Beware of Unexpected Empty Property Costs
Do any of your properties have pre-payment meters? If so, you may also be aware of how they work, but of late, utility suppliers are clamping down on how they deal with these. Sadly, like a lot things, these are not in the landlords favour. A Pre-payment meter works on a “pay as you go” basis so that tenants can put money on the key and the card, and they are in control of how much they are using. Once the property is empty and a tenant leaves, there is a daily standing charge which is for things such as maintenance, the cost of keeping you connected to the network and various operating costs.
No matter how long your property is empty, this charge applies and on average, we’ve found that this is around 20-22p per day, per meter. If you only have a short void, say 30 days, this works out at about £13. However, some of you may have long term empty properties which means there could be debts of over £100. Until recently, utility suppliers often allowed for this debt to be wiped using a re-set code which takes the balance to £0 but this is no longer allowed.
Please take this as a word of warning that if you have a property which has pre-payment meters and it’s standing empty, this is an extra charge you need to think about on top of your mortgage payments and monthly council tax bills. Unfortunately there is no getting away from your liability of paying these charges, but there are ways of reducing the void if your property is in an area which may be prone to standing empty for longer. Changes that you should be thinking about if you’re eager to reduce your void are:
- Reduce the criteria i.e. take away the need of a bond or a guarantor if the tenant has rental history
- Reduce the rent
- Add an incentive i.e. half price bond or half price first month’s rent
- Decorating allowances.
If you have any questions regarding this issue, a member of the new lettings team will be able to help.