How much discount for 6 months advance? (rent -2011)

zaralondon

Hi all,

Just wondering, keeping in mind the current market in London. What is a fair discount to request for 6 months rent paid in advance?

5%? 10%

Any experiences?

MrsAmanda_2

I'm not a 'professional' landlord, (by which I mean I only have two properties rented out rather than the dozens some posters have) but if my tenants wanted to pay upfront for 6 months, I'm not sure I'd be offering too much of a discount. Interest rates are so low at the moment that I wouldn't earn a lot by having the lump sum.

Maybe others will give you more generous answers :-)

BitterAndTwisted

It all depends on a number of factors. You might be in a good position to ask for a certain percentage a month discount if the property has been empty for some time but on the other hand in London one would need to ask the reason why. I've heard that tenants often bid against each other for good properties in desirable areas.

Are you aware of the possible risks in paying six month's rent in advance?

zaralondon

BitterAndTwisted wrote: »

It all depends on a number of factors. You might be in a good position to ask for a certain percentage a month discount if the property has been empty for some time but on the other hand in London one would need to ask the reason why. I've heard that tenants often bid against each other for good properties in desirable areas.

Are you aware of the possible risks in paying six month's rent in advance?

Thanks for the answers.

Are you referring to the owner being reposessed?

Jenniefour

I think it very much depends on the rental market in your local area - is it hard for LL's to let out properties, are they facing long void periods? Maybe take a look and see how long rentals (discounting the one or two obvious dumps) are around for. A couple of months ago in this area - west London- a friend lost out on three suitable rental properties - because other prospective tenants had actually offered more than the stated rental price. Despite rental money in advance offer. Obviously, the LL's saw no need to take 6 months advance when they were getting more monthly rental anyway, at a time when they were shifting very quickly indeed because of a shortage. In contrast to the very same local market 12-14 months earlier where LL's were openly offering discount to get rental contracts signed before Xmas 2009. So very much down to how quickly rentals of the kind you are looking for are moving in your area at this particular time. Well worth researching. And the rental market can behave very differently from the sales market.

satchmeister

zaralondon wrote: »

Thanks for the answers.

Are you referring to the owner being reposessed?

Or things not working, such as heating, fridge etc . Contractually you can't withhold rent because things have not been fixed but from a practical level it gives you leverage.

G_M

Cannabis farmers/brothal keepers generally pay rent up front ( 6, 12 months) in order to try to keep landlords at arms length.

I would be asking why you want to pay in advance rather than offering you a discount!

DVardysShadow

6 months rent is everything 2.5 months in advance on average [month 1 is on time]. So assuming an interest rate of 2.4%/year, it looks like 0.5% would be fair.

bris

No benefit to a discount from me, so zero here.