Updated May 2016
If you are the owner of buy to let property, marketing the accommodation is likely to be high on your list of priorities. Successful marketing, after all, is probably the best route to selecting and retaining the tenants that provide the rental income on which your business depends.
What does it take to successfully market your rental property therefore?
In attempting to answer the question, this guide will look at:
- the importance of knowing your target market;
- what it is that tenants are most likely to be looking for in any property they rent;
- the relative merits of devising and running your own marketing campaign compared with the alternative of instructing a letting agent; and
- what is likely to be involved in running your marketing campaign, given methods that rely both on and offline.
By giving careful thought to each of these aspects, you may be in a better position not only to formulate an appropriate marketing campaign for the particular type of rental accommodation you own, but also to continue to run and manage your marketing in a way that maximises the success of your business.
Although every attempt is made to make this as complete a guide to marketing your rental property as possible, every let is individual and every landlord is likely to encounter his or her own particular circumstances and challenges. You may therefore find yourself turning to other resources, too, in order to secure the best possible guidance.
Know your market
When you are running a business, whatever product or service you are offering it is important to know the specific market to which you are pitching those goods or services. Running a buy to let business is no different and it is important, therefore, to know the market which you intend to target as prospective tenants.
Your target market is likely to be determined by a number of factors, such as:
- the location of your let property – not just the town or city in which it is located, but the particular area of that town or city;
- the availability of other rented accommodation in your area, its general standard, rent levels and types of tenant living in it;
- the general standard of accommodation you are offering, such as its appearance, state of decoration and quality of furnishings, fittings and appliances;
- the rental income you are hoping to earn from your tenants;
- the ongoing expenses you might incur in maintaining your property, the payment of any fees and taxes and annual costs such as landlord insurance – bearing in mind our expertise here at Cover4LetProperty in matching your need to safeguard the property with the insurance products available in the market;
- whether you are looking for long-term tenancies or a continuous series of relatively short-term tenancies (such as if yours is a student let) – although your ability to find tenants who are reliable in paying the rent is likely to be critical whatever your target market;
- the extent to which you want to be involved in the day to day management as the landlord of the let property – which may also depend on how close you live to the rental property or properties you are letting; and
- your assessment of the likely success of the business relationship you are able to strike up with the tenants occupying your property.
On the strength of considerations such as these, you may be able to decide whether your target market is likely to comprise:
- tenants who are employed in more or less professional areas of work;
- benefit claimants and asylum seekers; or
- a target market that is a combination of all these or not necessarily determined by such factors
When choosing your target market, you might want to keep in mind that some insurers may not agree to cover property that is regularly let to particular types of tenant – such as students or benefits claimants, for example.
What do tenants want?
Closely related to the issue of choosing and getting to know and understand your target market is the question of what your tenants are likely to be looking for in any accommodation they want to rent. Knowing what your tenants want, therefore, may be key not only to adapting your property to meet those needs but on an even more basic level may help to inform the particular market you may wish to target.
Different types of tenant – whether classified by employment, age or gender – may have different priorities when it comes to choosing the accommodation they rent. Nevertheless, there are a number of independent surveys helping you to gain a general, overall picture.
At Cover4LetProperty we regularly conduct just this type of survey (our most recent was in February this year).
Out study ranked the following factors as being high on the average tenant’s wish list:
- location – no prizes perhaps for guessing that location seems to be important to practically any type of tenant, with proximity to work, college or university being an important consideration for which many individuals (both the wealthy and the young) appear to be prepared to pay more in rent to secure. Tenants with families, of course, placed a similar premium on proximity to schools and childcare facilities and local shops;
- cost – obviously the rental cost is an important consideration for any prospective tenant;
- parking – over a third of our respondents (39%) cited ease of parking as influential on whether they rented a property;
- quality – any tenant is likely to want good value for money in the rent that is paid. Where rents are higher, this might translate into an expectation of well-designed accommodation of a high standard. Although price is likely to be more important to students, for example, and a correspondingly lower expectation on the quality of furnishings and fittings, value for money is still an important consideration.
What tenants want is clearly a key to understanding your market and a successful pitch to your target group or groups.
Although the type of surveys mentioned may help point you in the right direction, you might also want to do your own first-hand research simply by visiting let properties similar to your own in the same area.
This might prove invaluable in assessing the standard of accommodation most likely to attract given types of tenant and the level of rent that any group is prepared to pay.
You might want to avoid the temptation of attempting to maximise your business profits simply by setting your rents as high as possible. If you fail to attract and retain tenants prepared to pay such a high price, you may discover that the going rate is there for a reason and that successful landlords in your area are those that charge a fair rent in order to achieve more or less continuous lettings.
For similar reasons, you might want to maintain a flexible attitude when it comes to tenants who want to end a fixed-term tenancy early. Although you are likely to be within your rights to insist that the agreed rent continues to be paid until the tenancy agreement expires, the housing charity Shelter points out that a reasonable and more helpful attitude on your part is likely to become known to future tenants with whom you might already be establishing a relationship of trust.
Nevertheless, that is not to say that your relationship with your tenants is anything but a strictly business relationship. However tempting it might be to feel that tenants might become friends they in fact remain paying customers of your business. Failure to keep this firmly in mind may spell disaster suggests a report in the Telegraph newspaper (February 2015)
Advertising your property
Advertising your rental property clearly plays a central role in its successful marketing.
Although you might already have decided on your target market and reached an understanding of what your prospective tenants are likely to want, you are likely to have two broad choices when it come to advertising your property and actually arranging to let it to tenants that have been found:
- arrange the advertising of the property and the selection of tenants yourself; or
- instructing a letting agent to take on these duties on your behalf.
The option you choose is likely to depend on the extent to which you want to retain a hands on approach to your role as a landlord – or indeed the time which you might have to exercise such a role – and the alternative of instructing professionals to do the job on your behalf.
Acting on your own account
If you choose the active course of action and want to play a fuller part in your role as a landlord, advertising your let property is similar to advertising any other product – you want to reach your target market with a description that is accurate and paints the property in as favourable a light as possible.
Remember that your role as a landlord continues to require that you describe the property honestly and accurately, avoiding any risk of your running foul of the law on misrepresentation.
There are traditional ways of physically placing your advert – such as taking out a classified ad in the local newspaper, paying for advertising space in a magazine aimed generally at your target market, or even placing a card in the window of your local newsagent.
Increasingly, of course, landlords also take advantage of the power and scope of the internet in reaching the widest possible audience. There are a number of such portals through which you may gain access to your potential market.
If you are taking on the advertising yourself, you may also need to deal with every aspect of securing suitable tenants – everything from showing them around, taking deposits, taking up references, drafting and signing tenancy agreements, and conducting inventories at the beginning and end of each tenancy.
Advertising your property and dealing with every aspect of tenancies on your own account may prove so time consuming – or indeed too complicated to get right every time – that you choose to instruct someone else to do the whole job on your behalf.
The professionals involved in providing such services are known as letting agents. You might instruct them to take on as much or as little of the duties of the landlord as you choose – although you need to pay the corresponding scale of fees for those services.
If you instruct a letting agent, the whole process of advertising the property, showing prospective tenants around, taking deposits, drawing up tenancy agreements and conducting inventories is done for you. Indeed, if you choose a letting agent registered with The Property Ombudsman (TPO) you are also likely to have the going market rent recommended to you when the agent takes on responsibility for marketing your property.
You might take a certain reassurance from the fact that TPO registered letting agents are required not only to adhere to the responsibilities imposed on them as a matter of law but also to rigorously adhere to the code of best practice formulated by The Property Ombudsman.
Managing your advertising campaign
If you decided to retain responsibility for marketing your property and dealing with tenants, managing your advertising campaign is clearly an ongoing process.
Whether you have taken out conventional advertisements in print or gone for online exposure, you need to make sure that you continue to monitor responses to your advertising.
When talking about advertisements for lettings, the website French Connections, for example, points out that it is otherwise easy to miss expressions of interest from potential tenants and you stand to lose the opportunity that any positive response may inspire.
If you have outsourced many of your landlord’s duties to a letting agent, there may be a temptation simply to leave the agents to get on with the job without any input from you.
In fact, however, the successful relationship between landlord and letting agent is likely to be one based on a mutual partnership where the shared objective is the marketing of the property and the selection of reliable tenants who pay the rent on time. Your continued monitoring of and input into the various aspects of the work being done by your letting agent may help to ensure that you get genuine value for money from the fees you are paying.
The letting agent’s role may be limited to marketing your property and dealing with tenancy agreements. If you are prepared to pay still more in fees to such a property management company, however, you may also have every aspect of the ongoing maintenance and repair of the premises taken care of without your day to day input.
Whatever level of service you agree with a letting agent or property management company, it is important that you read carefully and understand every detail of the agreement and what it does and does not cover.
The successful marketing of your rental properties has every potential for determining the financial success or failure of your buy to let investment.
The first steps in developing your marketing strategy are likely to involve getting to know and to understand your target market:
- from what backgrounds are your tenants likely to be drawn?
- is the type of tenant limited in any way by conditions imposed by your insurer? And;
- what is the general background and mix of tenants occupying the private rented accommodation in your area?
As you develop your pitch to your chosen target market, it may help to ask yourself just what tenants are likely to be looking for in the property they rent. There are online sources – typically updated on a fairly regular basis – revealing the results of surveys into tenants’ aspirations and expectations. But you might want to refine and develop the picture you gain about tenants’ wish lists by conducting your own first-hand research in and around the area in which your particular property is located.
When it comes to advertising your property, you have the choice of doing the job yourself or appointing a letting agent to market the let accommodation on your behalf.
Although the placing of advertisements through traditional offline media or through the increasingly widely used online portals may be relatively straight forward, when it comes to dealing with every other aspect of tenants and tenancies, you may find the job becoming considerably more onerous.
In those circumstances, you might choose to outsource responsibility for marketing the property and for managing tenancies to a letting agent.