I know that many in property rental are focused, but I suspect that plenty of landlords drifted into the business without clear direction. With property one of the few investments delivering decent returns, that’s understandable. You sort your buy-to-let purchase and think about the detail later, hoping that the ideal tenant will find you.
But times are changing. The numbers who rent – and rent long term – has increased. While rents in certain areas and some cities continue to rise, the political climate is shifting too. Landlords are increasingly taxed and regulated. There are calls for rent caps and community letting agents with housing schemes operating on a not-for-profit basis. There are suggested ‘lifetime’ tenancies for seniors and a proposal was made at the recent Labour Party conference for a Rent to Buy scheme applicable to the private rental sector.
Whether any of these ideas will be implemented is open to conjecture, but if they indicate anything, it’s that there is no such thing as a generic tenant. That’s why I believe that all landlords – and potential landlords – should think seriously about the market niche they want to occupy. Do they want to serve the needs of highly mobile 18-30-year-olds or to give assurance and stability to older tenants, making adaptations to living spaces? Do they want to be the family-friendly landlord or the one who offers luxurious standards of finish for the more affluent tenant?
This target market focus may come naturally to the more ambitious or corporate landlord. When the strategy is designed to ensure a certain rate of return for investors, there’s no room for error. Chopping and changing erodes profitability and fails to satisfy the customer. It also confuses the brand, but the principles of finding and focusing on your niche should apply to landlords of all sizes. Even those with a single buy-to-let.
As an example, Sonya has just two properties, both of which she has finished to meet her own aspirations for environmentally friendly living. She has replaced glazing with the most energy-efficient alternatives and updated perfectly functional boilers with the latest fuel-saving versions. She tells tenants about local recycling initiatives and renewable energy suppliers, provides composting bins and water butts, and the list of small changes she has made add up. She’s charging a little more than the average rent in her area but has no shortage of people getting in touch. She’s investing in another property and planning to keep things green. As she says, “Climate change affects everyone, not just those lucky enough to own their own homes. Tenants care about these issues and the places they live should respect their ideals.”
Everyone gets disgruntled when their needs aren’t met but Sonya has spotted a niche that works for her and her customers. If an army of small-scale landlords can use this principle, we’ll serve our customers and ourselves better. We will generate proved relationships between private landlords and their tenants and that will, I believe, go a long way to quelling the complaints of the critics.