How Landlords Create Their Own Voids: Yield vs Quality Tenants
Landlords often prioritise rental income when investing in property, but focusing too heavily on high-yield opportunities without considering tenant quality can lead to longer void periods, unexpected costs, & stress. Understanding how to balance yield with attracting the right tenants is essential for a profitable and sustainable rental portfolio.
Understanding Void Periods
A void period occurs when a rental property is unoccupied and not generating income. While some downtime is inevitable due to tenant turnover, poorly managed properties can stay empty for months, significantly impacting cash flow. According to recent UK property market data, the average void period is around 1–2 weeks per tenancy, but certain areas or property types see much longer gaps.
Long void periods can be costly, not only because rent isn’t coming in but also due to ongoing mortgage payments, utility bills, insurance, and maintenance costs. For landlords heavily relying on rental income to cover these expenses, even a short void can be financially straining.
The Yield-First Mentality
Many landlords are drawn to properties promising high rental yields, often in areas with lower demand, less desirable locations, or older properties needing refurbishment. While a high yield may seem attractive on paper, it often comes with hidden risks.
Common pitfalls of a yield-first approach:
- Lower-quality tenants: High-yield properties in less desirable locations may attract tenants with less stable employment or short-term rental intentions. This increases the risk of late payments, property damage, or frequent turnovers.
- Frequent turnover: Tenants may move quickly if the property or area does not meet their expectations, creating repeated voids.
- Higher maintenance costs: Older or neglected properties often require ongoing repairs, which can deter tenants and prolong vacancies.
Example: A 2-bedroom flat in a high-yield post-industrial area may promise a 7–8% return, but if tenants frequently leave due to poor transport links or limited amenities, the actual annual return drops significantly once void periods and repair costs are accounted for.
The Importance of Quality Tenants
Securing reliable, long-term tenants is crucial for consistent rental income. Quality tenants are more likely to pay rent on time, take care of the property, and stay longer, reducing turnover and void periods.
How to attract quality tenants:
- Invest in property quality: Modern fixtures, safety upgrades, and professional decoration make a property more appealing to professionals or families seeking stability.
- Competitive pricing: Overpricing can lead to longer voids. Research local market rents and set a realistic, fair price.
- Professional marketing: High-quality photos, virtual tours, and detailed listings help your property stand out in a crowded market.
- Thorough tenant referencing: Conduct credit checks, employment verification, and past landlord references to ensure reliability.
Example: A 3-bedroom house in a commuter-friendly area with nearby schools and amenities may achieve a slightly lower yield than a high-risk urban property but will likely enjoy longer-term, stable tenants, reducing voids and stress.
Balancing Yield and Tenant Quality
The most successful landlords focus on both yield and tenant quality. While chasing high yields may offer short-term profits, it often leads to long-term voids, higher maintenance costs, and management headaches. Conversely, prioritising only tenant quality without considering returns can limit the overall profitability of your portfolio.
Strategies to achieve balance:
- Target mid-yield properties in high-demand areas: Suburban areas, commuter towns, and cities with strong employment opportunities often offer a good balance of rental income and tenant quality.
- Selective upgrades: Small improvements such as modern kitchens, bathrooms, or energy-efficient appliances can increase tenant appeal and rental price without eroding yields.
- Long-term financial planning: Assess the total return on investment, including rental consistency, void periods, and maintenance costs, rather than focusing solely on headline yield percentages.
- Flexible rental strategies: Offering slightly shorter or longer tenancy terms, or accepting pet-friendly tenants, can reduce voids while attracting responsible tenants.
Market Trends to Consider
The UK rental market has shifted in recent years. Post-pandemic, tenants are prioritising space, access to green areas, and work-from-home-friendly properties. Landlords ignoring these trends and focusing solely on yield may struggle to find tenants.
For example, a central city studio may offer high yield but appeal to a smaller pool of tenants, while a 2-bedroom suburban flat may achieve slightly lower yield but consistently attract families and professionals, reducing void risk.
Final Thoughts
Landlords in the UK can inadvertently create their own voids by focusing too heavily on yield at the expense of tenant quality. Prioritising tenant reliability, property condition, and location alongside financial returns ensures more stable income and less stress.
By working with us, you can be assured that we will evaluate the best pricing strategy for your property, maintain property standards, and focus on attracting you tenants who will treat your property with respect. All of this while minimising void periods and maximising long-term profitability. So give us a call on 0121 681 6327 to get started!