Making the property habitable
Cleaning, decorating, and repairs may be required so having a contingency fund will allow you to carry out work quickly, to help minimize void periods.
Minimizing void periods
Void periods are when your property has no tenant – and you have to pay all the costs yourself, including mortgage and utility bills. Void periods turn an income-generating property into one that costs you money so, while they cannot be avoided completely, they should be minimized as much as possible and you should have a contingency plan in place.
Be open to a lower rental
One of the biggest mistakes landlords make is to hold out for an unrealistically high rent, which can result in their property standing empty, sometimes for months at a time.
In almost every case, accepting a lower rent is a wiser move, as the tenant will be contributing towards your costs, even if they don’t cover them completely.
Monthly costs = £500
Property stands empty for two months = a loss of £1,000
Property rented for six months at reduced rate of £450 per month = a loss of £300
Make your property attractive to tenants
A few hundred pounds spent doing up a property to make it attractive will make it stand out from the crowd and easier to let, possibly at a slightly higher rent. This is a worthwhile investment if it avoids your property standing empty and costing you money.
Ideally, you should keep a minimum of three months’ mortgage payments in reserve to cover any void periods, emergency maintenance, and increased costs.