The Cost of Leaving Your Property Vacant
Leaving a property empty can quickly become financially difficult. Bills such as council tax, electricity, water, ground rent and maintenance will keep coming in, without any tenants to offset them. According to a report by the Office Of National Statistics, around 5.4% of homes in England are unoccupied, with 89.7% of these being truly vacant (as opposed to second homes). These statistics focus on residential swellings -the total number of unoccupied buildings when taking into account office space and other properties, will be much higher.
The risks of leaving a property empty include:
- Security Risks: Unoccupied properties are prime targets for vandalism, squatting, and theft. This not only leads to costly repairs but also diminishes the property’s value and neighbourhood appeal.
- Insurance Issues: Insuring an empty property is often more expensive, and some insurers may refuse to cover properties left unattended for extended periods.
- Maintenance Costs: Even when empty, properties require regular maintenance to prevent deterioration. This can include structural repairs, garden upkeep, and utility management.
- Council Tax: It’s likely that property owners will still be liable for council tax on empty properties, which adds to the ongoing expenses without any offsetting income.
Making money from your empty property – what are the solutions?
Property Guardianship: A Viable Option
Property guardianship offers a compelling solution for property owners looking to secure and monetise their vacant properties. This arrangement involves placing vetted guardians in the property to live there temporarily. This makes for a mutually beneficial relationship, where guardians enjoy reduced living costs, and landlords are able to make money from their empty properties. Other benefits for landlords include:
Security and Maintenance
Having property guardians ensures that the property is occupied, reducing the risk of vandalism, theft, and squatting. Guardians typically pay a fee to live in the property, which can help cover maintenance costs and minor repairs, ensuring the property remains in good condition.
Financial Benefits
The financial aspect of property guardianship is appealing. While the exact income can vary, guardians typically pay between £200 and £700 per month, depending on the location and size of the property. This can translate to a substantial annual income, especially for properties that would otherwise remain vacant.
For example, a property in London could easily generate an income of £600 per month per guardian. If a property can accommodate five guardians, this translates to £3,000 per month or £36,000 annually. This income can offset the costs of ownership and provide a steady revenue stream without the complexities of traditional rental agreements.
Flexibility
Property guardianship provides flexibility for landlords. Unlike traditional tenancies, guardianship agreements are usually more straightforward and can be terminated with shorter notice periods, allowing owners to regain possession quickly if they decide to sell or repurpose the property.
Social Impact
By opting for property guardianship, landlords contribute positively to the community by providing affordable living spaces for key workers, students, and young professionals. This not only helps alleviate housing shortages but also brings vibrancy and life back to otherwise neglected areas.
Other Options for Monetising Empty Properties
While property guardianship offers numerous benefits, this may not suit everyone. Other suggestions to make money from an empty property include:
1. Offering it as a storage facility
An empty property could be converted into a storage facility business. While some investment may be required to create the facility, once the property is set up as such, this could be a lucrative option. The Self-Storage Industry Report 2024 reported that average rental returns are £26.23 per square foot.
2. Make It a Film or TV Set
If the property is in a unique location or has particular features or quirks, offering it to film or television production companies can be an interesting way to generate revenue.
Rates differ based on the property’s uniqueness, size, and location. According to data from the Film London Partnership, properties in London can earn anywhere from £500 to £5,000 per day.
3. Turn It Into an Office
The demand for flexible office spaces has surged, particularly with the increase in popularity for remote working. Many businesses now look for more office space that suits this new hybrid model. Converting a residential property into a coworking space or private offices can attract freelancers, startups, and small businesses. This can provide a regular income stream while keeping the property well-maintained and secure.
4. Rent Out a Parking Space
If your property includes parking facilities, renting out these spaces can be a simple yet effective way to generate income. In congested urban areas, parking spaces can command high rental rates. For example, a parking space in Central London can fetch upwards of £200 per month.
Why Property Guardianship Stands Out
Despite the various options available, property guardianship is an attractive option for several reasons:
- Comprehensive Security: Unlike other options, property guardianship ensures continuous human presence, which significantly enhances security and reduces the risk of property damage.
- Maintenance and Upkeep: Guardians often take responsibility for basic maintenance, keeping the property in good condition without additional costs to the owner.
- Community Contribution: By providing affordable living spaces, property guardianship supports community well-being and helps address housing shortages.
- Flexible Agreements: Guardianship arrangements are more flexible than traditional leases, allowing property owners to adapt quickly to changing circumstances.
How to Get Started with Property Guardianship
If you’re considering property guardianship, here are the steps to get started:
- Partner with a Reputable Property Guardianship Company: Companies like LOWE Guardians specialise in matching property owners with suitable guardians. They handle the vetting process, contracts, and ongoing management.
- Prepare Your Property: Ensure the property meets basic living standards. This may include minor repairs, cleaning, and furnishing.
- Set Clear Terms: Work with the guardianship company to establish clear terms and conditions for guardians, including responsibilities, fees, and notice periods.
- Monitor and Maintain: Regularly check in with the guardianship company to ensure the property is being well-maintained and address any issues promptly.
Conclusion
Monetising an empty property doesn’t have to be a daunting task. By exploring options like property guardianship, turning the space into a storage facility, or renting it out for filming, landlords can transform vacant properties into profitable assets. Among these options, property guardianship stands out for its comprehensive benefits, providing security, maintenance, and a steady income stream while contributing positively to the community. If you have an empty property, consider property guardianship as a viable and beneficial solution to maximise your investment.
For more information on how LOWE Guardians can help you make the most of your empty property contact us today.