I’ve done a few posts about rental prices rising and whether landlords who haven’t raised rents, should. The question of how much rent to charge is always something I am asked and the answer is that in Medway, it all depends on the property, the location and the quality of the refurb.
According to the very latest Zoopla stats, there are currently 347 private residential properties to rent in Medway, varying in style and location. As expected, Rochester has some of the highest rents with 4-bed properties renting at £2200 pcm and a room averaging around £340 pcm. But what might surprise people is that Chatham comes in very close to that, with a very smart new build 4-bed renting at £2150 pcm and a room at £325 pcm.
Gillingham holds the cheapest rental rates. At around 18% cheaper than Chatham, a 4-bed rents for around £1800 pcm. Of course, this plays to the potential rental market in Gillingham with its high proportion of students. The large, traditionally-Victorian style houses that are very common in Gillingham, make for excellent student accommodation or conversion to a HMO (House in multiple occupation).
My management company have just fully let a property in Gillingham containing 4 self-contained flats, three of them are studios and one is a small one-bed, for a total rental of £2,425. They were fully let before the renovation was even finished. We also have a 2 bed flat and a 2 bed house in Gillingham which we are looking to achieve around £700-800 pcm for each, and a 3 bed house in Halling for £950 pcm.
So how does Medway compare to the rest of Kent in terms of rental prices? The last set of KCC numbers on the private rental market show the average monthly rent in Kent at £826, which is lower than the national average of £852 pcm, or even the South East average of £994 pcm. Medway was in fact one of the five Kent authorities (along with Dover, Thanet, Shepway and Swale) that held the lowest rents in the whole of the South East at £740 pcm.
While I was taking a look at these numbers, I also checked out the average rates for a local authority rental. In Medway, this was around £84.26 a week which equates to around £365 pcm. Council properties are always in demand and with privately rented properties being on average 202% more expensive, that’s not surprising. But of course, people’s housing needs are not always determined by preference but often by necessity, which is why I find it somewhat frustrating that people still lament HMOs. If they are well managed and meet all the regulations stipulated by the local council then what is the issue? My guess is that despite the great quality of renovations and management we offer, in general HMOs still carry something of a stigma about the calibre of tenant. Which, of course, anyone anticipating the arrival of a new neighbour is concerned about. But I think that perhaps HMO tenants are tarred with the very unfair brush of being potentially problematic tenants – which actually couldn’t be further from the truth. Often professionals, white or blue collar workers, HMO tenants come in all shapes and sizes. It is true that in Medway there is a high proportion of students but that is the demographic of the area and will not change, given Medway Council’s aim to gain a waterfront university city status.
Those who are in need of affordable accommodation also play a big part in the tenant market of HMOs, but that’s true of any rental. With the correct background checks and certainties that rent can be paid, there’s absolutely no reason why an HMO should be any more problematic than a standard private rental.
Interestingly, I’ve just read in the KM that Kent taxpayers are being short-changed of £92,000 due to local authority tenants not paying their rent. Seemingly, 23% of Kent County Council tenants have failed to pay their rent for more than two months. Whether that’s people or businesses is unclear but it’s evidence that not managed carefully, rental collections can be a problem at all price points.
If you have rental property you would like to earn a passive income from, or indeed a large property you are considering converting to an HMO, I’m happy to offer free help and advice. You can reach me by email at firstname.lastname@example.org, on LinkedIn or Facebook.