Room for Rent – Bills Included?

You might think that setting the rent you charge for your room is simple. You just pick an amount that:

  • covers your mortgage
  • gives you a profit
  • reflects the facilities, size and location of the room

Once you’ve done your research, including checking the SpareRoom Rental Index, you’ll know what the going rate tends to be in your area, and you can pick your figure. Right? Wrong.

There are two additional factors you need to consider when deciding how much to charge (and they could have a big impact on the response to your ads).

Bills Included or Excluded?

The most popular way to advertise on SpareRoom.co.uk is bills included. We recently polled our users, asking them how they prefer to see rents displayed in SpareRoom ads. The overwhelming response was with bills included in the amount (94%), with only 3% saying that they preferred to see the amount without bills, and the same percentage not having a preference either way.

Having bills included makes it easy for tenants and lodgers to keep a handle on their outgoings, so they know how much they can afford to then spend on more appealing things – food, clothes and going out! When bills are excluded, it’s unnerving that you could at any time be presented with a large bill you hadn’t planned for.

A quick search of our database reveals that only 14% of our rooms are currently offered exclusive of bills, which should keep most sharers happy!

Weekly or Monthly rent?

The second factor to consider is whether to offer your room with a weekly or monthly rent. Going by current trends, most room advertisers (66%) show a monthly rental amount, whilst 34% list rent weekly. But what do room seekers prefer? Weekly amounts look significantly lower, so it’s tempting to think that could entice them to click on your advert.

A room seeker, scanning a list of mostly monthly rents, might be tempted to click on a tantalizingly low figure. When they realise it’s a weekly amount and, therefore, not as low as it first seemed, they may feel slightly duped.

Our theory was that room seekers would overwhelmingly prefer to see monthly rents, especially if they’re receiving a monthly salary rather than a weekly wage packet. But then we analysed Room Wanted ads (placed by over a quarter of a million room seekers in the last year) and discovered that, in fact, only 60% express their budget in terms of monthly rent, with 40% choosing to state it in weekly terms.

So although there is a defined preference for monthly, it’s not as clear-cut as whether to include bills or not. Something for you to ponder, before you place your next room offered ad.

Why would you want to attend a property networking event?

Guest blog

Simon Zutshi, experienced property investor and author of Property Magic, the Amazon.co.uk No 1 best selling property book, explains why and how you could benefit from regularly attending property networking events.

If you want to be more successful in any business, it can be a great idea to network with other people in the same industry, so that you can share ideas, contacts and keep up to date with changes in the industry.

As a Landlord you will know that the property market has certainly changed dramatically over the last few years and right now with current market uncertainty there are some great investment opportunities available. However, the methods and strategies you used to purchase a few years ago may not be the most appropriate to use in the current market. This is why it is essential to learn from other successful landlords, which is one of the benefits of attending property networking events.

For many people there is nothing worse than the thought of going into a room of full of strangers and having to make polite conversation. Actually it is not that bad, because the other people there are like-minded, positive people like you, who are all interested in property investing. You might find it an enjoyable and even profitable experience. At these events there are investors who want to buy properties, landlords who want to sell their properties as well as all sorts of service providers who could be useful contacts for you.

At most of these events there are usually speakers who share their property investing experience with you.

If you want to attend a property networking meeting, here are 3 easy steps to maximise your networking experience:

1. Before you go to the event

Work out what you want to achieve by attending. Maybe you want to find someone who can recommend a good handyman or letting agent in your area, or you want an investor to put some money into a joint venture. Whatever it is, write down a clear intention so that when you meet people at the event you can clearly explain what you are looking for. Also think about any other investors who you know who might be interested in attending such an event and invite them to come along with you. Make sure you have some business cards to take with you for when people want your contact details. They don’t have to be fancy or expensive cards just something with all your details on.

2. At the event

Plan to arrive early and leave late. Speak to as many people as you can. Of course you should say hello to the people you already know but make sure you also speak to people who you don’t know. When you meet someone ask them what their name is, where they are from, what they want to get out of the meeting and how you can help them. Be interested in them first rather than telling all about you. Look for how you can help the people you meet. Also think about people you already know who may like to meet them. Make sure you also collect cards from all the people you meet. You may also like to write a little note on the card to remind you what they were interested in and how you might be able to help.

3. After the event

When you get home go through all of the business cards you have collected. Send a follow up email or text to everyone you met. Reconnect with them and send them any information and contact details you promised to give them. It is best to do this follow up the day after the event so that people remember you and the conversation. Keep in touch with them and build your personal contact list. There is no doubt the more people you know the more successful you will be because you will have a number of people you can call or email for advice and help.

So why not give property networking a go to see for yourself how beneficial it can be. The Property Investors Network (PIN) hold 26 meetings all over the UK every month (except August and December).

Normally it cost £20 to go to a pin meeting, however as a SpareRoom customer we have arranged for you to receive a £20 voucher so your first visit is on us. Just go to www.pinmeeting.co.uk, choose your meeting and enter “spare2012” into the voucher code box on the booking form

===

Matt Hutchinson, Director of SpareRoom.co.uk will be speaking at PIN meetings in June (Manchester – Weds 20th) and July (London – Tues 24th)

The future looks bleak for young renters

Today the Joseph Rowntree Foundation published its predictions for housing options and solutions for young people in 2020. The study identifies the uncertainties in housing options for young people, which together with high youth unemployment and lack of credit, will further inflame the housing crisis by 2020.

Fewer affordable options for young people

The study predicts that:

  • 1.5m More young people (aged 18-30) will be pushed towards the private rented sector in 2020, as access to home ownership and social renting is limited
  • More young people are expected to stay living with their parents for longer
  • Those who choose not to stay at home will be renting well into their 30s, and homelessness is likely to increase due to a growing lack of affordability
  • There will be more competition for a limited supply of rented accommodation amongst those unable to qualify for home ownership or social housing.

The private rental sector is already in crisis. A BBC article on the report quotes 28-year-old Charlotte Davis, a young professional living in London who says “finding a house share is like going for a job interview with up to 10 other people applying for the same room”. She has had to move house every year since she started working in 2008 due to rent increases, with her current landlord committed to pushing her rent up by 40%, forcing her to look elsewhere, yet again. Charlotte’s situation is not unusual, and yet the impact that this crisis is making right across her generation is mostly going unnoticed.

What needs to happen to improve the situation for young renters

Young people, especially the vulnerable, need solutions that bring down the cost of housing and increase the supply. Renting needs to work better for young people. There are two main areas that need to be tackled:

1) Increased supply of good housing stock.

This includes incentivising landlords to invest in properties, maintain them well, and make them available to renters across all income levels.

Considering live-in landlords as valuable providers of rental accommodation to individual lodgers has slipped off the policy agenda, with the tax free allowance of £4250 unchanged since 1997, whilst average rents have more than doubled.

There should also be encouragement for mortgage companies to allow homeowners to rent out rooms or indeed their whole property, if they choose. The need is a pressing one, as budgets tighten and homeowners struggle to keep up with mortgage payments. Accepting lodgers is certainly preferable to forcing repossession for all concerned, whilst serving to increase the affordable accommodation supply for young people.

New affordable home building is disappointingly slow. The Homes and Communities Agency announced today that the number of affordable housing starts fell 68% from 2010 to 2011. Policy makers need to go further to start to generate genuine new supply, rather than just moving properties from the owner-occupied or social sectors into rental.

2) Achieve a more stable private rental sector.

Many accreditation schemes for landlords are considered to be burdens, offering no advantages to their members. Legislation will continue to be ignored by rogue landlords, and create more of a burden for good ones. Security of tenancy also needs to be tackled, as long term tenancies are not widely available, leaving young people vulnerable to regular rent rises and eviction. Lenders are often unwilling to support long term tenancies within their mortgage terms.

Vulnerable young people are being pushed out of the social sector as Housing Benefit changes restrict people under 35 to a single room in shared accommodation. At the same time, landlords are put off creating a supply of private shared housing options as local authorities bring in confusing licensing requirements for HMOs.

David Clapham, of the Joseph Rowntree Foundation, says “young people are at a ‘double disadvantage’ with lower wages and not enough homes available to rent or buy”. In our opinion, it will take a genuine coming together of national and local policy makers, the construction industry, mortgage lenders, landlords and tenants to start to tackle this growing crisis.

Can we dare hope?

Sam