Many property investment cash flow models suggest that landlords plan for a four-week vacancy every year. Four weeks? That’s a huge expense to landlords!
If you’re experiencing four weeks’ vacancy in your rental property, it’s time to take another look at how they’re being managed. In our experience, there’s no excuse, especially for a portfolio of properties, for them to have an average let of 51 to 52 weeks per year.
How to achieve an average of 52 weeks’ let per year
The 52 week target will be reached by re-letting the property within the 21 day notice period. Here’s your guide on how to do that.
1. Start marketing immediately
As soon as you have received notice from your tenant, arrange to market the property and run open homes. (And if you’ve read the tips on For Rent signs and internet advertising, you’ll be able to start the marketing immediately.)
2. Arrange renovations right away
If your property requires some renovation and maintenance, then arrange all trades to start after the tenant vacates. Use the 21-day notice period to source all quotes from plumbers, builders, painters, etc. and have them agree to your renovation programme.
The 21-day notice period should also be used for your tradesmen to arrange their materials, so that they’re ready to get to work on the first day that the tenant vacates.
Any fabrication should also take place during this time. For example, your kitchen supplier should have fabricated new kitchen units and be ready to install them as soon as the tenant moves out. Similarly, your carpet and curtain supplier should be ready to install these items as soon as the tenant vacates.
3. Focus on finding A1 tenants
Not all tenants are good tenants: you need to focus on finding A1 tenants. They’re the ones who’ll pay market rent; stay long-term; and cause less damage and wear and tear. You’ll find plenty of advice on how to find A1 tenants on this website.
That sounds almost too easy – does this really work?
Yes, if you focus your marketing and renovations in this way, your vacancy rate should be minimal.
For one property let twice over a five year period (say 2.5 years for each tenancy) and allowing for a three-week renovation, the occupancy rate is 51.4 weeks per annum or 99%.
Is that good for cash flow? Of course it is! And this scenario is improved even further when you have a number of tenancies lasting five or more years.
The example in this article demonstrates the kind of results Bridgman Property Management is achieving. If you’re still tolerating three or four weeks of vacancies per year in your investment properties, it’s time to speak to us!
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