Why short-term gain often leads to long term pain for landlords
A two-minute read.
A landlords’ advice article published recently said property investors need to think more like the Amazon founder Jeff Bezos.
The billionaire businessman is renowned for his long-term thinking. He thinks decades ahead, and let’s face it, he’s not doing too bad, is he?
The article said landlords should retain good tenants at a reasonable rate rather than aim to get the highest rents in the short term.
It’s wise advice and something we believe in.
When a landlord adopts a short-term view of their property investment, it can often lead to lasting headaches.
The advice you are given can often depend on your letting agent’s philosophy.
Some agents will say things like: ‘The rental market in Atleborough is on fire now. We can get you even higher rents and squeeze out every penny from tenants.’
That’s not the way we approach things. Why? Because if you hike up a person’s rent whenever possible, it may mean more money in the short run but can be more costly in the long run.
Our advice to clients and indeed anyone thinking of investing in rental property is this:
Getting higher monthly rents isn’t as crucial in the mid to long term as finding and looking after good quality tenants paying a fair rate.
Here are some of the plus points a good longer term tenant brings:
Fewer void periods.
Fewer unnecessary repair or maintenance call outs mean a reduction in the property’s running expenses.
Good tenants appreciate they are being treated fairly and respectfully, and they look after their home.
Never to be underestimated is that having a good tenant in your property reduces your stress levels.
Going for the highest monthly rent charge as a property rental strategy can often be a mistake.
At MILLBANKS, we take the time to find, vet and keep good quality tenants for our landlords. This is the best way forward in the long term.
So, take a leaf out of the wealthiest person in the World’s book (Bezos was ranked #1 by Forbes magazine last month) and think further ahead when it comes to achieving rental property success.
*Copyright 2021 Millbanks of Attleborough, Norfolk.