In contrast to popular belief, the automatic assumption amongst landlords is not “as much as possible!”
When assessing what rental figure you should market your property at, you need to consider what is available at the exact time you are marketing.
It is not sensible to think “well, it rented for £950 a month last year and rents are up 10% according to that London based newspaper so I guess £1055”…when another apartment in the block with a sunnier aspect is marketed at £1000pcm.
You should also consider the situation you find yourself in. If you’ve just received the keys to a new buy-to-let, you should price it cautiously so that it lets as soon as possible. If, on the other hand, you’ve just received your months’ notice from your current tenants, you have time to ‘test the market’, safe in the knowledge you have the month to ‘tweak’ things if needed.
Having said that, I’d still advise not automatically extracting the maximum figure you deem possible. By offering a well-presented property at a realistic or favourable price, you will get to choose from a wider pool of tenants. They will also probably look to stay longer in a property they feel they are getting a good ‘deal’ from, which will help to minimise your tenant turnover, wear and tear and void periods.
Consider the apartments I see, languishing on the market for several months at £1,250pcm. Even if tenants are found at this figure, how long do you think they’ll stay before they realise they can get a three bedroom house, complete with garage and garden, just half a mile away for the same price?
Another reason to be realistic from the start is that the first fortnight is often when you get the most interest. It will be amongst the most recent properties on the online portals and e-mailed out to those with alerts set-up. If it’s priced too high, tenants may dismiss it and even when it’s reduced they’ll still disregard it having seen it a few weeks earlier and knowing they’d rejected it “for some reason”.
According to Home.co.uk, it takes 59 days to rent a property priced between £500-£1,000pcm in Bracknell, as opposed to 74 days for those in the £1,000-£2,000pcm price range.
I’d always rather be conservative on rent but receive it 100% of the time from long-term tenants who appreciate living there, rather than squeezing the most I can from someone who ends up either not being able to afford it or deciding it’s not worthwhile staying there.
If you would like a free rental valuation for your property, tailored towards your circumstances and timescale, please get in touch.
