If you’re lucky enough to be mortgage free on your property and it’s a Freehold property then skip this step, if not, read on:
Mortgage?
If you have a residential mortgage you’ll need to ensure you have ‘Consent to Let’ from your lender before tenants move in. Contact your lender to see how to make the switch. It varies but will almost always involve a cost.
Renting while on a residential mortgage without a consent to let will be breaking the terms of your loan and could land you in hot water. For example your lender could retract the loan immediately, so it’s best to get this sorted upfront.
Leasehold property?
If you have a leasehold property, check the lease, as many leaseholds don’t permit sub-letting (you’d effectively be sub-letting if you let a leasehold property).
Shared ownership?
If you purchased your property as part of a shared ownership scheme you should check with the housing association and any other parties involved what the deal is with letting.
The government has tightened up the laws for landlords with a view to improving the tenant’s position from a safety and financial perspective. So as a landlord you’ll need to jump through several hoops. Failing to do so could be a catastrophe for you and potentially your tenants. Do not cut corners here.
Decorating a rental property is a lot different than decorating your own home. Whilst home renovation projects are a way to unleash your individuality and create your own style, when decorating a rental you’re trying to create something that suits anyone, whilst also being hardwearing and cost effective. Getting it right can be something of a balancing act.
Remember achieving the best price for your rental equals the highest price in the shortest time. The time your property is empty is extremely costly when calculated as a loss across the year. Our recent research shows that slicker properties can expect about £50 more per week in rent over an average one. That’s £2600 per year. Not just that, the quicker speed in which they let reduces costly void periods and adds value to your property. No brainer.
The last few years have had an impact on the lettings industry and, generally, how renters view prospective places to live. Pre 2020 tenants would be relaxed about the property layout and type, and hyper sensitive to finish, cleanliness and of course location. Location has taken a bit of a backseat due to the new working from home possibilities, whereas a property’s layout has become a priority due to a need for home working space and a higher desire for some type of outside space. Many people bought ‘lockdown pets’ in that time and so we see more and more prospective tenants with animals than ever before.
Professional sharers
Primary concern is proximity to the action (restaurants, cafes and bars) and transport links (preferably tube) for their commute. Equal sized bedrooms are a bonus (as they often split the rent equally), as are good storage space and tidy communal areas.
Couples
Location is still important but generally a slick pad to have dinner parties at is preferred if push comes to shove. Multiple bedrooms are great for the parents to stay over at and for potential nurseries. creating even a small area that a desk could be situated will be more enticing. Post Covid outside space has become more desirable.
Families
Distance from good schools and nurseries is paramount. Bigger or useful outdoor spaces and of course quieter locations are preferable. Don’t overlook a good finish for this group.
Corporate Tenants
A corporate tenancy is normally whereby your tenant will be a Company rather than an individual. In some cases, the individual will be the tenant and the company will pay for the rent. Some of our clients prefer a Corporate tenant set up as they tend to have larger monthly spends and commit to tenancies of 3 years or more. If you would like Moveli to secure a Corporate tenant, your property should be presented to a very high standard throughout.
There are a myriad of factors to consider that will affect the value of your rental. Not least, how many bedrooms, the size, location, finish and the market conditions. But with a rental that’s not the only thing to consider. Timing is vital.
Price
Swot up on properties like yours on Rightmove and Zoopla, that are currently on the market. Unlike sold property data that’s provided by the Land Registry there’s no list of actual let prices to hand for a comparison. Instead you have only the asking prices to rely on. This can be misleading because not all property lets for the asking price. Some will let for more, some for less. Put yourself in the shoes of your potential tenants and consider all the options available to you in the current market. Then get an expert around for their opinion.
Timing
Once you have your price consider how quickly you want it let. One of the biggest traps landlords fall into is pricing their property too high, or holding out for a high price. Ideally you want the smallest time period possible during which your property is unoccupied by paying tenants, otherwise known as your void period.
The highest value achieved for a rental is the highest price achieved in the shortest time. It’s a two way variable. Consider that every week your property is void is potential income coming off your total yield across the year. This ads up terrifyingly quickly. Every week void equates to about 2% off your asking price. 10 weeks void and you’d have done better letting immediately at 20% below your asking price!
Getting the price you want is only half the story. Ideally you want to find a great set of reliable, trustworthy and friendly tenants who will look after your home properly. Of course it’s a minefield out there, and not everyone is what they seem. Generally speaking though, the majority of tenants are good people especially if you treat them right from the start. However following these tips can help you make the best choice.
The Bad - Complaints
As a landlord, you’re essentially a business owner which means it’s important to remain professional in all of your interactions. Regardless of what a tenant is complaining about, or if it’s the neighbours complaining, you shouldn’t change the manner in which you respond to the complaint. Being understanding, calm and professional will have a huge impact on your ability to successfully resolve the issue. Make sure you’re accessible, respond to any complaints promptly, show genuine concern without being dismissive and most of all, be patient. Communication should always be your first port of call with any complaint and in most cases can resolve any issue.
The Ugly - Removing Tenants
This can be an unpleasant experience for all parties involved, however if all else fails with unruly tenants then it’s time to involve legal action. Give your tenants a Section 21 notice if you want the property back after a fixed-term ends (may be removed in coming legislation). Give them a Section 8 notice if they’ve broken the terms of the tenancy. Notices can vary from 2 weeks to 2 months depending on the terms of the tenancy agreement. However, in general, you will have to give a 2 months-notice, but there are exceptions (e.g. if the tenant has been in the property for under 6 months or if the property is an HMO without a license.)
Back in the bad old days the landlord would take and hold the deposit themselves returning it how they saw fit. Of course this led to all kinds of arguments, and of course tenants witholding rent as a protection from rogue landlords.
These days things are much better. As a landlord, you must put your deposit in a government-backed Tenancy Deposit Scheme (TDP) if you rent your home on an Assured Shorthold Tenancy (AST). Letting agencies are registered with these schemes and can do it for you. Alternatively you can register yourself as a landlord and go through the process.
Did you know
If you don’t rent your home on an Assured Shorthold Tenancy (AST), your landlord can accept valuable items (for example a car or watch) as a deposit instead of money. The items won’t be protected by a scheme. There are separate TDP schemes in Scotland and Northern Ireland.
Approved Schemes: Deposit Protection Service, MyDeposits, Tenancy Deposit Scheme
The basics
1) You or the letting agent must put the deposit in the scheme within 30 days of getting it.
2) You must return the deposit within 10 days of you both agreeing how much the tenant will get back.
3) If you’re in a dispute with your tenant, the deposit will be protected in the TDP scheme until the issue is resolved.
Any profit you make from renting your property is taxable income. You pay tax on it based on your current tax rate (20%, 40% or 45%).
Income tax on rentals
You must contact HMRC if your income from property rental is between £1,000 and £2,500 a year and you must complete a Self Assessment tax return if your income is between £2,500 and £9,999 after allowable expenses (or £10,000 or more before allowable expenses).
Allowable expenses
Revenue expenses relate to the day-to-day running and maintenance of the property and can be offset against an income tax bill. Costs that are deemed to be essential to you performing your duties as a landlord can be offset against your rental income, significantly reducing your tax liability. Such as:
- Letting agents’ fees
- Legal fees for a year or less, or for renewing a lease for less than 50 years
- Accountants’ fees
- Buildings and contents insurance
- Part of the interest on any property loans
- Money spent on maintenance & repairs
- Utility bills
- Rent, ground rent and service charges
- Council tax bills
- Any services you pay for, such as cleaning and gardening
- Phone calls, advertising or stationery
- Applicable mileage
- Landlord courses
Lettings Experts - One Point of Contact
Our lettings agents are among some of the best in the business with decades of experience backing them up. We offer a one point of contact and bespoke personal service to our clients. Your agent is with you throughout the entire process, giving you the right advice when it is needed most.
High Quality Tenants
We don't just negotiate the highest price for your let, we also ensure that the tenants we place are the highest of quality. The lettings landscape is a minefield. With over 350 years collective agency experience we have come to know the red flags to listen out for when talking to tenants. Not only that but we screen them as well just to be safe. Good tenants are as valuable to us as to you.
Maximum exposure
We’ll market your let to the largest audience possible, across all the major portals including Rightmove, Zoopla, Prime Location and On The Market as well as a host of affiliate sites, social media and our extensive network of corporate re-location agents. Some of the best tenants are secured through these networks that we have built up over decades.
Fully Compliant
Lettings is a highly regulated industry with new legislation coming out on a regular basis. Falling foul to any of these regulations at best can put you out of pocket, at worst can be a full blown legal battle or worse. At Moveli we are fully compliant with all the regulations and advise our landlords as soon as they change as well as acting accordingly. You can rest easy when you let with us.
More information on our Lettings Services:
