional photography and floorplans, to show off the property as well as you can. The great thing is, unless you do any major renovations, these will last you a long time!
- Consider the rent. Yes, rents are rising, but there’s also the cost-of-living crisis to consider so ask for a reasonable rent, otherwise you may find you’ve priced yourself out of the market
- Keep your compliance up-to-date. It goes without saying that all of your legal compliance should be up-to-date. Even if you have a tenant, you should not allow these to lapse or you could face fines! It would also delay getting a new tenant in, as you’d have to update them so you can give the new tenant the certificates, which can cause a delay
- Chat with your tenant. If you have a good relationship with your tenant, you’re likely to know sooner rather than later if they’re not planning to renew their tenancy. This means you can get a head start before they officially give notice to make plans, whether that’s organising photographs or dusting off the floor plan
- Be the best landlord you can be! We’ve all heard horror stories about landlords that were so awful the tenants just had to move out. Whether it’s responding quickly to their needs or respecting their space and not just dropping round whenever you like, being the best landlord you can means your tenants are more likely to stay until they have to move on for other reasons
While you can’t control everything, you can do everything possible to avoid a void period in your property, which should take some of the sting out of it when it does happen.