How can Landlords help Tenants save money?
The above question may strike some landlords as a bit strange, as generally it is not their job to help tenants save money. However, as the property and private rental markets are currently so unstable, working with your tenants could actually help improve your business and secure your income. At the end of the day, if your tenant falls into rent arrears then you are going to take a cut to your earnings and may even have to start the eviction process, which is why it is better for everyone if your tenants are financially secure. So here we explore how landlords can help their tenants save money:
Increasing Rent Prices
As a landlord you will set the rent for each of your properties based on the market and how much similar properties in certain areas are charging. Therefore, it’s likely that your rent prices are quite high at the moment, however so is everyone else’s. Unfortunately, this isn’t something that landlords can control as the reason why rent prices are so high is because property prices have increased, meaning that in order to achieve return on investment landlords need to set rent prices that will allow them to pay off their mortgages while making a decent income.
Recently, the government’s English Housing Survey revealed that homeowners spend 28 per cent of their weekly income on housing costs while renters spend around 40 per cent. It is no secret that renting a property is now more expensive than owning one, however with the FCA and Bank of England introducing harsher mortgage lending criteria fewer people are able to afford their own homes. What this means is that the private rental sector is seeing an influx in demand which ultimately pushes rent prices up even further.
What can Landlords do to help?
Apart from under-pricing your property there is not much you can do to help your tenants with housing costs, however there are other areas where you can help. For example, you can make sure that they are receiving the best deal possible for their utility bills if you are responsible for arranging suppliers for them. You can also ensure that your properties are well maintained and have energy saving features installed such as insulation and double glazed windows.
As winter is fast approaching you need to start thinking about how your tenants will cope with their rent payments, especially if it is already costing them forty per cent of their weekly income and will soon be paying more in utility bills. If you currently don’t have the funds to make energy saving improvements to your properties then make sure you look into the government’s Green Deal where you can have work carried out for free and the costs will come out of your tenants’ utility bills which will be lower due to the improvements made.
Avoiding Rent Arrears
Rent arrears are something that all landlords worry about, however the truth is that tenants worry about them much much more! Not receiving a month or two’s worth of rent can be handled by most landlords, especially if they have a contingency fund in place or a landlord insurance policy with rent guarantee insurance included, however for a tenant the issue is much more serious. All tenants know that if they consistently fail to pay their rent they will lose their homes, however if they are going through financial difficulties they may bury their heads in the sand.
If one of your tenants has started to miss their rent payments then it is of the utmost importance that you contact them straight away. It could just be a one-off blip, however if it is something more serious you need to address it with your tenant as soon as possible. Firstly, this will enable you to understand the situation better and therefore protect your business, and secondly it will enable you to provide advice to your tenant where you can.
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