Make no mistake, the life of a landlord is hard work, particularly if you want to claim the biggest financial rewards from it. Different types of property investment and rental agreements suit different landlords. In this post, we’ll outline why long-term rental agreements can prove a rewarding venture.
Even if you like the idea of a long-term tenant, it might not be the best plan for you. So, read on to discover whether long-term rental agreements are right for you.
Choose the Right Property for Long-Term Renters
Different rental markets have different needs. And, when it comes to long-term renters you need to work out what they are. The following list gives you a good idea, but it’s by no-means exhaustive:
- A garden, or some outdoor space.
- Parking, preferably off-street.
- Spacious rooms.
- Good communication with the landlord or delegated property management company.
- Excellent transport links.
- Safe location and easy-to-secure home.
- Close to good schools.
- The authority and information to change energy suppliers.
- Ability to install good broadband provision.
As you can see, most of these details are similar to the needs of home-buyers. That’s because long-term tenants really do want to live in a home they can call their own, even if they’re renting it. They don’t plan on moving and, Government data shows there are more and more families with children in the private rental sector. That means good schools and safer neighbourhoods do well in the long-term rental market.
The Benefits of Long-Term Rental Agreements
If you have a property that ticks all those boxes and are thinking long-term would work for you, we’ve got some details on the benefits of long-term tenancy agreements. And, just so you know, by long-term we mean 12-months or longer.
The benefits include:
- A guaranteed income for 12 months at a time, or longer, if you’re happy to put it in writing. This also means you won’t need to worry – or pay for – regular cleaning and maintenance between tenants.
- You can build a good relationship with your tenants over a number of years. This can lead to your tenants making some positive decorative and home improvement changes by agreeing to share the costs with you. That way you’re improving your property, but the entire expense and inconvenience doesn’t fall solely on your shoulders.
- Where you’re happy to have an ultra-long-term rental agreement of three-years or more, it could be worthwhile ditching the management company and working with your tenants directly. You’ll save money and your tenants might feel more comfortable coming straight to you with queries and problems.
The Potential Downsides of Long-Term Tenants
As with all things, it’s not all good news. And so it is with long-term tenant. Here are a few potential downsides of agreeing to have long-term tenants.
- The longer a tenant lives in a property, the more rights that can accrue. Sometimes this doesn’t work for you as a landlord, but you have to uphold those rules, regardless whether its financially viable for you, or not.
- Imposing rent increases might feel harder, particularly if you’ve got a good relationship with your tenants. However, if you re-mortgage and end up with a higher interest rate, it’s only reasonable to pass at least some of that increase on to the tenants.
- Sometimes circumstances change and where your long-term renters were reliable bill-payers they could hit money worries. Yes, you’ll probably get the money back eventually. But, if tenants change from good ones to bad ones quickly the financial peace-of-mind you had will be gone, in an instant.
Make the Right Choice for You
As with most things, no tenancy option is perfect. But, if you consider your property, strengths, weaknesses and preferences, the decision between long- and short-term tenancies should be pretty easy.
Let us manage your property and keep up with all the legalities. All while you’re guaranteed to receive your rent.
Get in touch with us today and we can discuss how we can help you.
Alessio Tondo & Fabio Tarantino
Two ordinary guys who turned their passion into a business.
Rent 2 Rent specialists, London
Focused on how to Increase Your Rental Income.