Problem Tenants- No problem!
June 7th, 2011
Being a landlord is not always going to be easy and there will be times when things won’t run smoothly with tenants, so what can you do?
Check, double check and check again.
Many potential problems any landlord is going to encounter stem from not doing the correct background checks at the outset. This may sound simple but it is amazing how many this is not done as many landlords are anxious to let their property as quickly as possible.
Always ensure you know the background of your tenant, their rental history, their employment situation and their credit status. Even first time tenants should be a able to provide good solid references, but don’t take these at face value; remember, you can always undertake your own background checks through companies that specialise in that area, including checking criminal records.
If all of this seems a little too much and you don’t know where to start, engage the services of a good Letting Agent who will be able to do all these checks for a small fee.
Maintain a good relationship
It is imperative that you have a great relationship with your tenant and this starts on the first day you have any dealings with them, even before they move in to your property. When you are showing them around prior to the rental, note any issues they may have and if you agree to repair or change something, ensure it is done before they move in. It is important for you to remain consistent, courteous and professional at all times.
Pre-empt any potential issues
Visit the property from time to time to check for any maintenance needs and attend to them quickly, leaving your tenants with outstanding or recurring problems can cause resentment and distrust. You can minimise the problems of damage & maintenance by using durable hard wearing materials, such as washable paint throughout, use carpets in dark colours and stain protect them, or use good quality vinyl. Speak to the neighbours; this is a great way to find out if there have been any noise or anti-social behaviour problems that can be sorted out before they get out of hand.
Keeping up to date with what is happening with your property and tenants can avoid any problems before they arise and the main thing to remember when dealing with your tenants is, to remain consistent, courteous and professional at all times.
April Sees Rents Soar
May 20th, 2011
April saw average property rentals payments rise in England and Wales to a record breaking £692 per month. LSL property services have reported a rental increase of almost 1% on March’s figures and an increase of around 4.5% on the same time last year. In monetary terms this means landlords are charging almost £30 each month more than they were last year.
As the availability of local social housing is contracting due to government spending cuts in the social housing budgets, the market for good quality private rental accommodation is expanding to fill the gap. This expansion is fantastic news for the first time landlord looking to get into the rental market, with interest rates and property prices at an all time low there has never been a better time to utilise your savings or equity in an existing property to boost your income. With up to a 15% return on your investment Happy Homes Investments can help you get your savings working for you again.
Call us today for a free consultation.
Good News for first time investors
March 15th, 2011
There has been a very interesting change of attitude by lenders in the buy-to-let market. Historically lenders have always favoured the established landlords, those with a history of buy-to-let borrowing and have build up a good sized portfolio.
Since the beginning of the year lenders have begun to change their lending patterns and started to look more favourably at the first time landlord rather than the professional landlord. Not surprisingly these new buy-to-let customers are borrowers who have large credit balances earning very little interest who have become very disillusioned with standard bank accounts and are now looking for alternative ways of getting a decent return on their investment.
With the lenders easing many of the restrictions around buy-to-let mortgages such as deposits, interest rates and other criteria thus making them more affordable and readily available, coupled with the demands on the rental market increasing month on month and rental income providing a better return on investment than your standard bank accounts there has never been a better time to become a property investor.
With up to a 15% return on your investment Happy Homes Investments can help you get your savings working for you again. Call us today for a free consultation.
Beware of the overspend.
November 10th, 2010
Overspends can happen so easily if either you or your builder haven’t put enough thought into the refurbishment budget from the get go. In fact some builders have been known to deliberately over estimate in order to increase their income from a job. Be aware of this possibility and do your sums and research so you are confident you are getting value for money.
Beware of getting emotionally involved; you’re not going to be living there. This is a business not a home. It is so easy to spend £5,000 extra on “creative luxuries” on a job and at the end discover you’ve not added a single penny to the achievable rent. What a waste.
Also think about time overruns. There is nothing that annoys tenants and letting agents more than being told a moving in date, only to find the refurbishments aren’t complete by the date you set. So the tenant is left either homeless or living on a building site.
Beware also of under spend; cheapest isn’t always the best value for money. You want that new kitchen to last 10 years otherwise you’ll have to spend more money replacing it every five years or so. Tenants don’t like living in properties that start to “fall apart” and they are likely to vote with their feet, leaving you with an empty property, no income and the mortgage to be paid. A false economy if ever there was one.
A great way to avoid many of these pitfalls is to use a quality reputable company such as www.buildingservices.com or www.buildingsolutionsmidlandsltd.co.uk
Working well with your solicitor
September 14th, 2010
In June we looked at building a relationship with the Estate Agent but perhaps more important than your relationship with the Estate Agent is your relationship with the Solicitor, don’t get me wrong, when a solicitor is working for you they are Working For YOU, but what you want to ensure is yours is the first file they pick up in the morning AND the last one they look at in the evening. If your relationship is not as strong as it could be this could lead to the following: -
Deals taking longer than they need to.
A solicitor can if they work at it get a deal through to completion within 2 weeks (Happy Homes record is 8 days)
A solicitor can also delay a deal by up to 5 months either by good negotiation for your benefit or dragging their heels to your detriment.
Deals falling through.
If a solicitor is not chasing all the parties involved it is possible for the deal to quickly sour and leave you without the property
Hampering your relationship with your letting agent.
Letting Agents like to have a firm date they can pass on to prospective tenants, if your purchase is delayed this delays everything down the line, you could risk loosing good tenants as the Letting Agent will soon find them another home.
The vendor taking an alternative offer.
If things are taking longer than expected, the Vendor rightly or wrongly could start looking at other offers being put in front of them, again this could result in you loosing the property.
There are a few easy steps to take to help you build a good relationship with your Solicitor: -
Use them as much as possible
Sit down with them at the start and outline what you are expecting from them and what they are expecting from you.
Get all the necessary forms from them in advance; this can be done before you even instruct them to work for you.
Try to get The Vendor to use a solicitor your solicitor deals with on a regular basis, this way each will know what the others requirements are and you may even be able to speak to both solicitors to move the process along (this does need the vendors permission to do this)
Use a recommended solicitor that knows the Buy to Let market, a good one Happy Homes works with and can strongly recommend is www.Fraserbrown.com
Letting Agents, what to look for.
July 1st, 2010
Once you have purchased your Buy to Let Property you need to make the decision “do you get an agent or do you go it alone.” Going it alone can be time consuming and a legal mine field if you have not got all the documents, agreements, do’s and don’ts laid out beforehand. Don’t forget this is your property that someone else has got rights over; this alone is a good enough reason to take on a Letting Agent.
So what should I look for in a good Letting Agent?
The first thing to do is take a look at what associations they are members of , the main ones to look for are ARLA (Assoc of Residential Letting Agents), NAEA (National Assoc of Estate Agents), NALS (National approved Letting Scheme), or RICS (Royal Institution of Chartered Surveyors). All these associations are bound by a code of conduct that helps protect you as their client.
What will my Letting Agent do for me?
The services a Letting Agent provides varies from agent to agent, it is always advisable to sit down with your agent and outline exactly what you want them to do, this can be as little as just finding you a tenant to fully managing the property. Having your property fully managed can save you a lot of time and energy in the future as they will carry out all the necessary inspections, report to you any problems and if agreed up front send out trades people to deal with any minor or emergency repairs without you needing to get involved.
How much will all this cost?
Fees, like services vary from agent to agent, the cheapest may not be the most economical and the most expensive may not be the best. In general a Letting Agent will charge a percentage of your monthly rental income usually around 10-15% depending on the level of service they are offering.
How to Rent out Your Home
February 26th, 2010
The property slump, recession and the phenomenon that is Buy-to Let has led to more and more accidental landlords. These are home owners who for whatever reason have decided to rent out their property rather than sell. Here are a few things they had to consider:
1] Do your maths: Do all your figures add up? Does your rental income cover all your houses outgoing costs? Don’t forget your tenants will be paying the utility bills and Council Tax.
2] Go it alone or get an Agent: letting Agents take the hassle out of renting out your property; they will find a tenant, collect the rent, arrange repairs and manage the rental from start to finish. What they will also do is charge a fee, and this can be anything from 5%-15%. Do your homework and choose a good agent not a cheap one.
3] Let your current lender know: You need your lender’s permission to rent out your property. If you do not inform them, you could be in breach of your mortgage terms and conditions. The majority of Lenders are not going to object, so what have you got to lose.
4] Know the rules: It is vital to know the rules and regulations, now you are a landlord. This may not be an investment property but you may still be liable for tax. Don’t forget you are now responsible for gas, electricity and fire regulations, Energy Performance certificates, Tenancy Deposit Scheme, etc.etc. etc.
5] Don’t forget Insurance: Your buildings insurance will be invalid as soon as you rent out your property, so this will need to be taken out as a landlord, and don’t forget to get cover if your tenants default on their rent.
Happy Investing!
2009 arrears lower than 2008
February 20th, 2010
LSL Property Services have released figures showing that rental arrears were much lower during 2009 than the previous year, despite the recession. This was totally contrary to all forecasters’ expectations that arrears would rise.
Figures show that 11.7% of rents were not paid by the due date, down from 14.5% in 2008, with 12.5% of rent remaining unpaid as at 31st December 2009 as opposed to 15.9% for the same time last year.
The expectations were that tenants would fall behind with rent as the recession took hold and people lost their jobs, but with the unemployment figures not reaching the levels many analysts anticipated, and landlords and letting agents keeping a close eye on rents, problems have been spotted early and dealt with promptly.
Happy Investing!
Terraced houses are a hit with landlords
February 2nd, 2010
Research carried out by Paragon Mortgages shows that 10% of professional landlords plan to expand their property portfolio during the first three months of 2010. When asked what type of property they would be looking for, terraced property was by far the most popular choice.
Almost 66% of those surveyed said that a terraced property would be their first choice, with semi-detached properties coming in second but way down their priority list, bringing up the rear were flats and detached houses.
Terraced houses have for many, many years been the property of choice for most professional landlords as they are usually sited in good solid rental area’s most are very well built and can offer a good base for refurbishment, priced reasonably they offer the landlord a good Return on Investment and are well liked by a wide range of tenant types.
Happy investing!
Recovery in the Buy-to-Let market
January 20th, 2010
LSL property services, owners of Your Move and Reeds Rains reported that buy-to-let landlords enjoyed a 7.6% annual return in 2009.
Landlords saw their properties rise in value 3% and their rental income a further 4.6%. This is a great improvement on the 8.8% loss suffered by property investors in 2008, due mainly to a £23000 depreciation in the value of their property along with a lower rental income.
David Brown, the Commercial Director for LSL, attributes the rebound to the reduction in available rental properties created when many buy to let landlords put their properties on the market during the first signs of a recovery over the summer.
Happy investing!