Landlords need to be prepared to compete for tenants after the Olympics, says Graham Kinnear
On your marks
The Olympic Games has been billed the greatest show on earth - and for many private landlords, it is.
Some landlords in London are currently experiencing a gold rush of vastly inflated rents for the duration of the Olympics, with many charging up to five or six times the normal rate. But the real concern is what may happen to rents after the games are over.
Without question there will be an oversupply of rental accommodation in the area following the games as landlords are forced to put their properties back on the market and compete for new tenants. Landlords should be prepared for this and commence their marketing as soon as possible to avoid having a void period on their hands.
Many people bought properties in the London area when the London games were first announced back in 2005 with the intention of selling at a profit this year.
However, the global financial situation has, in all likelihood, changed these plans and these properties may become available for rent. It is also likely that some of the accommodation at the Olympic park will also be put on the market.
With so many properties entering the market at the same time this will exert downward pressure on rent prices as landlords try to find replacement tenants.
My advice is to secure a good quality tenant as quickly as possible and to offer an incentive to an incoming tenant if this will get a deal done. This could be a reduced initial rent or a rent-free period.
The oversupply of accommodation could take up to 12 months to be soaked up and so the potential void costs could be huge for landlords who cannot secure a tenancy promptly.
Graham Kinnear is managing director at Landlord Assist