Pub debate on voids and rent

whalster

I caught up with an old friend last night who I've not seen in ages .Over a pint or 2 or 3 or so among other things we talked about levels of rents and voids , I have always rented mine myself ,he has 4 let 3 of which are through an agent .My tenants stay in for ages very low turn around my rents are slightly lower but I have always said this is more than made up with turn around costs and voids . He has an agent who promises to get him more rent than anyone else but he has had some 2 month voids over the last few years .Is there a website out there where these stats are available , I know this is a long shot or what is your experience of this?

BTW if anyone ever gets up to or is in N Yorkshire next time your out try some Great Heck Brewery beer its in a lot of places around york , ' Dave ' is a fine brew

Callie22

My personal experience is that agents will do nothing to keep a tenant in a house - why should they? They make more money from churning tenants, by taking fees off both the tenants and landlords and recommending their own maintenance people for 'refurbishment'. They make far more from that than the 7/8% or whatever they charge per month for management.

SuzieSue

Callie22 wrote: »

My personal experience is that agents will do nothing to keep a tenant in a house - why should they? They make more money from churning tenants, by taking fees off both the tenants and landlords and recommending their own maintenance people for 'refurbishment'. They make far more from that than the 7/8% or whatever they charge per month for management.

Agreed. The OP has the right attitude. By asking a slightly lower rent you have a much greater choice in tenants and can therefore choose people who are likely to be there for the long term and avoid the costs involved in finding new tenants and voids. The sort of people the OP's friends will attract are likely to only want to rent in the short term and so are not too worried about paying a higher rent. As well as the voids, the OP's friend will be paying at least a month's rent to the agent as a finder's fee.

Fire_Fox

Where what stats are available?

whalster

Just checked back in and yes I am sure I am right but where would I find the numbers to prove it ? as said in last post above , where are the numbers ? surely someone must have done some number crunching on some website ?

Fire_Fox

Numbers for what, you haven't actually specified?

G_M

I too don't undertand what numbers you want crunched?

Get a spreadsheet.
Add in monthly rent x 24 months = X (long term tenant). 2 years income

Add in (higher) monthly rent time x (say) 20 months (short term tenant + voids). 2 years income.

Then factor in marketing/tenant-find costs and deduct from the income.

Sorted. 10 minutes.

(or do it over a 5 year period if you prefer)

whalster

Sorry guys should have been a little more clear , I do understand I can compare my yield, voids, average turn around costs and length of tenancy against his by me just picking 4 random houses of ours which just about match his 4 , However to win this argument ( or in PC terms persuade him I am right) I would need to look at numbers over a large sample of the BTL industry. Basicaly has anyone compiled any of these figures? I have searched for letting agent figures on google ,although I am sure it is not in their interest to publish these and from a private landlord point of view I looked at the Shelter website without any luck there .
With all the letting agent news around at the moment with proposed regulation following Scotlands lead or even further to have all in fees someone would have looked at this
still living in hope

propertyman

You are looking for something that does not exist, and while it might be compiled it would be subject to local variation and be out of date before being finished. Various national agents dealing with analysis and investment will have research papers from time to time that could be trawled.

But it would therefore be pretty unhelpful.

The suggestion to review your own yields and the percentage of rental income spent on fees is correct.

The skill is assessing rents locally ( and the underlying factors of supply and demand) to put into that and pitching it within parameters of a hope rent- new agent vs sure to let- old agent, and the watershed between them.

And ensuring that contracts for letting are the one let only not renewals or holding over, arranging your own inventory with a company and doing your own credit checks with an agency and taking up landlord's references.

Unless you are in a depressed area, two months voids? Something is wrong.

whalster

Mmmmmmmm ! like all pub arguments will run into infinity I reckon ,as they say there's a reit way a wrong way n mi own tin pot way

jgh

Fire_Fox wrote: »

Where what stats are available?

Any standard economics textbook. A reduction in sale price is likely to result in an increase in demand. If you reduce your unit price by 10%, as long as the increased demand is greater than the reduced profit margin you make more money.

Eg, sell 100 widgets at 100 pounds gets you 10,000 pounds.

If it costs you 50 pounds to make one widget you net 50 pounds on each widget, giving you 5000 pounds profit.

If you decrease the price of your widgets to 90 pounds, you will net 40 pounds on each widget. If that results in selling more than 125 widgets, you will get more profit than selling 100 widgets for 100 pounds.

Conversely, if you increase your price, you are likely to depress more than the increased profit.

Some years ago locally we had viscious cycle. Taxi drivers were getting fewer customers and so less net after expenses. They applied to put prices up, which resulted in even fewer customers, which resulted in even less net after expenses, so they applied to put prices up, which resulted in even FEWER customers... I'm certain this would have gone on forever until Peter Stringfellow was the only person using the one remaining taxi and paying £10,000 per mile.