The time is coming up for a tenant to decide whether they want to renew their tenancy in a Landlord’s property. Most people would think it’s in the tenant's best interests to want to stay in the property, sign a new Tenancy Agreement and avoid all the effort, cost and stress involved with moving. However, it is also actually in a Landlord’s best interest for the tenants to stay as well (obviously pending that they have been good tenants so far) for the following reasons:
Avoid Having to Find New Tenants
If the tenant wants to renew their tenancy it avoids the Landlord having to 'resell' the property and find new tenants. This means the Landlord also gets to avoid all the costs involved with the advertising process.
These costs can vary depending on which method the Landlord chooses. There are cheaper options such as advertising for free online, or through an online company such as Ezylet for a small fee dependent on the level of service you require. However, it has been reported, the most successful and therefore most expensive method is to enlist the services of an Estate Agent.
Nevertheless, no matter how much is spent on advertising there is never a guarantee that a tenant will be found quickly enough to cover a Landlord's costs, which leads onto the next point...
Avoid Vacancy Costs
As discussed in the costs of ‘reselling’ the property and finding new tenants, if tenants choose not to renew their Landlord will need to consider the vacancy costs of an empty property. Whereas if a tenant chooses to renew their tenancy, this will mean there are no days the property is unoccupied, eliminating these costs altogether.
Vacancy costs are when a Landlord does not have any cash flow from rental payments but also has other outstanding costs that result in them losing money every month that the property is vacant. Examples of these costs are necessary maintenance that will cause the property to be empty for longer and if a Landlord isn’t exempt from council tax payments for an empty property.
Better the Devil you Know
The age-old phrase ‘Better the devil you know', which can be applied especially well in terms of tenants. As they have already been their tenant for the length of a tenancy, a Landlord will know all their flaws. These could include; whether they pay their rent late, how they look after the property and how they have cooperated and communicated over the year. Knowledge is power and will allow the Landlord to make an informed decision of who is living in their property.
However, this doesn’t just refer to how a tenant has behaved over the year, but also the Guarantor they have put in place. If they had previously used a company such as RentGuarantor the Landlord will now be aware of the process and will allow the tenant to use them again rather than the usually individual friend or family member.
To conclude, after explaining the reasons listed above it is evident that a Landlord would want their tenant to renew their tenancy. This is obviously depending on whether they have been good tenants for the tenancy that is coming to an end. However, if there has been little to new issues it is an approach a Landlord should be more eager to take. Tenants renewing avoids any extra costs of reselling and fixing up the property ready for new tenants and ensures that the Landlord is more familiar with who is living in their property. In summary, a win-win situation for everyone involved.