‘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. Good move.
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, 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’ve not used an agent once, 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.
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!
Market your property on the biggest property portals online, like Rightmove
This is by far the best and most cost effective way of finding tenants, in my opinion. Ignore everything else on this damn page if you must, but trust me on this one!
Private landlords can’t directly put their vacant property on websites like Rightmove and PropertyFinder, but an Online Letting Agent can, and at very little cost. Here’s a list of websites that will allow you to advertise your rental on Rightmove.
These websites will charge a small premium for the service, but it’s worth it.
It’s worth noting, most high-street agents generate most of their enquiries through websites like Rightmove.
Target a key audience
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!
Make sure your property is well presented
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.
Be realistic with your 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 as the market dictates.
By keeping an eye on the rental rates in your area, I would advise 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, and 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 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.
Consider being more liberal
A lot of landlords refuse to give tenancy to tenants with either DSS Tenants or Tenants with pets. Consider being more accommodating and you’ll open up your target 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 accoridng 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. For example, tenants are finding it increasingly difficult to find landlords that accepts pets, so if you’re prepared to accept them, ensure your marketing material says “PET FRIENDLY” It could have a significantly positive impact on your enquiries.
Willing to house DSS tenants? Go to your local council
If you don’t know what a DSS tenant is, go here DSS Tenants.
Your local council will have plenty of people on benefits that need housing. If you’re willing to house a DSS tenant, then contact your local council and let them know. They may be able to find you a tenant at NO COST. Each council operates differently regarding DSS Tenants, but it’s always worth finding out if they can point you in the direction of tenants that need housing.
It’s also worth mentioning in your adverts that you’re willing to house DSS Tenants. Fewer landlords are starting to accept DSS Tenants, so they’re finding it difficult to find accommodation. From my experience, the disclaimer, “DSS WELCOME” tends to drastically perk up interest, especially when advertising on Gumtree.
Provide tenants with incentives
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
Make sure your adverts are clear, informative and appealing
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 effective.
Your adverts, whether they’re online or on a shop window, will be the key to generating enquiries, so it’s crucial you make them just right.
Which one would you want to view? Pictures and relevant information sell. Be informative about as much as you can. Use your own judgement to provide details on features that you think will help sell your property e.g. local/public transport, local schools, parking, local amenities.
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.
Be flexible and accommodating with your time
Timing and availability can be tricky with viewings, but try to be as flexible as possible. You want as many people through the doors as possible, so if that means you have to postpone some social commitments to make it happen, then so be it.
Tenants rarely wait around, so if you leave them waiting too long, you’re effectively telling them to go away, and they’ll soon find an alternative. If it’s difficult to take viewings because of work or family commitments, try to arrange multiple viewings in one day.
It’s important not to keep your prospects waiting. Be available, be responsible, and don’t keep anyone waiting.
Update your Facebook/MySpace status
Most people these days are involved with a social media platform, whether it be Facebook or MySpace. 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 to rent. Spreading the word amongst your local peers via Facebook is always worthwhile.
Ask 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! Plus, it’s so quick and easy to do, it’s always worth giving it a shot.
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 money, and quite possibly sink your entire investment. And trust me, there’s no shortage of bad 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 hostory/rating
That’s usually what letting agents will cover. 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:
- Tenancy Application Form
- Early Signs Of Potentially Awful Tenants
- How Landlords Can Avoid Bad Tenants
- Landlord Guide On Referencing Tenants
I just to reclarify the importance of thorough tenant referencing, please don’t skip this vital step.
Ultimate Guide On Finding Tenants
For a complete and detailed guide on how to find tenants without a letting agent, you may want to purchase my Ebook – Death Of The Agent, The Ultimate Guide On Finding Tenants without An Agent.
I have a whole category dedicated to Marketing your vacant BTL and Finding Tenants. Check it out.
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