Setting The Correct Rental Price Could Save You Hundreds Of Pounds

I have often been asked the question of when should a landlord start marketing a property and at what price?  In my experience, the two go very much hand in hand – the question really is “When will the property be vacant?” The answer to this question will determine your marketing strategy…

enquiries

When should I start to market my property to rent?

Consider the chart above.  Here we have an 8 week countdown before a property becomes vacant.  Why 8 weeks?  Firstly, you, as the landlord will be required to serve a 2 months’ notice under an Assured Shorthold Tenancy agreement, known as a Section 21 Notice.  This would be regardless of whether you are in a fixed term contract (i.e. 12 months) or on a periodic tenancy (month-to-month).  During those two months, you are able to remarket the property.

The first 4 weeks are crucial and this is often where we see landlords make the mistake of sitting tight and holding out for as much rent as possible.  It is often forgotten that the majority of tenants looking to move will also either be on notice to vacate their current property or they have to give once months’ notice to their current landlord.

Therefore, ideally, you would want to have secured a new tenant by week 4 so that during the last month of your tenancy i.e. week 5 – 8, you know that you have a new tenant lined up and therefore avoid any void periods.  If you only manage to secure a tenant in the last 4 weeks of marketing, chances are very high that the tenant won’t be able to move for at least another 4 weeks – leaving you with a mortgage to pay and loss of rent.

What rent amount should I go for?

There are many resources on the internet when you can start to get a picture of what the rental market looks like in your area.  As a company, we market our properties on the likes of Rightmove, Zoopla, Prime location etc. and these websites combined hold a wealth of information to guide you when it comes to determining your price.

Put yourself in your next tenants shoes… do a search on one of the aforementioned websites and see what other 2 / 3 / 4 bedroomed properties are available in a ¼ mile radius and then widen the search to get a bigger picture of what’s available.  You are looking for ‘comparables’ to your property i.e. same kind of décor, style of property, location to services etc.

Once you have identified a few, take a look at how long they have been on the market for.  This is a great indication as to whether either there is something fundamentally wrong with the property or it has been priced too high.

Make sure you also search the properties that are marked as “Let Agreed” as these will be the strongest indicators of price.

And finally, again, considering the graph above. As you can see, although a crude example, this is generally the story when we market a property on behalf of a landlord.  If the average price band in an area is say £900, however, we start at £1000, the number of enquiries are relatively low.  However, as you start to reduce the rental amount, typically, the number of enquiries increases.

The best advice we could offer at this stage is firstly; market the property just under market value to encourage high levels of enquiries or secondly, if you do start at a higher price point, to reduce the rent by between £15 – £25 every week the property is marketed online.

I have a landlord who recently advertised a 1 bedroom flat in London for £75 less that the market average – he received 16 enquires within 24 hours.  Now, he arranges a block viewing and has the pick of the crop.  Not only will he find a great tenant, the tenant will be more than likely to remain in the property long term as they know they have a good deal!

Rightmove provide LettingaProperty.com statistics on the activity of your advert once it has been running for 7 days.

These are indicative statistics of how well, or not, your property is performing in the market at that moment given the supply and demand in your area.

Ask your landlord team for a copy of a Property Report and consider why, with the interest or lack thereof, it has resulted in the number of viewing requests you have received.

Some further tips below may help you in determining what you are going to do next with your advert:

  1. Could you put on more or better photos of the property?
  2. Is the first photo you have your best one? If not you can drag them around easily within your advert on Lettingaproperty.com.
  3. Does your advert description sell the property with information a Tenant may need to know i.e. room sizes, floor plan, good transport, accurate information about furnishings.
  4. Do I have an Energy Performance Certificate?
  5. Should I get a To Let Board? If you get a lot of foot/car traffic past your property, yes you should.
  6. Are there any conditions on my advert that I could be more lenient with e.g. Term length too long, pets may be considered and students with guarantors etc.

To summarise, the key points to take away from this based on our years of experience in marketing property online are:

  1. If you can, market the property with 2 months’ notice
  2. Do your market research and know who you are competing with (other properties)
  3. Either price the property just under market value or
  4. Reduce the price each week the property is online
  5. Take a look at the top tips and incorporate them where possible.
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