How to weather a property market crisis?
In the current situation, property prices appear to have soared, while rents, particularly for long-term lets of larger flats in major cities, have stagnated or fallen slightly. The economic situation and high energy prices forced landlords not to increase rents, or even to reduce them, so as not to lose tenants who could not afford to pay after such an increase. As a result, property owners who rely on rental income found themselves in a difficult position.
Sell or wait?
However, there is no need to dispose of your property immediately, even if it is not currently earning as much as expected. Many experts agree that property prices are likely to rise further, so this is not the best time to sell. If you are seriously considering selling your property, we recommend waiting a little longer; an economic recovery is expected to bring rising property prices as well.
Lower rental income
It is important to realise that rent levels reflect developments in the economy with a delay. This means that even if the general economic situation begins to improve, rents may not immediately reflect this positive development because existing signed agreements do not allow flexible responses to changes in the economy. High inflation over the past year put pressure on rents to rise, forcing landlords to take this into account in their calculations in order to keep their investments profitable. However, not everyone could afford such increases without losing tenants. Alternatively, they could raise the rent and risk losing their tenants, resulting in a complete loss of rental income while they searched for new ones. However, there is a simple solution that takes these worries away from landlords.
Certainty of rental income in uncertain times
Property owners can consider various ways to maximise their rental income even during a period of stagnation. One option is to use professional property management or services provided by real estate agencies, which can help ensure a stable rental income. A guaranteed rent service, which guarantees the property owner an agreed rent in advance, can be an attractive option for owners who need to secure regular rental income while minimising the risk of lost income.
Overall, the situation in the property market is complex and depends on many factors, including regional market conditions, the type of property and the owner's strategy. Every owner should carefully consider their options and, where appropriate, consult professionals to ensure that any decision to sell or let a property is as well considered as possible.