We have recently had some interesting deals on new tenancies. Many prospective tenants and some new landlords, are often surprised that we suggest a negotiation on the rental in order to secure a reasonable deal for both parties. A few years ago it was the norm for tenants to pay the asking rental and both agents and landlords were surprised with the few tenants who dared to ask for a reduction!
Nowadays, with the growth in TV programmes showing property negotiations as the norm, many prospective tenants reckon it’s a worthwhile exercise to make an offer and see what the landlord is prepared to accept. This is probably a good idea if they are able to move in quickly, or are prepared to take the property ‘as seen’ without any special requests for accommodating a pet, or the removal or supply of furnishings.
The only problem that then arises is when a landlord is not able to make a decision regarding the offer there and then, and comes back to us a day or two later to accept the offer or try to renegotiate. Unfortunately, many prospective tenants, while waiting for a response, will then fear the worst, assume they have ‘lost’ the property, and therefore continue to view similar properties. These properties may be less expensive or the landlord might be able to accommodate their special request straight away and do a ‘deal’ there and then.
But fortunately, many of our professional landlords have already been through the heartache of unsuccessful negotiations and usually reckon that “a bird in the hand is worth two in the bush”. In other words it is probably better to accept a reasonable offer from a good prospective tenant today, than to hold out for the higher asking rental which may take some time (sometimes several weeks) to materialize. Additionally, tenants who believe that they have secured a good rental ‘deal’ often end up staying for a longer tenancy than those who feel like they have paid more rental than they wanted to.
Therefore, looking at the figures in detail, if you were advertising your property to rent at say £600 per calendar month and were offered £550pcm from a tenant wanting to move in next week for 12 months, we would highly recommend that this offer should be accepted straight away. In effect your rental income for that year would then be £6,600 per annum. If you had to wait a further month for an offer of £575pcm, your income for the next 11 months would then be £6,325 less any additional council tax or utility costs that may be payable during the waiting or ‘void’ period.
Of course, the negotiations can go the other way and many landlords may turn down a low offer if they know that there are other good prospective viewings booked on the same property. Good prospects might include tenants who can move in quickly or those who are currently renting properties with us who have a good credit and employment history.
I hope that some of the above tips will be useful for both new or seasoned landlords who want to negotiate quickly and speed up the next letting. So good luck with deciding whether it’s a ‘deal’ or ‘no deal’!