Just because your tenant is leaving, don’t stop being a great buy to let landlord
All good things come to an end for a buy-to-let landlord, and that includes the best tenancies. At some time in the future, that fantastic tenant you worked so hard to keep forever is going to move on. It may be that they got a new job in another county or even country. Perhaps their family has grown, and they need a home with an extra bedroom. Or our tenant of eight years has enough saved to buy their own home.
How you act as a landlord will leave a lasting impression on your departing tenant. Your actions could determine how your tenant leaves. The state in which your investment property is left, and how quickly you’ll be able to get new tenants.
In this article, concluding my series on how to be a great buy-to-let landlord. I’ll look at how to say goodbye to great tenants and maintain your reputation as a landlord everyone wants to rent from.
You want the tenant to play ball
When strategising to maximise rental income profits, you’ll want to minimise void periods as well as benefit from tenants who are willing to pay the highest rent. How you act as a buy-to-let landlord is one of the major keys to achieving both aims.
In the previous articles in this series, you have discovered strategies to:
- Avoid tenants from hell
- Welcome your tenants to your investment property in the right way
- Retain your best tenant for the longest time
All of the strategies discussed will encourage your tenant to play ball.
When your tenant has decided that they want to leave the property to move on, you’ll want them to give you as much notice as possible and leave the property as they found it. If they do this, you’ll have more time to find a new tenant and a cheaper bill to prepare your investment property for that new tenant. Void periods will be minimised, and that will help to keep strong cash flow.
So, let’s say that your tenant has broken the bad news. What do you do next?
Ask why, and congratulate them on their move
Always ask why the tenant is thinking about moving. It may be that they need extra space, and you have an investment property coming free that will suit them perfectly. Perhaps they can’t afford your latest rent increase – is there something you can offer to ease the burden?
It is the point of finding out why your tenant is giving notice to quit – if they’ve been an exceptional tenant, you may be able to retain them in the property or offer them another, more suitable home from your investment property portfolio.
If their reason to move is a happy one – a new job or new baby, for example – congratulate them on their good fortune, and then proceed to the next step.
Arrange a pre-leaving property inspection
Ask to come and inspect the property a few weeks before they leave. It will give you an early warning about any maintenance and damage issues, allowing you to prepare for new tenants ahead of time. It will also be easier to address any damage issues before the tenant moves out.
Confirm the leaving date, and arrange the leaving inspection and handover of keys. Once you know the leaving date, you can begin to prepare for new tenants.
What if the property is in a poor state?
The chances of a good tenant coming to the end of the tenancy and leaving the property in a poor state are slim, but it does happen. At the time of the pre-leaving property inspection, if there is work, cleaning, or tidying to be done, have a conversation and agree with the tenant how any such work will be completed, when, and how it will be paid for.
Ask the tenant for permission to show the property
With a leaving date set, and the pre-leaving inspection confirming that you’re happy to show the property to prospective tenants, ask the owner if they would be happy to allow you to do so. If you’ve had a good landlord/tenant relationship, there’s no reason why the tenant shouldn’t agree to this.
Now you can start to market your buy-to-let investment, vet new tenants, and work on reducing that void period to a minimum.
Arrange utility accounts to be closed
Utility bills and council tax payments will be in the tenant’s name. You should confirm that the tenant will arrange to have these accounts closed, and ensure that payment of final bills will be made by the tenant.
Make sure you get the tenant’s new address and contact details
There may be a post that needs to be forwarded. And any unpaid bills, bank statements, and so on will need to be passed on. The tenant doesn’t have to provide you with this information, but if they don’t then alarm bells should ring, and you should be extra vigilant throughout the tenancy-closing process.
Offer to provide a reference for the tenant’s next landlord
Let the tenant know that you’ve valued them as a tenant, and you will be happy to supply a reference for their next landlord. Ask the tenant if they would provide a reference likewise for you to give to prospective tenants – this could help you get a tenant quicker, as well as achieve the best possible rental income.
Discuss the tenant’s deposit
Don’t leave discussion of the return of the deposit until the last moment. Discuss how and when the tenant’s deposit will be returned. What conditions might cause some or all of the deposit to be withheld. Confirm these discussions in writing, so that the tenant understands their obligations and what may prevent you from returning the deposit in full. The conditions that might cause you to withhold some of the deposit include:
- Outstanding bills
- Outstanding rent
- Damage beyond normal wear and tear
Take return of the keys and conduct a final inspection
It’s always best to make sure that the tenant is present for the final inspection. Ensure that you compare the inventory report and any updates to the present state, discussing any discrepancies with the tenant. Get the tenant to sign off on the inventory check. It reduces the possibility of disputes.
Send a copy of the final inspection report to the tenant. Confirm if any of the tenant’s deposit will be withheld to pay for any damage or outstanding rent or bills that are due.
Losing a great tenant isn’t the end of the world
When a fantastic tenant moves on, you might find it difficult at first. The tenant has been paying on time, every month, for years. Suddenly there’s a lot of uncertainty. Some landlords have told me that the first time a fantastic, long-term tenant gave notice it felt like losing a good friend or even getting a divorce!
However, it doesn’t have to be the end of the world. We work with our buy-to-let landlords and their tenants to make transitions as smooth as possible. As soon as the intention to leave is confirmed in writing. We can start the process of finding new tenants. Almost half of the properties on our books are tenanted within a week.
When a tenant moves on, it also gives the landlord a window of opportunity to undertake all maintenance and repair work that may be necessary, upgrade white goods, fixtures and fittings, and undertake a rent review. You may find that you’ll be able to ask for a higher rent. Though you should have been raising the rent in line with market conditions and inflation and as the tenancy agreement allowed, you may have compromised on those rent increases, too.
Don’t look on losing a great tenant as the end of the world; look at it as a new beginning that brings more opportunities.
Contact one of the Ezytrac team or me today on +44 1522 503 717. And discover how our Set and Forget philosophy could transform your buy-to-let property investment.
Yours in effortless property management,
Brett Alegre-Wood MARLA MNAEA