‘Finding A Tenant’ Guide For Landlords- How To Find Tenants
Are you struggling to find a tenant or simply looking for the most efficient methods of finding a tenant? Then this might be the article for you.
If you’re reading this guide, it probably means you’re trying to find tenants without the help of a traditional high-street letting agent. Wise decision, and you’ve come to the right place for guidance.
A common misconception is that letting agents provide us with a skill set which can’t be duplicated by the average person/landlord. We assume that they have an advantage over us by having all the trade tools and resources. In reality, that;s just a smokescreen perception. All agents provide us with is a service which we don’t know enough about to confidently duplicate. But when you break it down, it’s not really that difficult or time-consuming to learn the essentials and more, which will enable us to find and manage tenants ourselves… for a fraction of the cost!! In fact, the methods I discuss in this guide won’t cost you more than £60. Now let’s compare that to prices the average high-street agent charges.
I’ve seen agents charge between 8%-15% of the rental income for their services, depending on the type of service. The most basic service agents’ offer is typically a “tenant-only” service, which is where an agent will find a tenant and leave the management role up to the landlord.
Let me show you how the figures stack up with a real example:
Let’s assume an agent has found me a tenant willing to sign a 12 month agreement. The rent is £1000 per month. Based on the lower end 8% fee, an agent would charge £960 as a fixed annual fee for their service. On top of the regular service charge, most agents charge a renewal fee, which means I would need to pay an additional annual fee if I wish to keep the same tenant after the 12 months expires. As you can see, the cost can easily escalate, and it usually does.
Over the past 5 years I haven’t used a single high-street agent, and my cost for finding tenants has been £0 – £100.
So, it’s your call, you can either spend £1000 on an agent, or learn how to do it for £0 – £100. It’s a no-brainer for me. Remember, a buy-to-let investment is a business, so it’s about keeping costs down when and where it makes sense.
How to find tenants… efficiently and cost-effectively!
Here’s a few ways landlords can maximize the chances of finding tenants efficiently and cost-effectively, consequently minimizing void periods and saving a pile of cash!
1Online Letting Agents
High-street letting agents generate most of their enquiries through websites like Rightmove and Zoopla. Long gone are the days where they relied on local newspaper adverts and walk-in trade. The only problem for private landlords is that they can’t directly put their vacant property on websites like Rightmove and Zoopla. However, that’s where an Online Letting Agent can help… and at very little cost.
All you need to do is sign up to an online letting agent, fill out a form which consists of your property details (including pictures), and for a small fee (£50 on average) they will market your property across all the biggest property portals like Rightmove. When choosing your “find a tenant” package, it’s important to ensure your property is getting marketed across Rightmove and Zoopla because they’re the biggest two!
All you need to do is watch the enquiries roll in and arrange the viewings. Go here for more details on online letting agent.
Many online letting agents will market your property on Gumtree as part of their service, but also many don’t. The good thing about Gumtree is that it allows private individuals to directly use their platform (much like ebay) for free, and you don’t need to go through an online agent.
I’ve had huge success with Gumtree in the past, so I highly recommend trying it out, especially since it won’t cost you a penny. I’ve even used Gumtree WITHOUT using an online letting agent before, and I ended up finding tenants pretty quickly.
Obviously marketing your property on the likes of Rightmove, Zoople & Gumtree is the optimal method for finding tenants. However, if you’re really on a tight budget, and want to find tenants for pretty much nothing (i.e. without an online agent), I highly recommend using Gumtree.
Ever heard of DSS tenants? They’re essentially tenants receiving Housing Benefits, which means much of their rent is covered by the government.
As a landlord, you may come across DSS tenants at some point, even if you don’t know it. In any case, I advise all landlords to get familiarised with what a DSS tenant is before even looking for tenants. Just so you know what you’re dealing with.
The beauty with DSS tenants is that they’re particularly easy to find and at no cost. Needless to say, there is a reason for that. But i’m not here to judge, I’m here to make you aware of your options. Here’s a guide on how to find DSS tenants for free.
During your search for tenants, it’s highly probable that a DSS tenant will apply, and you need to know exactly what that means and not blindly just ignore the potential implications.
4 Social Media
As much as I hate to say it, Social Media actually works.
It’s not the most effective method by a long shot, but it’s amazing how effective sending out a tweet or updating your Facebook status at the right time can be. Even if it doesn’t work, what’s the worst that can happen?
Most people these days are involved with a social media platform, whether it be Facebook or Twitter. The great thing with these social networking sites, Facebook in particular, is that they provide a quick and easy way of connecting with all your local friends and family.
I’ve actually found a tenant in the past by setting my Facebook status to:
“2 bedroom property for rent in Church Langley, Harlow. £775pcm. Anyone interested, or know anyone interested?”
The thing is, you NEVER know who is looking for a property to rent, or who knows someone who is looking Spreading the word among your local peers via Facebook is always worthwhile because it’s so damn quick and easy to do.
5Ask your neighbours
This sounds odd, but it’s incredibly effective. I’ve successfully found tenants a few times by doing this.
All I did was ask the neighbours (of the BTL property, not my home, although you could ask both sets of neighbours), and enquired whether they knew of anyone suitable that would be interested in renting the place next door them.
You might be pleasantly surprised by this tactic! It’s another one of those methods that is so quick and easy to execute that it doesn’t make sense not to at least try.
Before even starting the finding process, you need a strategy.
Well, not quite a strategy, we’re not invading a county here. But you will need to determine what it is you’re actually offering and how you’re going to deliver it.
It doesn’t matter if you’re leading the search party to find tenants, or whether you’re passing the responsibility onto a letting agent, you still need to ensure any marketing material put out there is appropriate and effective.
1Research / Asking price
Every landlord wants to charge as much as possible, maximizing their rental income. However, that can often be a damaging decision because it could mean less enquiries and a longer vacant period, which will end up costing more than if you had marketed your property competitively in the first place.
It’s important to ask for the going rate, and no more, even if you think your property is worth more. Price yourself based on what the market dictates, and not what your ego is blubbering.
I recommend keeping an eye on the rental rates in your area, and then marketing your property just under market value i.e. if the average for a 3 bed semi is £1000, market yours at £950. You’ll generate a lot more enquiries during your marketing campaign, which will reduce the void period, and potentially make you more than than if you had marketed at the going rate or above. But more importantly, the tenant will feel they are getting a good deal and therefore will stay longer– a tenant that stays longer keeps your overall costs down and your profit steady.
How much should you charge? Look through websites like Rightmove/Zoopla and see how much other properties are demanding in the same area for a similar property. It might also be worth talking to a few letting agents. However, bear in mind, agents generally price high because their commission is a % of the rental amount, so don’t just accept their word, do you own research.
It doesn’t matter if you’re advertising on a shop window or on Rightmove, you still need to make your proposition appealing and easy to digest. Getting eyes on your advert isn’t enough. It’s a start, but it won’t generate the right enquiries.
One of the biggest mistakes landlords make with their adverts is that they’re lazy- they don’t provide anywhere near enough information. Not only does that reduce enquiry rates, but it also opens the door for a lot of time-wasting.
Your advert should be descriptive and informative. Provide relevant details and highlight features:
- Public transport links
- Local schools
- Crime rates (if it’s low)
- Parking space
- Front/back garden
- Number of bedrooms and dimensions
- Number of bathrooms
- Condition of property
- Local amenities/attractions
- If furnished, include items e.g. sofa, tables, beds etc
- Mention any white goods that come with the property
List everything and everything that will add value, but make it easy to read and don’t go over the top.
Consider being more accommodating and you’ll open up your audience. For example, according to a recent survey by the Dogs Trust, 78% of pet owners have experienced difficulty finding accommodation which accepts pets. And according to ‘Pet Friendly Rentals’ by not accepting pets, you will be decreasing your potential market by 50%.
If you are a liberal landlord, ensure you promote it in your advertising campaigns. If you’re prepared to accept tenants with pets, ensure your marketing material says “PET FRIENDLY” It could have a significantly positive impact on the success of your marketing.
Trying to reach out to every demographic is like trying to please everyone. It never works, and it’s generally a waste of time.
Don’t try to attract students, families, young couples and professionals all at the same time. You need to determine what your property is best suited to host, and that’s usually best determined by understanding the needs of the different tenant types. Once you know that, you can build a marketing campaign around your key audience and have a much more effective campaign, which results in higher conversion rates.
For example, if you have a 1 bedroom flat, you’re going to be targeting couples and/or single tenants. Make it clear that your property is PERFECT for either of those tenant types, and mould your property around that demographic. If there’s a spare room (not quite big enough for a bedroom), make it suitable for “office space”, and not a “playroom”
Think about your key audience and consider their needs and apply it to your marketing campaign by preparing your property with their needs in mind!
If you’re really struggling to find tenants, despite the fact you know you’re offering a decent property, it could be a case of having stiff competition. When tenants are spoilt for choice in a booming market, they’re going to take advantage of it- and you can’t blame them for it. So it might be a case of ‘dangling a carrot’, so to speak.
Spend a little extra by giving your prospective tenants incentives to choose your property over someone else’s. Incentives like free broadband and/or digital TV are always desirable features.
While this extra outlay may seem expensive, it’s not, especially if it means filling a void that just doesn’t want to get filled (insert sexual innuendo)!
More details: Provide tenants with incentives
Don’t understand the power of images.
Images generate leads, there is no doubt about it.
Every time I see a rental property marketed on a website like Rightmove without images, I want to bang my head against a brick wall. It’s literally money down the drain, and the agent responsible should be hanging their head in shame.
High quality images are one of the most powerful marketing tools. Prospective tenants are much more likely to enquiry about properties with images than without. Would YOU enquiry about a property you can’t even see? It’s unlikely.
Take high quality images and let your pictures do the talking, it’s imperative.
Referencing / Viewings
Generating enquiries is only the first step of filling your vacant property, and it’s definitely NOT the most important step.
Finding “good tenants” is key, because bad ones will chew through your time and profits, and quite possibly sink your entire investment. And trust me, there’s no shortage of bad tenants.
It doesn’t matter how or where you source a tenant, whether it be through an experienced local high-street letting agent or whether you take matters into your own (un)experienced hands, landlords are ALWAYS prone to falling victim to rogue tenants. The best we can do is minimise the risks, and something we should all be doing. Thorough tenant referencing is crucial, and that truly begins at the viewing stage.
Lettings agents take viewings on a day-to-day basis, they’re professionals at it. They know what to say and how to sell your property. So if you’re using one to take your viewings, you needn’t worry. But if you’re going to be personally taking viewings, then you need to be prepared.
Here are a few of my top tips:
- Don’t stop taking viewings: so many landlords make this reckless mistake, so I urge you to refrain from falling victim because it may end up costing you.
Do NOT under any circumstances stop looking for tenants until you have completely secured a tenancy, which means someone has 1) paid their deposit 2) paid their first month’s rent 3) signed contracts 4) moved into the property (strictly speaking, point 4 should not even occur unless 1-3 have been completed).
Until all the above is fulfilled, keep on taking viewings and processing applications. Tenants frequently delay move in dates or pull out of the deal all together, and the majority of the times, there’s little landlords can do to recoup that lost time/money because nothing has been signed.
Don’t take your tenants word or allow them to earn your trust at this early stage, regardless of how much interest and intention they show, it means nothing until they actually move in. Absolutely NOTHING!
- Be flexible: try to be flexible with you timing and availability. You want as many people through the doors as possible, so if that means you have to postpone meeting your mates down the pub, to squeeze in a viewing, then so be it. Tenants rarely wait around, so if you leave them waiting too long, you’re effectively telling them to go away.
- Know your property: you should know the details of your property, which includes: 1) how much the council tax is 2) which utility suppliers are currently connected to each service 3) how the boiler works 4) location of local amenities. The more you know, the better. Be prepared.
Be honest: if you don’t know the answer to a question, be honest. Don’t go down the path of fabricating answers, because it will comeback and haunt you. Furthermore, don’t make promises you can’t keep, always be direct and honest.
Cover all the essential details: reconfirm with the tenant what you expect in terms of rent, the length of the tenancy and the conditions you have in place regarding smoking and pets.
Ask questions: don’t be afraid to ask the tenant relevant questions, like why they’re vacating their current premises, how much they’re currently paying etc. Be curious and don’t be shy.
All these questions will help give you a sense of the tenant’s character and intentions, which is extremely important.
- Be on time: The only thing worse than knowing little about what you’re selling is turning up late to sell that product you know so little about. Be respectful by being on time. Punctuality goes a long way and starts the process off on a positive note.
- Don’t be pushy: if you need to force a hard-sale, then there’s something wrong with the property. If you done your homework and prepared your property appropriately, it should sell it self.
Extra resources for processing applications
This is by far the most important step of finding a tenant! Tenant referencing. So many landlords casually skip past this step, and then they complain when they get screwed over by rogue tenants.
Finding good tenants takes due diligence, and a lot of it is down to common sense. Tenant referencing is usually broken down into 3 areas:
- Employment history
- Rental history
- Credit history/rating
They’re the aspects letting agents will usually focus on. However, that’s just scratching the surface. Other factors like gut instinct, personality, first impressions etc. they can all help build a case for your tenant. I’ve written several articles on referencing tenants, and I invite you to read them in order to minimize your risk:
Before letting your property and taking viewings, there are just a few bits you need to take care of…
It goes without saying that no one wants to live in a miserable bucket of turd. Before taking viewings, make sure the place looks clean and smells clean. And, don’t neglect the garden :)
A well presented property will get snapped up quickly as long as the price is right. Remember, there’s no point taking viewings if you don’t have anything decent to sell, otherwise you’ll be wasting everyone’s time, including your own.
Every day new and experienced landlords are getting prosecuted across the nation for failing to meet their legal responsibilities and obligations. They’re literally having to pay thousands of pounds in penalties. It’s scary stuff. Avoid this mistake.
Before letting your property, you should ensure certain legal requirements are met, such as:
For more details on the above and other landlord legal requirements, go to the Landlord Legal Responsibilities, Obligations & Regulations post.
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