Q My house has been on the rental market for over three months and I’ve just had an offer of 40 per cent less than the offer price, what should I do?
A There are various reasons for making a residential investment but most centre on either looking for a good yield, or long term capital growth.
In most cases the former will mean buying a flat and the latter a house. This is partly because houses cost more to maintain as they tend to appeal to families and they have their own roof and at least two external walls and windows. This means they’re much more affected by changes in seasons, but historically they tend to show better price growth. With this in mind a void is not just damaging from a financial point of view.
People forget that if you look on an annual basis, every month not let will mean an eight per cent reduction in your net yield.
The rental market is much better supplied than it was, so rents are flattening and it would be better to see the house rented than empty, given the competition. So, provided you don’t sign up to more than a year’s let initially, you’d do well to think about accepting the offer.
It’s important you understand that rental agents do not have to be part of any redress scheme but they do handle your money, so please make sure the agent you use is a member of ARLA (www.arla.co.uk), as your money will be protected and you’ll have recourse to a complaints procedure (www.tpos.co.uk) should there be any problems. They’ll also check out your tenants properly.