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Another buy to let mortgage boom?

by admin

Last week at The Big Property List, we looked at the high number of mortgage applications that are currently being turned down and highlighted just how difficult it is to gain any foothold on the property ladder today. As with most things however, bad news for many will result in good news for a few and figures are clearly showing a significant increase in the number of buy to let mortgages currently being granted.

In relatively recent times, buy to let mortgages were seen as a market for specialist lenders only but all that has changed to move in line with the property market itself. When traditional house sales are slow, buyers with money to invest in rental properties step in and this type of purchase becomes more prevalent.

Now it seems the buy to let boom is back, with specialist lenders returning to the market with good rates after identifying the trend for investment properties. As a result, in just over 12 months, the number of mortgages available for this niche market has increased from 295 to 481.

David Hollingsworth from independent broker London and Country said,

“There are definitely more lenders who are back in the market. Skipton stopped any buy-to-let and came back within the past couple of months offering quite good rates.”

“Paragon, a specialist lender in the sector, came back at the end of last year,” he added. “They had been associated with a professional landlord but have launched mortgages which are geared more to ordinary people entering buy-to-let for the first time.”

With the increase in second homes there has been a steady entry into the market of families who buy an additional property as a one off investment. While the professional landlords still remain, there is an increase in the number of investors who are taking advantage of the market to snap up a second property. As that additional purchase is made available for rent, the need for buy to let mortgages has grown.

Times have changed however and the new range of buy to let mortgages are, as rule, more restrictive and whereas a deposit of 10% may have been enough to secure a loan some five years ago, you can expect to have to find around 30 to 35% now. Additionally, there is now an absolute minimum salary requirement of £20,000 which shows a shift away from previous times where buy to let income alone could secure a mortgage.

This is all very well but on the face of it, it seems like good news for the professional landlord, but with the market becoming increasingly difficult for first time buyers, there is a noticeable shift towards renting your home.

With two thirds of mortgage applications being turned down, renting can quickly become the only option. In turn, professional landlords are now being joined by the one off property investors and as a result, an imminent boom in buy to let mortgages seems like a natural progression.

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How to Evict the Tenant from Hell

by Sarah Halloran

A couple of weeks ago we published an article on how to avoid the tenant from hell, but what if they have already infiltrated your defences?  They may have passed all the credit checks, ticked all the right boxes, paid rent on time and shown all the signs of being the model tenant only for problems to suddenly occur.  Whether you are having problems with rent being paid or damage being made to your property there are procedures you can follow to evict a tenant if things have gone too far.

Keep Communication Lines Open

Communication is the key issue when problems occur between tenant and landlord and it’s important that you make your intentions clear from the outset.  If your tenant has fallen behind with the rent or is refusing to pay then you have every right to protect your rental income and investigate legal proceedings if necessary.  The good news is many problems such as this can be resolved by finding out what the issue is.  If your tenant has fallen behind the rent because of a certain misfortune you can give them a date by which they need to come good with the rent giving them a little leeway.  After all, it’s going to be a lot more hassle to find another tenant than wait a couple of weeks for the rent that is due.

If your rental property is mortgaged then you may have an obligation with your lender to keep your rental income above a certain level.  If you have no choice, but to start the eviction process then you need to check that certain procedures are followed.

Before you begin the eviction process you must ensure that both yourself and your tenant has a signed copy of the tenancy agreement and that you are confident of the rent schedule.  You should also check that the rental deposit is protected sufficiently and that there are no disrepair issues with the property in question.

Issuing the Paperwork

If your tenant is more than 2 weeks behind with the rent then it’s time to serve a Section 8 notice.  This notice must be responded positively within two weeks of receipt and if the tenant has not done so you should begin legal proceedings immediately.  It can take anything up to 8 weeks for a court order to be issued.

Before you process your claim you should ensure you have all the relevant paperwork and evidence available.  If there are any errors or false claims these will be brought to light at the hearing and could result in a second hearing or a dismissed claim.

Problems with Legally Evicting a Tenant

Of course, in our democratic society, tenants always have the right to defending their position.  The court will send your tenant a copy of your claim to the tenant advising them strongly to seek legal advice.  Free help is available to tenants from Shelter, solicitors, the Citizens Advice Bureau and also their local housing authority and there are also a number of specialist Government websites offering advice to tenants facing eviction.  There is a severe shortage of council and social housing available in the UK right now and these organisations will do all they can to ensure tenants can remain in their rented accommodation.

However, the law is the law and you as a landlord have a right to evict a tenant who has breached their agreement or is refusing to or simply cannot pay their rent.  As long as you ensure you communicate with your tenant and attempt to resolve any difficulties you may be able to avoid the long and arduous process of tenant eviction.

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10 Tips on How to Avoid the Tenants from Hell

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by Sarah Halloran

There is often a lot said about rogue landlords and how to avoid renting from them, but what about the reverse side of the coin – the rogue tenant?   If you are a landlord and have had bad experiences with non-paying tenants or you are just starting out in the renting game you might want to read some of our tips below on how to choose your tenants wisely.  Of course, there are the usual reference checks and so on, and many might see some of the checks as bureaucracy gone mad, but they protect your interests, your property and ensure you make the right decision.

Don’t be Complacent

It’s really important that you treat property rental the same as any other business.  Your tenants are paying customers and therefore it’s in your best interest to make sure they are able to pay the right amounts on time and adhere to the rules you set out.  Naturally you also need to step up to your side of the bargain and provide good landlord services

Produce a Comprehensive List

Before taking on any new tenant you could create a rundown of the information you need from tenants and ask them to provide everything before you go ahead with the tenancy agreement.  This will at least test whether they are serious about renting from you and simply not wasting your time.

Obtain Some ID

Make sure your tenants are indeed who they say they are.  Ask for photographic ID such as a passport or a visa if they are from outside the EU.  Take photocopies and keep on file.

Obtain an Employer’s Reference

If your tenant is employed and not on DSS or a student, you can ask them to provide a reference from their employer.  This will prove they are in employment and should be on headed paper and written by a senior member of staff.  Some tenants embellish or tell lies about their employment so checking out the phone number and website on the reference will go a little way to proving it is genuine.

A Reference from a Previous Landlord

This is a great reference to get.  Ask for a letter that states when the last tenancy agreement started and ended, whether the rent was paid on time, and whether there were any problems with conduct during the tenancy period.  Again, a quick phone call to said landlord might be a good idea to prove the letter is genuine.  Also, bear in mind that the landlord may have written a glowing reference in order to get shot of their tenants.  If you have any doubt in your mind you can also ask for a reference from the landlord before last as they will have nothing to gain from fudging the facts.

Bank Statements

Of course, as a landlord your business is collecting the rent and you’ll want that rent to be paid on time and in full.  Requesting bank statements will prove your prospective tenant is able to meet the payments, is paid on a regular basis and that they are who they say they are.  You can also check wages are being paid in by their employer.   Payslips are also a good way of checking income.  The bank statement should also state the prospective tenant’s current address.

Credit Checks

You’ll need to obtain your tenant’s permission to carry out a credit check and it will cost you in the region of £10, but credit checks do hold a lot of water when it comes to vetting tenants.

Letting Agent Checks

If you are using a letting agent, they may want to use another company to carry out the checks.  The majority of agents act with great care and ensure that all relevant checks have been carried out before agreement is made on tenancy.

Sixth Sense

In many cases you have to rely on your natural instincts.  If something is amiss and you can’t quite put your finger on it there is usually a good reason.  You have every right to refuse a tenancy if you have a feeling it will be a bad decision.

When Things Go Wrong

Inevitably, if you rent out a lot of properties there are going to be occasions where you experience a bad tenant in one shape or form.  For example, some tenants might not be able to afford their rental payments.  In some cases it is just best to let them go early and look forward to vetting and greeting a new tenant.

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Rogue Landlords No Laughing Matter

by Sarah Halloran

The housing charity Shelter has come up with a clever way to back up its campaign against rogue landlords.  They’ve created a dark comedy film starring Sean Lock as a less than honest private landlord.

The five minute film shows Lock in full rogue landlord guise showing potential tenants around his dark, dingy, and dangerous property apparently oblivious to the problems the tenants would be facing should they be mad or desperate enough to move in.

Risky Business

It can be risky renting a property especially when so many rogue landlords still operate across the UK.  Letting out homes in appalling condition and harassing their tenants is all in a day’s work for an unscrupulous landlord and they are continuing to get away with it.

Shelter is currently aiming to raise awareness of these practices and the fact that complaints to its hotline have risen by 23% in the past year is cause for concern.  This rise in complaints is partly down to a larger number of people choosing to rent property over mortgaging, but it also shows how rife the problem of rogue landlords is in the UK.

It might be shocking, but according to Shelter, only 2.2% of landlords actually belong to any professional body.  Even more worrying is that, according to a YouGov survey, almost one million people in the UK have been the victim of a private tenancy scam or a dodgy landlord in the past 3 years.

Time for Change

In light of these figures, Shelter is calling on the Government to form a national standard for landlords in the UK.  This could require all landlords to become a member and to commit to providing good quality accommodation, fulfilling their duties, and to follow a defined set of principles.

Shelter is currently requesting people to sign their petition in a bid to convince the Government that they have a duty to protect people renting homes across the UK.

Campbell Robb, Shelter’s Chief Executive, said “The Housing Minister’s claim that ‘the vast majority of England’s three million private tenants are happy with the service they receive’ has been seriously thrown into question.” He went on to say “It’s frightening to see complaints about bad landlords are increasing at such a rate, at the very time when renting a home is fast becoming the only option for thousands of families across the country.  It appears that rogue landlords are cashing in on the growing market.”

It’s true that more and more people are renting these days and yet it seems almost implausible that no protection exists to protect the interests of those renting property.  Watch this space.  We’ll bring you news of any Government initiatives should they be introduced and will also keep an eye on the petition that Shelter are planning on presenting.

Oh and you can watch the Shelter short film here.  It really does highlight the problems that tenants are up against.

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Advice for First Time Landlords

by admin

Buying a first buy to let property is exciting and can be a great investment.  It also means that you have to get some of the important legal and financial issues sorted out before you have tenants move into the property.

If you’ve never owned a buy to let property and never had tenants there are probably quite a few unknowns you might be unsure of or that could be causing you concern.

This article will give you a run-through of some of the most important requirements you need to have covered in order to rent your property to tenants legally and safely.

Provide an Energy Performance Certificate

It’s a legal requirement to give tenants the chance to view an Energy Performance Certificate of your property.  These certificates give ratings from A to G regarding the energy efficiency of the property.  A is the most energy efficient and G is the least.  In order to get a certificate you will need to contact an accredited domestic energy assessor.

Protect your Tenant’s Deposit

By law you need to put tenant’s deposits into a deposit protection scheme within 14 days of receiving the money.  A Tenancy deposit protection scheme is there to guarantee that tenants get their deposits back at the end of their rental agreement providing that the property they have rented isn’t damaged.

Landlord Insurance

Having the right Landlord Insurance for your property is crucial.  This is a different kind of insurance than you would normally take out if you were living in your own home.  If something in your property is damaged or if someone is injured in your property you may well need Landlord Insurance to cover a claim.

Make Sure your Property Complies with Safety Regulations

It’s important to make sure that your property meets all the appropriate safety regulations.  The electrical appliances need to be checked every few years.  Gas appliances need to follow a similar procedure.  A “Gas Safe” engineer needs to inspect your gas appliances to make sure they meet all the correct requirements.

Hire an Agent

If you don’t want to deal with a lot of the administration and safety checks yourself you can always appoint an agent to look after the property.  They will charge you a certain amount of the rental income but it could save you time.

One of the best things you can do when becoming a Landlord is do a bit of research yourself and try to become as knowledgeable as possible about the whole process.  There could be legal issues and implications you might need to familiarise yourself with as well as the procedures for resolving disputes between Landlords and Tenants.

The legal and safety issues might seem overwhelming if you’re just starting out as a Landlord but once you have them all sorted out, being a Landlord doesn’t need to be so daunting.

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When is the right time to sell your buy to let?

by Julian Watson

No so long ago, buy-to-let was viewed as a pretty sure bet by those with money to invest; with the potential to make big long term profits, and a good interim income, they presented an attractive way to invest your money.  But with current economic volatility, and the fluctuation in housing prices, it’s no surprise that some landlords are now rethinking their portfolios.

Digging into our own data (here at Simply Business) we can see that when we compare the average market value of those properties insured with us in 2008 vs 2010 there is a drop of 6%. This is particularly significant when you consider that prior to 2008 we’d seen prices appreciate year on year.

Thinking of selling your buy to let?

I guess the question on many landlord’s lips is – are we going to turn the corner and see property prices begin to recover? Or,  is now the time to sell that buy to let? If you too are in this position it’s important not to act hastily – there are many things to consider when making the decision about whether or not to sell your buy-to-let property.

First and foremost you need to remind yourself of what your original investment aims were when you bought your buy-to-let.  For the majority of landlords this kind of property is a long term, high-yield investment, as opposed to an investment for short-term capital appreciation.   And if you fall into this category then it’s important to keep the long term in sight.

During the spring of 2010 thousands of owners off-loaded their buy-to-lets because of fears that the new government was going to raise Capital Gains Tax to 40 or 50%.  In the end the increase (and only for those who fell into the high-tax bracket) was to 28%.  This just goes to show that having a knee-jerk reaction in the world of property investment can be costly.

Similarly, to panic sell a property because there is a dip in market prices can end up being a mistake.  Many landlords feel that if they fall into negative equity they should get rid of their buy-to-let.  But this is really the worst time to sell.  Prices rise and fall but over the longer term they tend to follow a significant upward trend.  And the truth is that negative equity is only a problem if you sell, or find yourself in a position where you are forced to sell.

simply business logo

A long period of vacancy may also tempt landlords to sell their property. If this is the case for you, but you’re currently in negative equity it is important to note that there are other options open to you.  It’s always worth doing a bit of research into other rental properties in your area.  It can take only a small amount of money, and a little effort, to bring your property up to a standard where it will be easier to let.

But if you’ve reached a point where you’re ready to sell simply follow the usual property rules.  It’s well known that between March and July is the best time of year to put your property on the market.  And keep your eye on house prices and changes in tax and interest rates.  The last thing you want is to be selling in a buyers’ market.  But just as house prices fall, they also spike.  If you see a number of houses under offer in your area it could be a prime time to catch the buyers who’ve missed out.  However, if your neighbours have saturated the market with for sale signs that don’t seem to be going anywhere then it’s probably a good idea to hold off.

Overall, the most important thing to remember when you want to make a profit out of selling your buy-to-let is to not panic because of short term problems. Take the time to think through all of the issues at hand.  And always remind yourself – making a high profit on the property market is a long term investment.

Julian Watson is a guest contributor to The Big Property List blog. He’s spent more than ten years in the property industry and is the Landlord Insurance product manager for SimplyBusiness.co.uk.

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Rate or Hate your Landlord?

by James Cole

As a property undergraduate I recall sitting in damp digs smoking roll-ups wondering why I was reading about the the history of Landlord and Tenant Law when I could have been shooting pool in The Ship and sinking pints of cider for less than the price of a load in the laundrette.

The purpose of Landlord and Tenant Laws, I learned, are to balance the rights of both landlord and tenant.  With this island’s history rooted in a feudal system where peons lived in hovels at the pleasure of the landed gentry the tenancy laws handed protection to the people with regards their home.  Now we have the European Court of Human Rights and are kicking The Peers out of parliament in favour of Our Peers (in principle anyway).

We also have the Internet, access to more information than ever and we are replacing mob justice with blog justice as brands and behaviour are discussed online – favouring consumer power over public hangings.Rate or Hate your landlord logo

On The Modern Estate Agent blog, Martin Smith recently wrote about the importance and difficulty of managing online reviews for Estate Agents.  Well, Landlords may quiver in their boots now as a new website Rate or Hate your Landlord encourages tenants (yes you guessed it) to rate or hate their Landlord – publicly.Landlords and Estate agents your online reputation is important

PR companies talk of online reputation management, which is fine for big business, but now your small business reputation may sink or swim based on what people are saying about you on social media sites such as facebook, twitter and ratings websites.

From a philosophical perspective you could argue that this is the most virtuous of virtual yardsticks, encouraging fair play and holding business to account in a way not seen since Anne Robinson presented Watchdog and supplementing the statutory rights applied by the Landlord and Tenant Laws.

Or, you could argue that small businesses will become slaves to public opinion and we’ll all start airing our dirty laundry in public.

After all customers are sometimes wrong, Tenants and Landlords can both lie and their are two sides to every argument.  The consumer has nothing to lose posting an anonymous review for a perceived injustice, whether real or not – the business does not share the anonymity and has to live or die buy its reputation.

And as for those damp student digs?  The day we left, the kitchen ceiling fell to the floor – literally.  We lost all our deposits – mainly to replace mattresses and re-seed the postage stamp lawn where excessive wear and tear (football) had resulted in a bald patch – supposedly costing hundreds of pounds.  If only there had been an outlet for us to vent our fury and shame our greedy Landlord.

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Finding investment property is rather akin to sticking a pin in a map

by Ed Mead

Last week we thought about buy to let, and whilst that suits certain investors one of the real issues that’s been pondered increasingly is that of institutional money finding it’s way into residential investment.

Commercial property is a safer bet, at least in terms of a solid income, and simpler to manage.  Most tend to be for 15 years with the tenant responsible for all rent and rates as well as insuring and repairing the premises. With luck the investor gets the rent paid, upwards only rent reviews and is handed back premises in re-lettable condition. Capital growth is of less concern than income.

Residential letting is a different ball game. Tenants come and go more often, with attendant void periods.  Management is often of the micro variety and there’s little control of how the place will look when you get it back.  That’s before legal issues around tenants not paying or leaving are taken into account.

Whilst there’s more protection for residential tenants now landlords can still be at the mercy of rogue letting agents who still don’t (yet) have to belong to a redress scheme or be licensed.  Good management is not cheap and as usual you do tend to get what you pay for and this cost eats into the bottom line.  It’s certainly higher than with commercial lets.

The holy grail of course, and never has so much money been crying out for a good home, is the potential capital growth, and seeming rent increases, available to small time landlords.  Of course both capital values and rents can go down, as was seen a couple of years ago in London when both dropped dramatically, but overall the inexorable rise in capital values is enough to drive money into this area.

One fly in the ointment here is that traditional volume landlords have learned long ago that they don’t do this for income, long term capital growth has been spectacular.  In an ideal world rent pays any finance costs and upkeep as of course every few years the property will need updating.  This is fundamental and has held institutions back.  But the gains these landlords have made, just look at the number of property people in the rich lists, have been enviously watched for many years.

My company seeded and started a fund three years ago (great timing eh!) in only prime property, and given that we have over 50 years experience of managing such investments it’s been a success because we know what we’re doing, but has still been hard work.  Money is still slow to come in as for some reason the FSA has said that a property fund with ANY gearing (ours has 20%) is a “risky” one.  However, it has shown that efficient management is the key, and for any institution looking to start a purely residential fund it is the key.

Sourcing property for investment is also a headache and I was heartened to see an entrepreneurial company looking to help potential investors. Rankdesk (www.rankdesk.com) is currently something of a blunt tool but it seeks to rank properties with the kind of criteria used by potential tenants, i.e. closeness to transport, lift, condition etc.. With take up the efficacy will improve and become of real use, and given that finding investment property is still rather akin to sticking a pin in a map it could be the first step to genuinely helping people invest.

As for the players that control the really big money looking for a home in the resi world, they’re circling, but where will they land.

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What does it mean to be an ethical property investor?

by admin

by Roberta Ward

When I was requested to write an article about ethics in property investment I was asked a few questions:

• Do ethics and property investment make easy bedfellows?
• Are there ethical dilemmas in property investment?
• What does it mean to be an ethical property investor?
To answer these questions properly would take much more than one article, so I’m going to tell you in particular how we choose to apply it to our business.

Dictionary definition of Ethical: ‘moral principles, morally correct’.

Dictionary definition of Morals: ‘a persons standards or behaviour, concerned with right and wrong’.

These are the guiding principles which drive our business. I am often asked – “What is ethical property investing?”  The three things it means to us are:

• Not getting involved with companies or individuals touting a ‘get rich quick’
methodology
• Teaching people the truth behind methods of investing- good and bad/ ‘warts and all’

• Being extremely careful who we link with – and by this I mean on any level-whether that is a text link out from our website to another company or literally the people we choose to work with and for.
In truth, it’s been a huge challenge keeping a moral compass within property
investing. There are many times when you are tempted by bribes or incentives to be part of something questionable. But, our own stance is to connect with and help people who have the same ethics as ourselves. We never directly recommend anyone we have not worked with personally. That way, if they prove to be not what they seem, then at least it’s just us and not any clients of ours who lose money. If we are not completely comfortable with them then we don’t work with them.

mypropertymentor.co.uk is an ethical businessOur own code of ethics was developed over time because of the disgust we felt at the way property investing has been hijacked by marketing sharks who are really just chasing the quickest route to your money. The advent of huge ‘property networking’ events, which are little more than sales drives, has made the whole scenario very distasteful. It still amazes me why so many folks get sucked in by them.

As a company, we have to be very good judges of people, and we spend a lot of time examining those we do business with. The higher your profile becomes, the more people are keen to be seen working with you. This in itself presents a challenge and we have had to find ways to say ‘get lost’ politely! ( Not always easy-as those with poor reputations tend to be like a jack russell hanging on to a trouser leg!)

So back to the questions at the start of this article.

“Do ethics and property investment make easy bedfellows”- no not really, it’s complicated but it’s also very rewarding in the long term.

“Are there ethical dilemmas in property investment?” You betcha! Every day we come across new challenges, but business is about challenge after all.

“What does it mean to be an ‘ethical property investor?” It means having courage to stand up for how you believe business should be done and being prepared to weed out those who seek only to feather their own nest.

Roberta Ward is the owner of mypropertymentor.co.uk, a top 20 UK property blog, and teaches ethical property and wealth investment strategies for professionals via Joint Ventures, workshops and revolutionary collaborative events.

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Ten Tips for New Landlords

by admin
Advice for new landlords

Letting property in the UK?

1. Take safety very seriously.

Landlords have obligations under law to keep tenants safe in relation to gas (carbon monoxide), electricity and fire. By law you MUST have an annual, valid gas safety certificate at ALL TIMES. There is no legal requirement to have an electrical certificate, but the only real way to prove the electrics are safe is a certificate, so sensible landlords get one every 3-5 years. All furniture and furnishing must show a fire safety label, if it doesn’t, it’s illegal, and you need to remove it. It is also good practice to install smoke/heat detectors and a carbon monoxide alarm. We all deserve to be safe in our homes.

2. Reference your tenants & get a deposit & guarantor

Having non-paying tenants in your property means no income, and it may continue for several months. It is a landlord’s worst nightmare, but unlikely if you take the right steps. To significantly reduce the chances of problems, reference your tenants (e.g. RLA Tenant Referencing), get several applicants and choose the best – don’t just take the first one that comes along. Take a deposit (it needs registering by law in a deposit scheme (see the Government rules).

You should also get a guarantor (e.g. a parent or relative) to agree to pay the rent if the tenant doesn’t (most tenants are agreeable to this). If you take tenants on benefits, get the benefits paid into a credit union account if you can.Upad advertise property to rent

3. Look after the property

Before the tenants move in, take copious photographs, with dates on them – floor, walls, appliances, ceilings, doors, and windows. Print them off and get the tenant to sign each one, so they agree that is the current condition of the property. If they do damage the property, this is clear evidence which will help you retain some or all of their deposit. During the tenancy, visit to inspect the property every three months and inform the tenant of any improvements they need to make (you need to give the tenant advance written notice of visits).

4. Tell your lender & freeholder

If you don’t tell your mortgage lender you are renting the property out, you are likely to be in breach of your mortgage conditions, which may invalidate your insurance. The best policy is to inform your lender. Most are agreeable to homes being converted to buy to let properties. If the property is a leasehold property (i.e. a flat), you should also write to the freeholder and give them the tenant’s name and contact details in case of emergency (some, councils especially, may charge for updating their records).

always use a written tenancy agreement

5. Use a written tenancy agreement

Don’t even think about letting a property without a written tenancy agreement. You can buy one online (Assured Shorthold Tenancy Agreement Template) or in some stationers like WH Smith.  A written agreement makes the details of the tenancy very clear in case of problems, and will be required in case of any court action. Letting property on verbal agreements is asking for trouble. Ideally the tenancy agreement will be signed AND witnessed. Remember to keep it safe, and scan a copy.

6. Get an Energy Performance Certificate

As of October 2008, an EPC has to be shown to a tenant BEFORE they move into a property, by law. An EPC is a grading of the property’s energy efficiency. They cost about £75, and last for ten years. Getting one is easy, and contains advice to improve the efficiency of a property. It’s advisable to replace all light bulbs with energy saving bulbs before the EPC assessor visits. Not showing the EPC to the tenant prior to them moving in may result in a fine from Trading Standards.

Get an online Energy Performance Certificate quote.

7. If tenants stop paying, act fast

When a tenant stops paying, many landlords freeze, and simply hope the tenant will pay up. Before you know it, several months have passed, and the arrears put your own financial situation at risk. To avoid this, watch rent payments like a hawk, as soon as one is late, call and write to the tenant to request payment. As soon as they miss a second monthly payment, you should issue formal eviction notices (which usually encourages tenants to pay, but if not lays the groundwork for the eviction). The eviction process is not straightforward and it’s advisable to get help from someone like Landlord Action  as soon as a tenant misses that second monthly payment. Typically an eviction (including legal and court fees) costs £700 and takes 3-6months – the quicker you get on it, the smaller the problem. Always be understanding, but also be firm.

8. Check you are insured

Many home insurance policies are invalid if a property is rented out, so check with your insurer. You also need to inform your buildings insurance provider (or freeholder if they arrange it on your behalf). If your property burns down and you are not insured, it could destroy your financial foundations, so check it. You should also get public liability insurance, so if someone is hurt in or near the building, you are likely to be covered. Insurance is boring…. unless you need to make a claim.

Get an online Landlord Insurance Quote from Melville Burbage and get online prices with a High Street Service.

9. Pick a good agent (or get trained)

Letting agents are unregulated, and sadly some are unscrupulous and will impose what some consider unreasonable charges on tenant or landlord or both, often when it’s too late to refuse. It is invariably best to use an agent who is a member of the Association of Residential Letting Agents (ARLA) as they have high standards, and agents need to be formally trained. Ask them what their fees are, including tenancy set-up fees, management fees, renewal fees, and what they charge tenants – get it in writing. If you do not use an agent, don’t DIY without some training – landlord associations and ARLA do training, as do many local councils (as part of their accreditation schemes). Property law is extensive – don’t get burnt, get trained. 10. Join a landlord association The largest UK landlord association is the National Landlord Association, which provides a regular magazine, many member benefits, a telephone helpline, and an annual conference. Membership is low cost and well worth it. The second largest UK landlord organisation is the Residential Landlords Association which offers similar benefits. Joining one gives you an insight into what a professional landlord needs to know to protect his or her finances and reduce risk of problems.

About the Author

Ollie Cornes is an experienced, professional landlord and entrepreneur. In 2002 he founded (and later sold) the Singing Pig property forum. He owns a multi-million pound portfolio of properties in and around London, and is qualified with the Association of Residential Letting Agents. His business, Juicy Property, provides online property management software and related services to landlords.

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