Protecting Rental Income During COVID-19
TNo matter what kind of business you’re in, the coronavirus pandemic has brought with it trials and tribulations that we’ve never had to deal with in our lifetimes so far. In the housing market, it’s vital that you’re able to protect your rental income as much as possible and take action now so that you’re not losing revenue streams. Today we’re going to explain some of the main things you need to explore and how to stay afloat as much as possible during this difficult time.
Are Your Tenants Able To Pay Rent?
At the time of writing this we are initially past the full-scale lockdown that we saw a few months ago that may have caused many people to have reduced hours and not be able to go into work. At this time, we’re also likely to see a big increase in unemployment rates, so checking in to see if your tenants are able to pay their rent is going to be helpful in understanding if there is a problem brewing that you may not know about. The situation obviously doesn’t mean that your tenants should stop paying their rent, but as a landlord you just may need to be more flexible with tenants who may be struggling. The first thing to do would be to speak to your lettings team who manage your property, or to your tenants yourself if you manage your own properties, and see how they’re doing. If your tenants are seeing a reduced income because they can’t work as many hours, they’re self-employed, they’re having to claim universal credit, or their income is affected because they need to self-isolate, these are all factors that you should know about. If you let out to students, they may have to end their tenancy early, especially if there is no need for them to attend lectures on campus.
Purchasing New Properties & Refinancing
When coronavirus cases started to explode in the UK back in March, it was possible to slightly delay or put off the signing of new contracts with home purchases because of the potential difficulty in getting contractors in to do the renovation works. We are hopefully again past this situation now and you should have no difficulty in getting contractors in to do the work, although it may be taking longer than it ordinarily would take due to social distancing measures put in place and the setbacks in production that may have happened earlier this year, so you may have difficulty in getting materials or parts. If a full-scale lockdown occurs again in the future, before you put off signing any new contracts, do check in with your team that are going to be doing the renovation works to see if they’re able to safely continue or if they will cease work as well. If you’re struggling financially as a result of the pandemic, refinancing may be an option for you to raise extra funds.
Filling Empty Properties
If you do have empty properties at the moment, do look into any possible way to fill them. It sounds obvious as you’ve likely tried, but there are other places you can look to find tenants. Does your local hospital, police or fire department need accommodation for their key workers? If key workers are living with someone who is in vulnerable health they may need somewhere they can stay away from their family while they’re working. Check if your local hospital has an accommodation department or if any essential workers in your nearby area are in need of housing. It’s possible to sign short-term contracts, so this may well be an option for you to temporarily fill those spaces until the pandemic eases or a vaccine becomes available. This may particularly apply to you if you have student housing that’s currently sitting empty.
What Else Can You Be Doing?
Lastly, is there anything that you are trained in that you can do outside of your property portfolio. Before you went into the property market, there may have been a job that you used to do that can mean you have skills to offer. There are so many websites out there dedicated to people looking for freelance workers, so if you have skills to offer then you may be able to bring in an additional revenue stream. Is it an option for you to start creating your own lettings agent so that you can manage your properties on your own? Would your team that you use for works on your houses be open to being contracted out and earning a little money on the side? Taking a financial detox during this time and establishing what is a necessary expense and what isn’t, may make a big difference in how wisely you save during this time. Look at your existing expenses and see if there’s any better deals on the market as well. We’re all currently going through a period of slowed down living, that’s to say that we’re no longer going out all the time or rushing between meetings. Use the time now you have it to make connections with new people or new investors, through either social media or avenues like LinkedIn to forge new relationships so that when this time passes you will have a wider network of contacts.
We hope you found today’s topic of protecting your rental income during the coronavirus pandemic helpful! If you have any questions, please do get in touch as we’d love to hear from you. You can reach out through our social channels, through email at email@example.com or by filling in any of the contact forms on our website. If you’re looking for advice on your next property deal, are looking for bridging finance on your next project or if you’re an investor looking for better returns on your money, please do get in touch to see how we can help.