Renting your property

[BargeeSpud]

Hiya,

 

Well, with a bit of luck, we'll be moving onto Tilly within the next few weeks. Once aboard we will be deciding what to do with all the equity we will have released & as we don't want to give up owning a property entirely, we are thinking of getting a buy to let property. Naturally, we'll be trawling the letting agents etc. & getting as much info as possible so that we can make an informed decision on what to buy to maximise our investment & future living needs.

 

So my questions are aimed at those of you who have & are already doing the same. Your experiences & suggestions are most welcome to cut through some of the rubbish I'm bound to encounter during my research.

 

 

What market have you rented to, student, council, private, other?

 

Furnished or unfurnished?

 

What difficulties did you encounter when you initially set out to rent your property?

 

Anything I need to be aware of regarding legal implications, costs, expenses, tax etc.?

 

Anything further I need to know about?

 

 

Your tales & experiences, both good & bad, will be most useful, so let me have it with both barrels!

 

Cheers.

 

[Athy]

We have two rental properties, a house and a flat.

- They are in a town about 25 miles away (do NOT rent one out near your home or the tenants may turn up and knock at your door each time a tap drips).

- They are in the hands of a property agent who is an established and respected estate agent in that town (Thetford). They take a straight 10% of the rent, no hidden extras, except if a tradesman carries out necessary work, which they deduct from our rent at cost price.

- The agent sends us a breakdown of income and expenditure each year, along with receipts from those tradesmen. You will need this for the taxman. They also interview, take references for, and select tenants (to ensure, for example, that no unempoyed people take up residence), but they keep us informed as to who wil be moving in.

- The properties bring in 4% to 5% net per annum, based on the price we paid for them. This is better than you'll get from most (all?) banks and building societies at the moment.

- You can (and should) get special landlord insurance.

- You should preferably rent unfurnished, though you may choose to leave semi-permanent items such as a cooker in place.

- We started renting by accident, when we'd bought a new house but the old one hadn't sold yet so we rented it out to a couple we knew. We have never regretted doing so.

[MtB]

Hiya,

 

Well, with a bit of luck, we'll be moving onto Tilly within the next few weeks. Once aboard we will be deciding what to do with all the equity we will have released & as we don't want to give up owning a property entirely, we are thinking of getting a buy to let property. Naturally, we'll be trawling the letting agents etc. & getting as much info as possible so that we can make an informed decision on what to buy to maximise our investment & future living needs.

 

So my questions are aimed at those of you who have & are already doing the same. Your experiences & suggestions are most welcome to cut through some of the rubbish I'm bound to encounter during my research.

 

 

What market have you rented to, student, council, private, other?

 

Furnished or unfurnished?

 

What difficulties did you encounter when you initially set out to rent your property?

 

Anything I need to be aware of regarding legal implications, costs, expenses, tax etc.?

 

Anything further I need to know about?

 

 

Your tales & experiences, both good & bad, will be most useful, so let me have it with both barrels!

 

Cheers.

 

 

My advice, for an easy life as a landlord, would be as follows:

 

1) Buy freehold house(s) not flats. This avoids a raft of occasional but sometime substantial admin and maintenance costs you have no control over.

 

2) Buy property less than 30 years old, for minimum maintenance costs.

 

3) Avoid buying new property. It always carries a 'new build' premium which you lose, just like a new car.

 

4) Avoid the student market unless you are prepared for a lot of admin and wear and tear on the property in return for the higher rent you'll get.

 

5) Avoid anyone relying on benefits to pay their rent. If/when their benefits claim goes wrong, they can't pay the rent. Not always their fault but you get to 'carry the can'.

 

6) Avoid tenants with children. This usually means mum at home all day and heavy wear and tear on the house.

 

7) Young 'professionals', singletons or couples, make the best (i.e. easiest to manage) tenants in my experience. They also wear out the walls, carpets, washing machine etc the least!

 

8) Use a letting agent to start with, but pay attention to what they do. It's easy to copy. Once you know the business use agents to find tenants, but the main reason to use their monthly management is for access to their tradespeople for repairs. If you DIY or have your own contacts, monthly management is a waste of money IMO.

 

9) Buy close by if you decide to self-manage. Better to drive 2 miles each way to mend the broken WC than 25 miles.

 

Hope that helps,

 

MtB

[Biggles]

I am a professional landlord with a number of rentals.

 

All I can say in 30 years of letting is it's not about property, it's about people. So long as everything is going right for the tenant then generally things are fine, but any number of things can go wrong example, lose job, benefits, partner, falling off the waggon, stop taking medication, illness, row with a neighbour, incarceration etc Then in a very short time it can go massively wrong.

 

But most of the time its fine. Get a good agent and don't let them get tardy.

[steelaway]

I am a professional landlord with a number of rentals.

 

All I can say in 30 years of letting is it's not about property, it's about people. So long as everything is going right for the tenant then generally things are fine, but any number of things can go wrong example, lose job, benefits, partner, falling off the waggon, stop taking medication, illness, row with a neighbour, incarceration etc Then in a very short time it can go massively wrong.

 

But most of the time its fine. Get a good agent and don't let them get tardy.

 

Hi

 

All of the above - and include dieing and drug addicts.

Don't go for expensive homes with a view to getting better clients, even 'up market' tenants can be just as bad as the ones on benefits. Expect them all to give you some problems, there is no such thing as 'easy money'.

Buy cheap, sound, houses to maximise the returns and collect the rent yourself. It gives you the opportunity to check out the property once a month and you will create a personal involvement when there are problems.

Open another bank account to keep a check on income and outgoings for your accounts. Not a business account one - you will get charged. Your name @No2

Always take two months rent up front to cover for the damage when they move out. Not a bond - there are legal requirements to keep a bond in a special account.

If the tenant is on housing benefits then try and 'persuade' them to have the housing benefit paid directly to you. They can sign a waiver to that effect

You will also have to have a annual gas safety check.

 

Alex

[MtB]

As you are probably beginning detect, there are as many approaches and as much misinformation about being a landlord as there is about boating!

 

MtB

[sueb]

We let rooms in our house and keep one room for ourselves. Even if one fails with the rent the others pay the bills. We have mainly young Indian IT professionals. They are great fun and tolerate us.

[cheshire~rose]

There has already been a lot said that I agree with mostly.

 

We have 3 properties. One is the flat I used to live in which I decided to rent out rather than sell. It is a former council flat and so although it does have a leasehold the fee I pay each year is around £125 and that included my buildings insurance. In the first year of owning the flat they painted the outside (bin store doors etc) and the second year they cleared the guttering. Although flats do have additional fees theyare often extremely good value for money when the local authority holds the freehold.

 

On the basis of the good experience I have had with that flat we decided to buy another closer to where we live so we could rent it out until we retire when we wil move into it during the winter and cruise during the summer. We ended up buying two flats. One of those is currently having cavity wall insulation fitted, brickwork repointed, new UPVC fascia's and guttering. All of these are being done by the freeholder at no cost to us. The maintenace fee is £100 a year! Don't disregard flats - just make sure you know the costs involved

 

My experience is to ensure you buy a property that delights. If you love it when you walk in so will a tenant and it is better to have several tenants that want your property so you can choose the best one than have to make so with the only one who might be willing to put up with it.

 

Decorate in neutral colours, unfurnished and have a walk around a car boot to buy a few cheap things to dress the rooms with. A couple of modern pictures on the walls, a vase on a windowsill etc. Curtains from car boots or charity shops too. It cost me just £10 to buy the furnishings and dressings for one of my flats and the tennant liked my stuff so much they kept in on display while they lived there.

 

Ask locally for recommendations on letting agent. My biggest problem has been due to an inefficient letting agent. I dropped them like a stone but I am still having to chase them to do stuff 3 months after a tenant moved out.

[David Mack]

 

Always take two months rent up front to cover for the damage when they move out. Not a bond - there are legal requirements to keep a bond in a special account.

 

 

But isn't that a bond by another name, and subject to the same legal requirements?

[MtB]

 

But isn't that a bond by another name, and subject to the same legal requirements?

 

Yes it is, and there is no legal requirement to keep it in a 'special account'. The legal requirement is to 'protect' the bond using an 'approved scheme'. Some schemes require the money to be passed to them but not all.

 

A court will say multiple months rent in advance amounts to a bond. Failing to protect the bond and provide the tenant with protection information in the correct format by the deadline leaves the landlord unable to enforce the terms of the tenancy, and liable to pay compensation to the tenant, so dicking around calling it rent in advance to circumvent the bond protection rules is playing with fire.

 

MtB

Furnished or unfurnished?

 

Unfurnished, ALWAYS!

 

Avoids the inevitable "I'd like to rent the house but we don't need the wardrobe or the beds, can you take them out please?" questions. Then the next tenant wants a bed and wardrobe, but not the table and chairs.... and they have their own sofa... and you turn into a removal and storage service

 

MtB

[Athy]

Surely that rent in advance is called a deposit. I haven't heard it saying "My name is Bond".

[BargeeSpud]

Thanks for all the responses so far. At this rate, I reckon there'll be enough by the end of the weekend for me to have to print it all off so that I can take it all in properly!

 

 

Once I've digested it all, I will probably have more questions, so bear with me please.

[Victor Vectis]

A former tenant writes.........................

 

Whatever you decide please remember that the 'property' you rent out might be a money making vehicle to you but it will be home to whoever lives there.

 

If the tenants decide to smoke, get a cat, drop on the dole etc. then that's their business, as long as they pay the rent.

 

SAM

Ryde

IOW

[Athy]

I had no idea that there were so many landlords/ ladies in our membership. I haven't noticed any boats called Rachman cruising around yet.

[fudd]

I have a cottage that I rent out to a mate. It's at the bottom of my garden. It was stables but I converted it for my now deceased ex mother in law. My lodger has never missed a beat. Always pays straight away, reminds me if I forget and never causes me any problems at all. I'm now going through the motions to rent out the main house. I'm dreading it really. It's a Victorian place. I have done a full restoration on it over the years. The only thing that I haven't replaced is the brickwork. Everything is new but all to the original pattern so to speak. I love that house but since I got the boat bug and live on one now I just can't be bothered with it anymore. Shame on me. I'm not looking forward to have a family move in and possibly trash it though. It cost an absolute fortune to do up. Oh well, we'll see how it goes.

Edited August 30, 2013 by fudd

[Athy]

Then go through a property agent and greatly reduce the risk of anyone "trashing" it - or if they do damage it, they will have either to make good/ pay for the damage or move out. The professionals are used to dealing with such eventualities.

[junior]

- They are in the hands of a property agent who is an established and respected estate agent in that town (Thetford).

 

Are your tennants from Portugal by any chance?

 

Useless peice of infomation, my ex-boss used to call himself The Sheriff of Thetford.

[Odana]

Agents can make life easy. But keep an eye on them and make sure they know they can't slack off. I had an agent give back deposit on my house when tenants had left it in a grim state (think half-painted walls and carpets, and a full fridge freezer with the power switched off). I only discovered when I popped up to have a look when it had been empty or longer than I expected! No wonder no one was taking it!! Don't underestimate the costs of unexpected repairs and of gaps between tenants - can eat into your income something horrid.

 

I swapped my house for a boat soon as it came out of negative equity. Then saw the bloody thing quadruple in value in a year. Still faffing about thinking about another investment property like you. But buying the boat was till the best thing I ever did. You've got hat bit sorted!

[MtB]

I have a cottage that I rent out to a mate. It's at the bottom of my garden. It was stables but I converted it for my now deceased ex mother in law. My lodger has never missed a beat. Always pays straight away, reminds me if I forget and never causes me any problems at all. I'm now going through the motions to rent out the main house. I'm dreading it really. It's a Victorian place. I have done a full restoration on it over the years. The only thing that I haven't replaced is the brickwork. Everything is new but all to the original pattern so to speak. I love that house but since I got the boat bug and live on one now I just can't be bothered with it anymore. Shame on me. I'm not looking forward to have a family move in and possibly trash it though. It cost an absolute fortune to do up. Oh well, we'll see how it goes.

 

In that case I recommend you avoid using an agent. Their interest is just to get anyone into it, good or bad, so they can collect their commission. I suggest advertising it privately, doing your own viewings, so you can get to meet and know all potential applicants.

 

Don't accept the first person who says 'yes I'll take it', wait until you find someone you feel good about, who you trust to look after the place. Then start doing some investigation of their history, track record etc. PM me if you'd like to know my method of tenant assessment if you decide to go without an agent..

 

MtB

[sueb]

This is another of the advantages of letting rooms. You soon get a phone call if all is not well with one of the other occupants.

[Athy]

 

Are your tennants from Portugal by any chance?

 

Useless peice of infomation, my ex-boss used to call himself The Sheriff of Thetford.

Oddly enough, the new lady tenant who moved into the flat last week is indeed Portuguese. How did you know?

 

MTB, I have to say, touching wood, that that is not our experience of Hudson's in Thetford. They don't just install tenants willy-nilly, they exercise careful quality control, for example by asking for employers' and bank references.

[lynalldisocvery]

All i would say is whilst it costs money, going though an agent is good in my eyes as while people may stiff you up as a person they are less likely to do so with a company as their credit will then be stuffed for the future.

Ours was 10 percent, i beat them up last year and got it down to 7 percent.

Last few years, single bloke, copper and a fireman, mother and three kids, now single mother with one kid and a cat all have been perfect.

New bathroom, kitchen, carpets, all paint, etc etc, only thing wrong has been the upstairs loo flush and thats it in several years.

 

 

Lynall

[Athy]

, going though an agent is good in my eyes as while people may stiff you up as a person they are less likely to do so with a company as their credit will then be stuffed for the future.

Ours was 10 percent, i beat them up last year and got it down to 7 percent.

 

 

Lynall

Your command of professional terminology does you credit.

 

Not sure which profession, though.

[MtB]

Oddly enough, the new lady tenant who moved into the flat last week is indeed Portuguese. How did you know?

 

MTB, I have to say, touching wood, that that is not our experience of Hudson's in Thetford. They don't just install tenants willy-nilly, they exercise careful quality control, for example by asking for employers' and bank references.

 

This is better than outsourcing tenant referencing to external tenant referencing services such as LetSure in my view, but it still reduces assessment to a box ticking exercise, which de-personalises the process and lets the odd scally slip through the net. I very much prefer to meet my prospective tenants face to face and see if I actually like them as a person. Once you are on first name terms with your tenants and you have a mutual regard for each other, things generally run very smoothly in my personal experience.

 

I meet a lot of landlords and tenants in my work too, and tenants sometimes express a shockingly poor opinion of their landlords when an agency stands between them and they've never met them. Equally I've heard some pretty disgusting attitudes expressed by landlords towards their tenants. It's a cliché but true, it's people business and getting to know your tenants personally pays off big time in the long run in my experience.

 

MtB

[Tuscan]

This is better than outsourcing tenant referencing to external tenant referencing services such as LetSure in my view, but it still reduces assessment to a box ticking exercise, which de-personalises the process and lets the odd scally slip through the net. I very much prefer to meet my prospective tenants face to face and see if I actually like them as a person. Once you are on first name terms with your tenants and you have a mutual regard for each other, things generally run very smoothly in my personal experience.

 

I meet a lot of landlords and tenants in my work too, and tenants sometimes express a shockingly poor opinion of their landlords when an agency stands between them and they've never met them. Equally I've heard some pretty disgusting attitudes expressed by landlords towards their tenants. It's a cliché but true, it's people business and getting to know your tenants personally pays off big time in the long run in my experience.

 

MtB

We are just about to buy a new house and rent out having sold our house that we rent out through an agency as a holiday home. I intend to follow your process even if we then use an agent to manage.