I have seen so many experienced landlords make simple mistakes which cause them personal strife throughout the tenancy, here are my top 5 tips to make the process smoother for all involved;
1. Expect the unexpected – always have a slush fund
When you rent out a property, things will break, and when those things break, I’m afraid its highly likely, as a landlord, you will have to fix them. If you don’t start off your ‘landlording life’ with a small pot available to use for potential repairs, then I suggest you get one, fast. The easiest way to do this is to place at-least £50 from any rent you receive into a separate account each month in case repairs are needed. If after a year, you haven’t used any of it, brilliant, you can go shopping! But if you do this and at 6pm on Christmas Eve your tenants oven goes kaput, you will have the funds available to replace it quickly, without any of the stress of “I have to fix this but how am I going to pay for it, I’ve spent all my money on Christmas presents!?” entering your mind.
2. Gas Safeties – they have to be done
Gas Safety Regulations are one of the most important piece of legislation when it comes to Lettings. The Gas Safety Installation and Use Regulations 1998 state that a landlord has 3 main responsibilities when it comes to renting out a property;
a) Maintenance: pipework, appliances and chimney/flues need to be maintained safely
b) An annual Gas Safety Check is conducted on every gas appliance and flue
c) A record of the annual check is provided to your tenants before a tenancy begins and within 28 days of the check taking place.
If you manage the property yourself, you will be responsible for upholding all of this. If you let through an agent, they should be totally clued up on this and will not let up until a registered Gas Safe engineer has been to the property and they have a copy of a shiny new certificate in their hands. If you self-manage, the moment that Gas Safety becomes expired, if your tenants were to become harmed or worst case perish due to a gas defect, you will be in the dock defending a manslaughter charge. Expect your agent to contact you 8-6 weeks before the expiry date, to instruct without your authorisation if you don’t get back to them and if you have the certificate, they will hound you to get a copy off you before it expires.
3. If your agent does a great Rent Guarantee Scheme – take it!
One of the biggest mistakes I see landlords making is to do with not having rent protection. This causes so much frustration and worry for the average landlord and is easily avoidable.
A really good example of this is Mr Smith; Mr Smith let his property through an agent, his mortgage repayments due on the 5th of each month are £485.00 and his rent, due on the 1st of each month was £510pcm. Unfortunately, although against the terms of their tenancy, his tenants occasionally paid their rent late. This meant that once his rent was received by the agent on the 1st and then paid out to the landlord (BACS payments generally taking 3 days) Mr Smith received his rent on the 4th of each month and spent the beginning of every month having a minor panic attack that his mortgage wouldn’t get paid.
Some agents provide fantastic ‘Rental guarantee’ schemes where you pay slightly more per month but your rent is guaranteed in your account, whether your tenant pays or not, on a certain date in the month, every month. CGT Lettings Ltd provide a scheme where landlords can pay an extra £15.00 a month on top of their normal management fees (£25 if the rent is over £1000 pcm) and they are guaranteed to receive their rent every month on the same date. This also includes legal assistance and payment for legal fees should the landlord need to go to court for possession due to arrears. This monthly grand total of £180.00 a year can stop you having to worry each month about not receiving your rent plus take away the fear of having to spend thousands of pounds gaining possession of your property and chasing unpaid rent. Tenants are generally good people and will pay their rent each month in full as they are contracted to do, but who would want the worry that they might not one day? In the case of poor Mr Smith above, his tenants lost their job and fell into rent arrears as they could no longer pay their rent. Mr Smith didn’t have a rental guarantee so he had to pay for a solicitor to start possession proceedings with a Section 8 notice and then when his tenants failed to vacate, pay his solicitor to go back to court to obtain a bailiff warrant. When he added up all the solicitor’s fees and court costs along with the unpaid rent he was owed, he had spent £3,557 going through the whole sorry rigmarole of gaining possession of his own property.
Why Mr Smith hadn’t snatched his agents hand off when she had offered him the rent guarantee service, I’ll never know. Mr Smith doesn’t know either.
4. If you lived in the property – your tenants won’t be as good as you. Fact.
Landlords who have an emotional attachment to a property, often those who have lived there previously, will find it the most difficult when their tenants aren’t looking after the property like they think they should. The simple fact is that during a tenancy, a tenant has the ‘right to quiet enjoyment’ of the premises and although they shouldn’t be doing anything overtly damaging to the property, you cannot really hold them to anything until they vacate. I have experienced landlords attend properties and explain to the tenants that the windows had not been cleaned with the correct cleaning fluid, and landlords who have given detailed instructions to their tenants on the best way to clean their kitchen floor. Unfortunately, you cannot comment on how a tenant lives in a property until they vacate unless it is causing significant damage or breaking the law. Once a tenant vacates, if they have not returned the property in the same condition it was (allowing for fair wear and tear), then you can claim the costs to put it back to how it was from their deposit.
5. You can increase the rent (sometimes)
Often landlords will let their property as quickly as possible and will accept a lower rent than they initally wanted in order to get it swiftly tenanted. Many landlords then become frustrated that they are receiving a lower rent than they require which eventually might cause the landlord to serve notice to their tenants. My advice with this is to initially request a 6-month tenancy, once the fixed term has come to an end and the tenancy has rolled onto a month-to-month ‘periodic’ basis, you can then issue a Section 13 notice providing your tenants with one months’ notice in line with their rental due dates that their rent will be increased. Be aware that you can only increase the rent every 12 months using this particular notice. Another option is you can also negotiate a rent increase in a further fixed term agreement with your tenant, the benefits of this are your tenants are guaranteed their home at the same rent for a further 12 months, and you can expect a rental income you are happier with for a further fixed term. Most agents will conduct regular rent reviews and issue Section 13 notices as standard, however many self-managing landlords are unaware of these options. You don’t have to stick to the same rent amount you first accepted and you don’t have to ask your tenant to leave to obtain a higher rent but you probably want an agent to serve these documents on your behalf.
Angharad Trueman - Operations Manager