As the year draws to end…. just reflecting on 2017
It’s been a very difficult year for all BTL landlords. Overall the market has been soft, rental prices have come down and void periods or change over between tenants has gone up to 6 weeks on average.
Just wanted to break down some numbers for you all for what we have noticed at Albert Grace:
Landlords who renewed tenancy this year with the existing tenants, avoided a void period and all the expenses which go with it in refreshing the property. For renewing tenancies 80% of our landlords kept the rent same as last year and 20% saw a modest 1.8% average rent increase.
At AG we have worked hard during the changeover process and in about 60% of the change overs we had only a less than a weeks’ worth of void period and some occasion’s simultaneous move in and move out without a loss of day for some of our landlords.
Sometimes when things are going like clockwork people forget the mammoth effort which goes unseen behind the scene. This year we had two new staff join the Albert Grace team: Sophie joined us in February and Sian in September. Most of you have dealt with them and I have got pleasant feedback about them. Mansi in our accounts also has been helping landlords for years in efficiently maintaining rental statements. Myself I have always been there for multi-tasking all aspects of the service. For me AG is more than a business. It’s pretty much my majority of working life.
But if ever you think our service has faltered or if we could have done things differently, we want to hear from you and want to listen to your constructive input, so we can raise our game and meet your expectations.
Now expectations are very subjective, so we when we recommend certain things like upkeep, or upgrade to a property, we are not just saying for the sake of it.
All our staff are very alert and aware the costs involved. We only recommend things when it’s really necessary and also we bring on board over 15 years of being in the industry, working with single property landlords and also with large property portfolio. We bring to the team a collective experience of over 4000 tenancies renewal and hands on experience to get the best value for money for our landlords.
Some of the landlords are very proactive maintenance and also implement periodic upgrade to the property. Not all people are the same when it comes to their relationship with finances and become unnecessary budget constrained. It’s a self-defeating proposition. A good property always attracts a good tenant.
No one likes spending money. Let’s put an ownership of property into some context.
For most people buying their own property is the biggest transaction and undertaking of their life. Second biggest ownership is a car. Comparing the two, car is a depreciating commodity and property in UK has for hundreds of years has been an appreciating asset.
For a car there is regular maintenance requirement, fuel costs, new tires, oil change, mot, road tax, insurance, car wash cleaning etc. Similarly a property needs regular maintenance but some investors look at it in a very strange way.
If one would analyse over a five year period an average car owner will spend average 23% on a depreciating commodity. Similarly a BTL property depending on where the property is average maintenance cost comes somewhere in between 0.33% to 2.6% in maintenance and upkeep. Plus the maintenance costs are tax deductible.
The main difference is a generally a car is not an income generating assets for most landlords – unless you are an Uber driver 🙂
Now when a person becomes a BTL landlord, they become a part of the just top 2% of the UK population. So respect yourself, treat yourself as a professional.
So here is to a Merry Christmas season and wishing you all a Happy New Year – Team Albert Grace