According to a recent survey of two thousand tenants carried out by the lettings arm of Your Move, the most important factor in making the decision to rent a property – or not – is its condition.
And if you’ve just read that paragraph and thought, ‘You don’t say?’, then welcome to the club.
The report claims the state of the property trumps value for money, location and the relationship with the landlord when it comes to the factors that drive the rental decision.
Which makes it even more bewildering that most estate agents continue to ignore – apparently wilfully – the long-term value of the property when it comes to managing a tenancy on behalf of a landlord.
As I write that sentence, I can almost hear the howls of anguished outrage from agents who would insist I’m being grossly unfair. They will talk of inspections and tenant relationships. They will tell you, with an indignation etched into their earnest little faces, that the landlord is the client and the landlord is therefore their priority.
And the funny thing is, I do think they genuinely believe they offer an excellent property management service.
The truth, though, is they don’t. Yes, the landlord is their client but the landlord is only their priority as long as there’s a tenant occupying the property because they only make money when there’s a tenant in residence. So really, the most important relationship for the agent is the tenant relationship.
Keep them happy and there’s a better than evens chance they’ll renew the lease and preserve the related income stream.
If the landlord and the property were really that important to estate agents they wouldn’t need to carry out a survey to discover the seemingly obvious fact that the condition of the property they live in was the single most important thing for a tenant in deciding where to live.
If the landlord and the property were really that important to estate agents, we wouldn’t have so many landlords being left to spend significant sums of money making repairs to their property in order to re-let it when a tenant leaves.
If the landlord and the property were really that important to estate agents, we would see them establishing a clear maintenance and repair plan that would ensure first that the property achieved its optimum rental value over the term of the lease and second that it maintained its optimum capital value.
Most landlords are concerned with the short game. Some are accidental landlords who find themselves with a property that, for whatever reason, they have no need to live in for a period. Others are career landlords who have deliberately entered the buy-to-let sector.
In both cases, occupancy is key because occupancy addresses the short-term need for the property either to wash its face financially or to generate profit and, as a result, income. Financially, then, many landlords are driven by the need to get money out of the bricks and mortar they own.
Which makes it all the more important that their agent is not only managing the tenant and tenancy but also keeping an eye on the long game by safeguarding the value of the capital asset.
Unfortunately, that’s where the wheels start to come off. Because most estate agents are also driven by the short-term need to drive income – and they can only do that by making sure the property is occupied.
So if it comes down to a choice between getting a tenant in now at a lower rent than the property is capable of achieving or waiting and ensuring the property is in the best possible condition for both the rental market of today and the sales market of tomorrow, most estate agents will take occupancy every time.
Which means that the tenants may well consider property condition to be their priority, but it’s a criterion that isn’t necessarily shared by the person showing them round the property in question.Back