The ideal tenancy length for your letting in Clapham, Brixton and Surrounds?
I read the news of the most recent DPS survey and I was surprised to hear that most tenants wanted a short tenancy. Surprised was actually an understatement. I fell off my chair. It's certainly not often that I hear that from would-be renters in my agency. More often than not they ask for longer term because of the costs associated with moving, the security they are after and so forth. In turn landlords generally prefer those tenants who can commit for longer and as a result I turn away people that only want to rent for a short period (12 months or less). Client's preferences, you see.
Long-term vs Short-term
To my surprise The survey, taken by 39,855 tenants who have their deposits protected by DPS, revealed that 80.1% of them wanted tenancies that lasted no longer than 12 months. 34.60% of the total stated a preference for contracts of 6 months or less. That's amazing. Especially this time of year. I can honestly say that a good majority of my landlords would want their property back during a busier time of year so they have the pick of the applicants and tenants bidding up against each other in order to stand a chance at getting their pick of the hot flats in Clapham and Brixton. Why go long? Well here's why... Tenants that are ABLE to offer longer term, in my experience, are a better long term bet. They are confident they don't want to move around (if they can help it). They prefer stability in their lives (they may have had a landlord sell up or move back in previously) and they will take care of your property like a home ( much like you would I'm sure).
Short term AirBnB style
I hear a lot of landlords thinking "I want to raise the rent every opportunity I can." That's right, you can't do that as frequently if you opt for 18 or 24 month tenancies. So match your approach to your situation. Ask yourself whether you can handle a void in order to get things repaired that tenants have failed to mention to you for ages, only discovered by your letting agent after you've given them notice. Can you afford these repairs? Can you afford the new furniture you're going to have to buy (because to attract top rent you're going to have to up your game to stand out). Having said that, some of my investor landlords have turned to AirBnB and are making handsome profits despite their 15% commissions. Do note however you have to be running the operation with military precision, changing sheets/linen, supplying fluffy towels, paying the council tax, WiFi, water, gas, electricity. And voids - it's going to be empty 20% of the time. I would say it's harder work than most envisage. I've even been approached by various management companies who can do this all for you. But... once you've paid everyone are you really better off? Add in the fact that most mortgage companies don't like these short term lets and you're back to where we started...
When is the best time?
For those of you that read my blog religiously you'll know that the best time to let your property in Clapham, Brixton and Surrounds is definitely the summer. The demand peaks in August. So if you are letting today I would most certainly opt for a tenancy length 18 months or even a shade longer to try and capture that peak demand.
If you are looking for advice and help with your property investments, be it in Clapham, Brixton or further afield then please get in touch. I source properties regularly and carry out due diligence reports for a number of investors and if you are looking to expand your portfolio profitably then talk to me. Drop me a line on firstname.lastname@example.org today.