Did you know that 250,000 properties in England have been vacant for months? Despite the homelessness crisis and the social housing challenges, a lot of properties are left unused and neglected. According to the analysis of Observer, this reflects an increase of 24% in 6 years.
What does this mean for landlords and multi-property owners? If you have a vacant property, that can negatively affect your portfolio. First of all, you’re missing out on the rental income potential of the property. Second, your property is in danger of suffering from structural damages and neglect caused by prolonged vacancy periods.
Instead of leaving your property vacant, why not grab this opportunity to earn from it through letting strategies?
In this article, you’ll learn how to turn void units into profitable assets. You’ll get a step-by-step guide to help you transform your empty properties into a steady source of income.
What Causes Void Units
There are many reasons why properties are left vacant. Some are waiting for the right offer to be sold. Others have damages and the property owner has yet to get the funds for the repairs. In some cases, properties fail to meet the safety requirements that would allow them to be rented out to residents or guests. It could even be a simple marketing issue that’s keeping potential guests from seeing your property.
Regardless of the reason for a property’s vacant state, one thing is for sure - this can compromise the growth of your portfolio and your investment returns. The longer a property stays vacant, the more it loses its profit potential. It falls into disrepair because of neglect. The moment you decide to use the property, you’ll have to spend more to make it a suitable dwelling place.
So if you have a vacant property, find out what’s causing it so it can be dealt with. If it needs repairs, do your research to find funding options. Thoroughly assess the property so you can identify the priority repairs. Set aside those that can be done later on. Make the void unit livable first then start to make improvements once funding is available.
If it’s because you’re trying to sell it but you’re only getting lowball offers, do some market research. It might be a buyer’s market. That means it’s not the right time to sell your property. Instead of leaving it vacant until you get the right offer, why not set it up for short-term letting? This will keep the property occupied and maintained. You can even benefit from the income that it generates.
The important thing is to make sure the property is occupied or used so it doesn’t drain your portfolio’s growth potential.
4 Ideas to Turn Vacant Spaces into Profitable Assets
There are many ways to turn a vacant space into a profitable asset. Sometimes, you don’t even have to rent the whole place. You can turn one room into a storage space. Or you can make the outdoor garden an event venue. A space in the garage can be cleared out to store vintage cars.
There are many possibilities to earn from void spaces. But it gets better if you can make the whole property available for letting.
Here are some options that you can consider.
Short-term letting
Think of this like Airbnb. Guests like tourists and business travellers can rent your property for a short period. Anything that’s shorter than 3 months falls under short-term lets.
You can rent just a room in the unit or you can make the whole place available. If you can let the whole unit, you’ll generate more income. You can target a wider market to include families and small groups.
The great thing about short-term letting is you can charge more for renting daily. You can enjoy higher earnings compared to long-term letting. Although you have to deal with frequent guest turnovers, you don’t have to feel stressed with the work involved. You can always partner with a property management company so they can help with the rental operations.
Co-working space
The increasing demand for flexible working arrangements strengthened the need for co-working spaces. Instead of furnishing your unit with home furniture and appliances, why not turn it into an office space? Put tables and chairs where people can work in peace. Set up a meeting room and install a secure Internet connection. Add elements like indoor plants and a small pantry equipped with tea and coffee makers. Turn it into a productive workspace.
This type of arrangement works well for well-lit and spacious properties. It doesn’t even have to be a property within the city’s business hub. It helps, but it’s not necessary. This type of letting strategy will help you generate income as you cater to the evolving work culture.
Event venue
This is also ideal for loft-type properties with enough space for events. Or if you have a spacious outdoor space, you can turn the property into an event venue. The city’s cultural diversity opens several opportunities for event venues in London. You can host private parties, corporate events, product launches, etc.
Make sure the property is equipped with basic amenities like a kitchen and bathroom for guests. Parking spaces would also be ideal. The rest can be left empty for setting up events.
This can be a great source of income if you can partner with an events company. Research the requirements to register your property as an event space and it should open a lot of opportunities for your vacant space.
Storage facility
If you don’t want to be burdened with furnishing the property for letting, you can always turn it into a storage facility. Set up a reliable security feature and turn the place into a climate-controlled space for storing various items. An outdoor or garage space can also be converted into a storage unit facility.
You can work with individuals or companies. This is quite a pragmatic approach that is still effective in generating income for property owners.
Steps to Transform Empty Properties into Attractive Spaces
Turning your void unit into an income-generating asset is a rewarding venture - as long as you set it up correctly.
To ensure success, here are the steps that will help you transform your vacant property.
Solve the reason why the property is vacant
Start by identifying why your property is vacant. Maybe you’re not marketing it properly. Or you’re not showing attractive photos that’ll attract residents and guests to stay on your property.
If repairs are the reason, you need to deal with it promptly to avoid further damage to the property. A water leak or a broken boiler can be easily fixed.
Identify the options available to let out the property
Once your property is ready for occupancy, it’s time to figure out the letting strategy that you can use. You can opt to turn it into a short-letting property. Or if there’s a demand for a suitable workspace in the area, turn your unit into a co-working space.
Research the available options and get a feel of what the demand is like in your property’s location.
Research market trends
Conduct market trend research to see how you can meet the preferences of your guests. If there’s a rise in business travellers or remote workers, make sure your property is equipped with a home office. Some eco-conscious guests prefer sustainable properties. That means installing energy-efficient appliances and smart home features will boost the marketability of your property.
If you cater to the evolving preferences of your market your property can enjoy a higher occupancy rate.
Comply with the legalities
Compliance is an important step to protect your property from legal issues in the future. As you research letting strategies, look up the legal implications of transforming your property for rent. What safety checks and certifications should you pass? These will guide you in determining what needs to be repaired or improved in the unit.
Make sure you get the property permits and register your property for letting. Be specific about the purpose and find out what your tax and insurance responsibilities are.
For instance, to convert a space into an event venue, what are the minimum amenities you should provide? Check the electrical, fire and gas safety measures. Understand the zoning and occupancy laws.
Legal diligence is important if you want to transform your void units into income-generating spaces.
Do the math
Calculating the right rental price is crucial to the success of your letting strategy. Research the average rental fees of similar properties within the area and consider your ROI (return on investment) targets.
Do more than just assess expenses. You should leave room for potential upgrades. Calculate long-term returns and balance it with all the financial obligations and operational expenses of the property. Focus on securing the property’s profitability and sustained growth.
Come up with a strong marketing and advertising campaign
Armed with a competitive rental price for your newly renovated and furnished property, it’s time to market it so people will know that it’s available for rent. As mentioned, there are times when vacancy periods can be solved by a well-executed marketing strategy. Do an online market research so you can come up with a strong campaign to advertise your unit.
Take high-quality photos that you can feature on social media platforms and property listings. Highlight the amenities that you know will attract your target market.
Explore partnerships
Collaborating with different companies can help improve the value and marketability of your property. For instance, if you want to turn it into an event venue, it’s better to partner with catering companies or event companies who can refer your venue to their clients.
If you want to venture into short-term letting, partner with a property management company. They can help manage and maintain the property. That way, you don’t have to deal with marketing and managing guests.
Work with Property Experts to Profit from Void Units
Turning void units into profitable assets can be a rewarding adventure. Make sure you deal with the vacancy issues of your property by physically improving the unit, making it sustainable and conducting legal diligence to stay compliant. Research market trends and guest preferences so you can figure out the right letting strategy to profit from what used to be a void space in your portfolio.
Partner with the right vacant property management to boost your chances of marketing your property for rent. You can get a property management company to assist in the strategic planning and seamless letting operations of your property.
Take the first step to maximise the earning potential of your property. Opago has the wealth of experience and expertise to help unlock the profitability of your vacant unit.
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