33.2% Rental Increases

This is very similar to example 1 however this company managed 195 properties and we increased there average rents by 33.2%, most of the tenants had been in situ for a long time and rents had not moved for years and the majority had outstanding maintenance issue with landlords not able to afford the works or the tenants not reporting the issues due to fear or rent being increased having to move out to a property of similar size for significantly more rent, this is not good for the landlord, the tenant, the investment or the managing agent.

Let me explain why...

A tenant living in substandard accommodation is dangerous to their physical and mental health.

A landlord with a substandard property will only reduce the income it can achieve, increased voids and potentially not being able to let it at all, secondly it will also affect the chance of refinancing it due to down valuations or a lender not being prepared to lend on it at all.

An investment property that has outstanding maintenance issues will inevitably get worse and cost more to fix in the long run, this not only eats into your refits but also reduces the capital value of your asset. Remember that buy to let is not only about the rental income versus outgoings but also about capital growth which will probably make you more money over the long term than the income it generates.

Finally a managing agent managing a substandard property is exceptionally hard work and they spend their time firefighting and being reactive instead of proactive, thus not have the time or resource to analyse market rents and overheads but instead take calls from unhappy tenants and landlords and chasing rents due to works not being carried out etc.

Hopefully the above gives you an insight into the benefits of having the correct market rents for all parties. We have now taken this portfolio to a level that tenants and landlords are much happier and tenants are living in better conditions and generating more income (the main purpose of an investment property). This hasn't come without any casualties and we have had to lose some landlords and tenants along the way but that only means we now have the correct landlords and tenants that believe what we believe and that is the ultimate goal for a successful buy to let investment.