Should a Landlord Risk a Void Period by Holding Out for a Higher Rent?

Should a Landlord Risk a Void Period by Holding Out for a Higher Rent?

One of the most challenging things about being a landlord is determining how much rent to charge your tenants. Set it too low, and you risk attracting poor quality tenants and missing out on potential profits. Set it too high on the other hand, and you could end up facing a void period as you struggle to attract any tenants.

The question is, could it actually be worth risking a void period by holding out for a higher rent? Here, you’ll discover everything you should consider before deciding whether or not it’s worth the risk to you.

What would a void period cost you?

The most obvious way to determine whether or not you should hold out for a higher rent is to determine how much a void period would cost you. If the property was to remain unoccupied for months on end, would you comfortably be able to afford the mortgage repayments? If not, holding out for a higher rent could be a very bad, very risky move.

You also need to take into account whether the void period would fall near a holiday period. For example, if you experience a void period right before Christmas, it’s going to take you even longer to find tenants, as many people won’t be looking to move for a while after the festivities.

Figure out exactly how much you’ll lose, and this will give you a good idea of whether to hold off or not.

Do you already have tenants?

Another factor to consider is whether you actually have tenants in the property at the moment. If you do, and they do not agree to pay a rental increase, you may be considering ending the tenancy agreement and holding out for a tenant who can pay more.

Unfortunately, if you do this, you could end up losing a perfectly good tenant. You may attract a new tenant sooner than you expected, but they may not be as reliable as the tenant you have now. So, consider whether the tenant you do have is reliable and whether it’s worth the risk to get rid of them for a slightly higher rental price.

Consider the length of the tenancy

If you’re hoping to secure a longer-term tenancy, a higher rent could prove problematic. Most tenants are much more likely to commit to a long-term tenancy if the rent is affordable.

Even if you’re looking at providing short-term lets, you could struggle to attract a tenant for months if you hold off, hoping for a higher rent. These aspects definitely need to be considered.

Overall, the majority of the time, it isn’t advisable to hold off for a higher rent, unless you know it’s a reasonable price compared to other properties in the area. However, you can always seek advice from Cassini Properties Estate and Letting Agents to determine whether it could be the right option for you. Having vast knowledge of properties throughout Leeds and can advise you how much rent you should be charging.