One month of lost rental income can knock your property cash flow and profitability for SIX! Minimising the void periods is essential if you want to maximise your property cash flow. There are three common instances when you are most likely to experience void periods:
a) when a property has first been purchased and is getting ready for let
b) when your current tenants are moving out and new tenants are due to move in i.e. between lets
c) in the quietest months i.e. summer holidays and Christmas time
Let’s look at each of these further and see how we can make sure we do not suffer these voids:
Getting a Property Ready for Let
If you are buying a property to let out then make sure that you can get the keys wherever possible (i.e. new builds, vacant properties) at the time when you exchange contracts. This means that you will then have time to get the property ready and start marketing before you actually complete on the property purchase. You can then arrange to have the tenant move into the property as close to the completion date as possible.
If it is not possible to get the keys on exchange of contracts then make sure that you are still advertising the property before the completion date and arranging wherever possible to carry out the viewings as soon after the completion date as possible.
Void Between Tenancies
The last thing you want to do is start advertising your property when your existing tenants have moved out. So, in order to get around this problem you should write a clause into your tenancy agreements saying that once notice has been served to vacate the property by either party, viewings to re-let the property can commence. Make sure that your tenants fully understand this clause and that they co-operate with arranging viewing times for new, prospective tenants.
Void Over the Quieter Months
Wherever possible, try to avoid tenants moving out of properties in the quieter months, especially August and December. If you find that this could happen then try to get the tenants to stay for the extra month. Consider changing the tenancy agreement to seven months so that it doesn’t end in one of the quieter months. This will help you to make sure that your property is always let during the quietest months of the year!
