Rent to rent and Coronavirus – How can I tenant a property in lockdown?

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Today’s episode is all about how to tenant a property in a coronavirus lockdown.

If you listened to episode 11 about why now there is more opportunity,

But you thought to yourself,

‘well of course it’s easier to get property because there are no tenants’,

then this episode is for you!

As I’m recording this at the end of June 2020 we’ve seen the lifting of the lockdown for the property market in England & Wales.

And restaurants, cafes etc are expected to reopen next month with different dates for England, Wales and Scotland. 

What we’re finding is that demand is high at the moment.

When lockdown started on 23 March we had a few people scheduled to move in who moved in.

Some who had planned to move in to take new jobs but found their jobs were no longer available and didn’t move in. 

Then nothing…. Well almost nothing.

We continued to get enquiries but only a fraction of those we would normally expect to receive.  

Interest levels have increased significantly since the easing of the lockdown measures in England.  

With Wales a little further behind the lockdown easing measures, demand is still not quite back to pre-covid levels but significantly improved and almost there.

Let’s say that you’re negotiating a property in lockdown.

And you’re just not sure whether you can fill it.

Here’s what I suggest

Offer a lockdown rent.

Before I explain what I mean by that, I just want to explain the context.

So normally you’d offer a guaranteed rent.

However, the government at the moment is restricting the ability of people to move so you’re unable to operate your business as normal.

And in that context some landlords and agents would be open to an arrangement where you pay a different amount of rent during lockdown and revert to full rent after lockdown. 

Using this strategy you can take on a property now.

Manage it through lockdown and then have it cashflow fully for the rest of the term.

As a side note, our solicitor has added a new clause to our contracts.

Let’s call it a corona clause so if anything like this happens again in the future and our ability to operate is impacted we can renegotiate the rent accordingly. 

Once you have a property.

You’ve agreed a rent.

You’ve made a special arrangement to cover lockdown period.

How do you fill rooms?

If key workers are an option

If your properties are empty, in addition to the normal advertising portal routes, you can try some of these 

• NHS 

• Supermarkets and fulfilment centres like Amazon

• Local Authorities for emergency housing

• Charities that support vulnerable or at risk groups who may need housing, for example refuges

• Recruitment agencies for key worker roles

If key workers are not an option

Some of your properties may be partially tenanted, with the tenants uncomfortable to have new tenants moving in, especially if they are high risk key workers.

Or your property might be in the wrong location for key workers.

Here, work on your fundamentals to ensure your rooms fill.

You can always sell at product at a price.

You just need to ensure your product fits the price.

That’s what I call POETRY - 6 things to fill your rooms faster

• P is for photos – check they’re not letting you down

• O is for online portals - especially spareroom, you need to be showing up amazing 

• E is for existing tenants – incentivise them

• T is for tell everyone online and offline

• R is for rooms beautiful presented

• Y is for your viewings

I’ll talk more about this in a future episode.

This is a great time to ensure all this is good and you’re on your game.

What we found is that after a few very quiet weeks we filled a lot of empty rooms quickly when demand returned because other agents were not responding.

So again, you can do well just by showing up.

So to summarise

If you’re taking on a property during lockdown

Ensure your contract includes a corona clause!

Negotiate a special lockdown rent or arrangement.

Fill your rooms faster using the POETRY method.

Where you have empty properties there are lots of ways to find tenants for example key workers and working with council.

And if these were properties you had before lockdown.

Ensure that you have all the POETRY elements in place.

Look after your tenants.

Claim the support you can.

Financial support for you 

• For tenants and R2Rers depending on how they earned income:

• Government initiatives include

  • Coronavirus Job Retention Scheme (aka furlough)

  • Paying Statutory Sick Pay (SSP)

  • Business Rates reliefs

  • Supporting the self-employed initiatives

  • Government-backed loans to businesses (including Bounce Back Loans)

  • Direct business grants

  • VAT deferral

  • Tax - Improved Time To Pay arrangements

• Regional and council specific initiatives

  • These could include additional grants, funding, hardship loans and council tax arrangements

• Universal credit – also available for part time students

And remember each property is for 3 or 5 years,

and if structured well using our Deal Analyser you have some fat, some allowances baked in to your deal to protect your margin.  

You can get through a few lean months.

I know that this might seem theoretical though.

OK so you filled your rooms,

Next week I’m going to talk about what to do if your tenants can’t pay.

Rent to Rent Real Talk

If you want to see how real people are dealing with corona in their rent to rent businesses join us for Rent to Rent Real Talk every Wednesday at 8pm in our

Rent 2 Rent Success Secrets facebook group.

Have you found this useful?

We’d be super appreciative if you could leave a review on apple podcasts. 

CLICK HERE to leave a Review on Apple Podcasts

And remember,

Believe Bigger, Be Bolder and Be a Gamechanger!

See you next week.

Stephanie & Nicky

xx

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