No landlord likes a void period – the phrase used to describe a period of time when a buy-to-let is empty and devoid of tenants. While it’s quite usual to have a couple of days of an empty property between tenancies, when cleaning and running repairs can be made, there is less of a positive spin if your property lies empty on the open market.
The news coming from landlords, especially those with a portfolio of properties, is one of worry. The Telegraph recently ran two articles, highlighting how many property investors will consider exit strategies in 2022 – a result of rising interest rates, compliance complexities and the forecast cost to bring properties in line with the Government’s green energy push.
The coming months may see a flood of buy-to-lets being sold – seen as a self-preservation measure by many investors who have been squeezed out of the private rental sector. The phrase ‘cutting your losses’ comes to mind but landlords need to be careful regarding the costs that can mount while their property is empty and up for sale.
A buy-to-let can remain unsold for an unspecified length of time when you’re at the mercy of the open market. Costs will be incurred every day the property is vacant, and this will chip away at any capital accrued or profit held, so minimising the void is crucial.
There is the most obvious cost – a lack of rental income. If you’re using a High Street agent to sell your property, they’ll undoubtedly want it free of renters to appeal to the widest buying audience – an issue if you have sitting tenants. If you’re blessed with a quick sale, you may only have to self-fund a mortgage payment for a month. If the sales market is challenging – or maybe you have a short lease – be prepared for a lengthy spell with a ‘for sale’ sign outside and a continuation of mortgage repayments without income.
There are also hidden costs that can stack up during a void period. A landlord becomes responsible for all utility bills accrued between the check-out of the last tenant and when a new owner completes their purchase. Thankfully these bills will be relatively low - to keep the central heating ticking over in cold weather and a small drain on the electricity to keep wired-in appliances running, for example. Do, however, expect ‘standing’ charges during voids, even if all utilities are switched off at the mains.
Another more substantial void period cost is council tax. Although some local councils will offer discounts when a property is unoccupied, it may depend on whether the let is furnished and for how long the property is empty. Sometimes the discount is so small it’s not worth the landlord’s time in applying.
Landlords often overlook the cost pitfalls of a property being physically empty and taking your eye off the ball can lead to unexpected bills. Unless the let is inspected on a regular basis – a service that may itself incur a fee from a property manager – there’s no way of knowing if a small leak in the bathroom has developed, or if that leak has turned into a flood. Damage in empty properties is one of the most common reasons for insurance claims, which brings us on nicely to the next cost.
An empty property on the open market still needs insuring. All manner of issues could arise – accidental or malicious damage, burst pipes, vandalism, pest infestations, fire – and only full paid-up buildings and contents insurance will provide adequate cover.
Sell direct for zero void periods
Our property buying service eliminates void periods altogether. When you sell to LandlordBuyer, you benefit from:
- No waiting for open market buyers: rather than risk the volatility of the open market and the fickle nature of buyers, we’ll make you a cash offer and become your guaranteed buyer immediately.
- A completion that suits you: coincide the completion of your sale for when your tenant moves out and achieve a seamless transfer of ownership and no void period.
- Sell with sitting tenants: cut short the entire evictions and sales process by selling to us ‘as is’ – occupied and with tenants in place.
- Halt ongoing void periods: if you’re already on the open market with no buyer in sight, we’ll make an offer on your property, with completion in as little as 7 working days.