Failure To Plan Is Planning To Fail
A recent survey by a national lettings agency has highlighted financial losses incurred by landlords due to failing to plan for unexpected costs.
Landlords pay an average of £1500 (GBP) per year out of their rental income on covering tenant rent arrears, maintenance and repair bills and void periods; a figure that equates to over £2 Billion (GBP) per year nationally, according to the survey by Northwood.
The survey also revealed that more than 80% of the landlord who took part in the survey received less overall income from monthly rent payments than they had originally planned for because of unexpected costs.
One of the heaviest costs faced by landlords are void periods between tenancies, even with tenant demand currently at an all time high.
Half of the survey respondents admitted to losing out on approximately 3 month’s rental income each year because of having empty properties.
Similarly around half of the respondents without Rent Guarantee Insurance also experienced late or missing rent payments on a regular basis.
Nick Cooper, managing director of Northwood, commented on the findings, saying “Landlords have recently been under fire with accusations that tenants are victims to greedy landlords, but this research highlights that landlords too face a number of difficulties. The amount of money being paid out for unexpected costs each year is staggering, and with tenant arrears and vacant properties a very real concern, landlords can be hit hard.”
Legal 4 Landlords spokesman Sim Sekhon said “Landlords need to take action to prevent any loss of rental income, that is why we developed our award winning Rent Guarantee Insurance to help ensure a regular rental income. Having comprehensive landlord insurance can reduce the impact of costly repairs and regular maintenance can remedy minor issues in a simple and cost effective manner. We also recommend that landlords begin marketing their rental property with a reputable agent the same day as the existing tenant gives notice for maximum exposure to potential new tenants”.