July 13, 2022
Have your tenants been affected by the cost of living crisis?
As one of the consequences of the recent pandemic, our communities have really been feeling the pinch, from rising energy/fuel prices, to the price of our weekly shop.
As a landlord and property professional myself, I’m aware this crisis has been knocking on the door for quite some time, and has become very difficult to ignore.
Inflation has meant rising costs across the board, with some landlords reluctant to increase rent and add to their tenants’ costs. However, it’s sadly inevitable when most, if not all landlords are also affected by the cost of living crisis.
Whatever changes you have to make, you may be wondering if there’s anything you can do to help your tenants. They are, after all, part of your assets.
So, what can you do as a landlord to ease the cost of living crisis for your tenants? There are a number of ways in which you, as a landlord can make a difference.
1. Ensure your property is energy efficient
One of the biggies when it comes to the rising cost of living is the rapidly rising utility bill.
While it affects us all, for a tenant it can bring significant pressure on top of the rental costs. So, how can you help?
One of the biggest reductions on utility bills can be gained if the property has good energy efficiency. With new EPC legislation coming in soon, everyone will have to pay attention, so as a landlord, it makes sense to be proactive now.
Check where you can fix things to cut the utility costs to the tenant – we’ve recently written a blog to highlight some of the changes you can make right now, such as installing solar panels, upgrading your boiler, or introducing a ground source heat pump.
Initial costs aside, it’s a win-win, really, for both of you.
2. Maintain good communication with your tenants
There is a fine line between overwhelming your tenants with too much communication and keeping it transparent and open.
If your tenants are struggling with employment issues, or other things in their lives, it’s useful to be prepared with helpful information should the need arise.
There can be property-related information and regulations that you can share with your tenants to keep them informed in case anything needs to be done. To that end, keep an eye on potential government grants and updates.
When you have a good tenant in your property who is careful, considerate and pays their rent on time, it makes sense to let them know how much you value them. So, stay aware of how you can help if the need arises.
3. Explore potential property changes to cut costs
Following up on my previous points, staying aware of your tenant’s situation may help you understand and explore other ways they can cut costs by making other structural changes to your property.
For example, is there anything you can do to assist your tenants in purchasing an electric vehicle to reduce petrol costs – such as offering to install a charging point on the property? Check out this government grant that could help.
This may be something tenants are unsure of asking you about.
Alternatively, your tenants may want to buy a bike for travelling to work, but they may have nowhere safe to store it. Installing a bike shed or parking rack (if possible) on the property would help.
4. Consider a flexible contingency payment plan
While we all like to be optimistic, it makes sense to be ready for contingency situations.
If you have a good and open relationship with your tenants, you’ll know when they are genuinely struggling with money. It can happen to absolutely anyone, and there’s no shame in your tenants asking for help.
As a landlord, you should factor this in with every property, keeping a good six months’ worth of rent in the bank just in case something – such as a ‘rent holiday’ is needed.
Payment plans can be mutually agreed upon based on your tenant’s actual financial situation. Again, transparency from both sides is key.
Lots of landlords have done this out of goodwill during the lockdowns and pandemic months. With more and more tenants affected by the cost of living, it’s sensible to apply it here, too.
Advice from the property pros
Being a proactive landlord who cares about your tenants can really take your business a long way, whether you have a single rental property or a property portfolio.
Out-of-the-box thinking, such as considering whether you can help your tenant work from home isn’t something you’d traditionally be expected to do, but in these tough times, it may very well be welcome – or even necessary.
For example, if supplying additional furniture such as a desk or office chair would make all the difference to a tenant who is struggling to do their work from home it may well be worth the extra expense.
In summary…
I know it can be worrying if you have tenants affected by the cost of living crisis. It’s really all about thinking out of the box as a landlord. These times are difficult, and the cost of living crisis (as I’m sure you’re aware by now) is real.
Be open to whatever you can do in terms of energy efficiency, infrastructure changes, and flexible payment plans in emergency situations. Communication and keeping both parties informed is the real key here, so check in on your tenants once in a while.
Looking for advice on buying or selling tenanted property? Don’t hesitate to get in touch – we’re always here to help, or at least point you in the right direction.
Written by Chris Wood, MD & Founder of Portolio
Get in touch on 07812 164 842 or email [email protected]
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