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Buy to let investment

Empty properties

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As a landlord you are likely to face periods of time when your property is empty. And an empty property is one of a landlord's worst enemies.

Why? Because an empty property quickly becomes a draining cost centre. One of the worst and most common problems that you will face as a landlord is an empty property and the ensuing lack of rental income. There are certain costs attached to the property that you must cover regardless of whether it is bringing in the money to cover them. The primary one is your mortgage repayments, but you must also continue to pay council tax, water rates, electricity bills and insurance. The problem of these costs mounting up will be made all the more acute if you have borrowed heavily and really rely on the rent to meet your mortgage repayments.

The average length of time a property remains vacant obviously depends on the price, presentation of the property, area and demand for that type of home. However, a vacant period of 4 to 6 weeks is often the norm in urban areas, but some properties remain vacant for three months or longer. Even if you are lucky enough to get an immediate turnaround in between tenancies, you are likely to face a ten day wait whilst the paperwork and referencing are all sorted out.

Although you may be fortunate enough not to face lengthy spells of untenanted property, you should generally make sure that you budget for one to two months per year of void, where you will not be receiving rental income.

Other risks
All empty properties are at risk, particularly during the winter. In the cold season, you should arrange for the central heating to be run at a low setting. You should also consider having your property drained of water. If you get a leak that is left unattended, you can end up doing serious damage to the property and being unable to let it out for a further period of time.

Empty properties are also at a greater risk of vandalism, squatting and burglary. Consider putting a light on a time switch, visit the property regularly to clear away post, and remove any items from the property that are of particular value.

Two important things to remember with regards to empty properties:

  • Inform your buildings and contents insurance provider and make sure that you comply with any requirements that they may have. They may ask for special security provisions or may have an additional premium if the property is likely to be empty for longer than a set period.
  • You may face extra charges from lettings agents if you require them to manage your property whilst it is empty.
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