Managing void periods in real estate

One of the most stressful situations about being a landlord can be having void periods with your real estate. No landlord ever wants to go through a period of time when the property sits empty and brings in zero rental income, whilst still having to manage expenses such as mortgage payments, council tax and landlord insurance.  As you can imagine, this will have a direct negative impact on your profitability. 

But there are ways in which you can ensure that void periods in your real estate don’t become a common occurrence. There are processes you can put in place to ensure there are smoother transitions between tenants and that protect your rental income. 

This guide has been written to empower you with actionable strategies that can be implemented to give you the best chance possible of minimising void periods. This way, you can become a landlord who is proactive. 

The true cost of a void period in real estate

Let’s first take a look at the realistic implications of having void periods in your real estate portfolio. Many landlords calculate the cost of a void period simply by multiplying the daily rent by the number of empty days. However, the true cost can reach a lot further. 

For example, let’s look at a property with a monthly rent of £1,000.

• Lost rent: 1 month void = £1,000 lost.
• Council tax: You’ll likely still have to pay council tax,  even if the property is empty, but any discounts/exemptions (and any empty home premium) depend on your local council 
• Utilities: Even if all utilities are switched off, standing charges may still apply.
• Landlord insurance: You may still need to continue paying your landlord insurance premiums, but you’ll need to get in touch with your insurance broker to find out what the logistics of this will be. 
• Marketing costs: You’ll need to think about marketing your property again, and there will be costs involved with this, such as advertising, photography and listing fees. 
• Maintenance: You’ll most likely need to inspect the property to ensure there are no repairs or damages. If there are, you’ll need to pay for these repairs. 

So, as you can see, the single void month of a property listed as £1,000 pcm can easily turn into a month where you’re spending an extra £200-£500, for example. Naturally, as the void period goes on, this will become a larger sum of money. 

How to navigate void periods in real estate

Next, we’ll look at different ways of navigating these void periods in real estate with various strategies that can be implemented. 

Pillar 1: The pre-exit phase 

The plan of navigating void periods in your real estate portfolio will begin the moment you first find out that a tenant has served their notice,  ideally 4 weeks before their move-out date. 

1. The pre-checkout inspection

Make sure you conduct a pre-checkout inspection so that you pick up on any significant maintenance issues straight away. This way, you can also get your tenants to fix any damage they may have caused. 

You can explain to your tenants that this will be an opportunity for them to discuss any potential deposit deductions, giving them a clear understanding of what is expected of them in terms of how to leave the property after their tenancy ends. 

Here’s how you can do this:

• Schedule the inspection early on to give your tenants enough time for repairs.
• Look for any damages beyond fair wear and tear that will need to be fixed, such as leaky taps or broken appliances. 
• After the inspection, give your tenants a list of items that need attention before they leave, as this will help them to potentially avoid any deposit disputes while helping with repairs.
• Once you have a list of everything that needs to be repaired, you can begin looking for quotes. You can also book slots with the tradespeople in advance to shave off days or weeks of your turnaround time. 

2. Incentivising show-ready viewings

Another way to minimise void periods with your real estate is to find your next tenant before the current one moves out. This will mean that your current tenant is up for having property viewings. 

Here’s how you can do this: 

• During the pre-checkout inspection, mention to your current tenants that you’ll need to have viewings. Be clear about the notice period for viewings (often at least 24 hours), and make sure you agree on the times with the tenant. 
• If you feel the need, you could even offer incentives like a small rent reduction for their final week or a professional cleaning service after they’ve moved out. 
• Try to be as flexible as possible with viewing times to ensure that you accommodate both potential tenants and your current ones.
• Make sure that all viewings are accompanied and that the personal belongings of your current tenants are respected.  

3. Compliance

You always need to ensure that you are compliant as a landlord, as this can be very time-consuming if it is left to the last minute. 

Here’s how you can do this:

• Make sure you book a new EPC assessment in time before it expires (EPCs are valid for 10 years) and book a new assessment if it has expired.
• Make sure your gas safety certificate (GSC) is in date.
• Is your Electrical Installation Condition Report (EICR) in date? Typically, these are valid for 5 years. 
• Make sure your smoke/carbon monoxide alarms are functional before your new tenants move in. 

It’s best to book all of these tests in for the day after your current tenants move out to reduce downtime. 

Pillar 2: Marketing effectively

When marketing your property, you need to ensure that this doesn’t only take place once your property is empty – it needs to be done in conjunction with your pre-exit and turnaround times.

1. The digital asset library

Always have a bank of high-quality digital assets on hand that can be added to listing platforms once your tenants have handed in their notice. 

Here’s how you can do this:

• Professional photography: Invest in having professional-looking photographs from the beginning. Having good-quality, well-lit images is extremely important in drawing in new potential tenants. 
• Virtual tour/video walkthrough: Offering virtual property viewings will also help in reducing void periods in your real estate portfolio, as it helps narrow down physical viewings to potential tenants who are genuinely interested in your property. 
• Floor plans: Make sure you provide clear floor plans when marketing your rental property, as this will help the potential tenants visualise your property better. 
• Detailed descriptions: Add in all relevant details and information to your property listing, highlighting key features, local amenities and the benefits the property offers. 

Once you have these assets available, you’re able to upload them instantly. This can help reduce void periods, too. 

2. Data-driven pricing

Pricing your rental property accurately is one of the most important things you can do. You have to be able to find the sweet spot, as overpricing it will result in longer void periods, but underpricing it will mean that you’re losing out on money. 

Here’s how you can do this:

• Current market analysis: always look at the property market in your area, specifically focusing on properties that are similar in size and that have similar features. What are similar homes (size, bedrooms, amenities, location) achieving?
• Agent insights: You can also ask local letting agents for their insights on realistic rental values. 
• Seasonal adjustments: Keep in mind any seasonal fluctuations, as rental demand can be higher at certain times of the year. 
• Be flexible: Be flexible in your pricing sooner rather than later, especially if you are getting little to no interest. Marketing your rental property for a lower price to combat a longer void period will often result in more overall rental income compared to holding out for a higher price. 

3. Multi-channel marketing 

Make sure you use as many marketing platforms as possible to make sure you reach a wide audience. 

Here’s how you can do this:

• Online portals: Always list your property on major property portals, for example, Rightmove, Zoopla, or OpenRent. 
• Social media: Make sure you also utilise social media platforms, like Facebook groups or dedicated property rental pages. 
• ‘To Let’ boards: Having a ‘to-let’ sign outside your property can also bring in a lot of enquiries, especially in high-footfall areas. 
• Networking: Use word-of-mouth as much as you can, too, as part of networking. 

Your goal for marketing your rental property is to generate as much interest as possible to limit the chance of void periods in your real estate portfolio.

Pillar 3: The turnaround checklist 

Utilising the time effectively after a tenant has moved out is just as important, too, because your goal is to minimise the time between tenants. 

The exit and assessment

• Final inspection: You’ll need to conduct a thorough final inspection once the tenants have moved out. Compare this inspection to the previous inspection conducted. Make sure you document everything (by taking photographs and writing down notes) and compare it against the inventory checklist. 
• Key collection: Make sure the tenant returns all keys to the property before the next tenant moves in. 
• Utility meter readings: You’ll also need to take final meter readings for gas, electricity and water. Make sure you notify your providers of any changes. 
• Post redirection: Make sure you remind your tenants to arrange their mail redirection. 
• Waste removal: Make sure all the belongings from previous tenants have been removed. If they haven’t removed the waste or belongings themselves, you’ll need to follow the legal guidelines for abandoned properties. 

Cleaning and minor repairs

• Professional cleaning service: You’ll need to ensure that your property is clean and ready for your next tenants to move in. Using a professional cleaning service will help with this. 
• Touch-ups: Ensure that all minor touch-ups have also been made. 

Safety, snags and showcase

• Safety certifications: As mentioned before, you’ll need to make sure that all of your safety certificates and inspections are up to date before the new tenants move in. 
• Appliance checks: Make sure all of your appliances are working, for example, the oven, hob, fridge, washing machine and dishwasher. 
• Final snagging: Do a final walkthrough of the property and look for anything that is missing. 

The welcome pack

Once the property is ready, focus on making sure the arrival of the new tenants is as smooth as possible.

Here’s how you can do this:

• Create a new tenant welcoming pack

• • Emergency contact numbers (landlord, maintenance).
  • Manuals for appliances.
  • Information on local amenities (doctors, shops, transport).
  • Recycling/waste collection schedule.
  • Utility provider details.
  • Wi-Fi details (if provided).
• Key handover: Have all sets of keys ready for your new tenants.
• Updated inventory: Provide your tenants with a comprehensive inventory list, including images. This needs to be signed by your tenants within a specified time. 
• Meter readings: Your tenants will need to take new meter readings. You can either do this with your tenants or instruct them on how to do it themselves. 

Ongoing property management

As much as you want to try your best to minimise void periods in your real estate portfolio, the best-case scenario is to avoid this entirely by retaining good tenants. You can do this by:

• Being responsive: make sure you respond to your tenants within a reasonable time.
• Open communication: Ensure your tenants feel comfortable enough to communicate their concerns with you. 
• Fair rent reviews: Always conduct market research to ensure fair rent increases.
• Regular inspections: Always conduct regular inspections to make sure you catch minor issues before they become bigger ones. 
• Tenant feedback: Ask for feedback and genuinely consider it. 

Are you looking for landlord insurance to protect your investment? At CIA Landlords, we’re able to find the best-suited quote for your needs. For more information on landlord insurance and how to manage your rental property efficiently, feel free to visit our advice centre. Otherwise, make sure to get in touch with our friendly team of specialists at CIA Landlord Insurance on 01788 818 670.