A while ago I spilled my woes about the trouble I was having buying my house. That finally worked out, but I’m still having trouble selling my flat. Long story short – the freeholder has gone AWOL and without the details of his legal representative my buyer’s lender is refusing to release her mortgage. So …
If I can’t sell it (for now), and I’m not living in it the options are to leave it empty or rent it so at least I’m getting some income from it. It’s new territory for me and I never wanted to be a landlord. If that’s the way it has to be I intend to use an agency and be as hands off as possible, even though that will mean I see less of the rental income.
I’m sure there are more experienced heads than mine on here. Any tips of what to do or avoid?
Not a landlord myself so all I can offer is as an observer of what my late brother needed to do before letting his house after downsizing.
Get the electrics/gas etc. checked and certified* before you start and ensure decorations, carpets, windows, locks etc. are in good condition too.
Use a reputable local letting agent** and keep an eye on how they perform for a while afterward. Be realistic about what rent you can charge but don’t automatically accept the agent’s first suggestion. Compare against similar properties with other agencies.
* By established local firms with a solid reputation.
** Sign up for quarterly property checks and make sure they actually do them***. Some agents can be pretty slapdash on this if you’re not paying attention. Ensure any necessary repairs in the course of the contract are done by competent people to a decent standard.
***Photos and a short written report each time.
Thanks Mike, all sound advice. Tbh I was selling the flat as a bit of a doer-upper (priced about 10% less than others in the block in recognition), so I was just doing to paint everything magnolia and make it as bland as possible. The other stuff was already carried out for the sale, and I will likely use the same firm which marketed it for sale. It wasn’t their fault that it may not be sold at all.
It did strike me, after I’d posted, that a bit of the stuff I mentioned would probably have been done before you tried to sell it.
Magnolia-isation is a sound move. People’s ideas of good decor can vary widely.
It doesn’t need to be a palace but everything needs to be in decent working order. My brother tried to be a cheapskate and couldn’t get a tenant until a few things he’d skimped on were put right. CH boiler replacement was the most expensive thing. The cooker (reconditioned s/h) and the bedroom carpet less so.
I have been a landlord a few times. My advice is to get an agency to deal with all the day to day stuff and have potential renters thoroughly vetted.
We rented our house out when we lived abroad. The agency was recommended but they were pretty useless. Lesson learned – have a very clear and specific set of things they are supposed to do which are easy to check. They then handed the deposit back to the renter before we approved it and we found damage which they should have sorted out and showed no interest in doing so. Fortunately I had the free legal advice policy you sometimes see as an extra on your insurance. They sent a bracing letter to the agents who snapped to attention and sorted out the damage. Lesson learned – be ready to take a firm line if they take the Michael.
Mrs Moles has rented out her parents house for the last five or so years. Assume that the agency will be useless, no matter how good they seem when they want your business. Vetting and guarantors are essential, and as you can visit the property easily I would arrange with the agency to visit every quarter to check as @twang says for yourself. And absolutely a week before anyone moves out. An inventory and don’t forget the garden – by far the worst damage the tenants did who have just vacated was to the back garden. They added some awful decking and sheds which they just left . And take photos the day before they move it. Tempting though it is to spend all the income, keep some for restoring the house back to magnolia after tenants move out. Mrs Moles is now doing exactly this before it goes on the market for sale.
We have a buy to let cottage and rent it out via the Open Rent service.
They do all of the searches for tenants and references and deal with collecting the rent but you need to do the viewing of the property with potential tenants and decide who to let it to.
Once let they collect the rent and deal with the deposit etc. They charge £10 a month for the rent collection and you get the money into your account the day after it is paid to them. The contract for the rent collection is between them and the tenant.
I think the up front cost is about £50 which includes all the advertising on major websites and the referencing.
http://www.openrent.co.uk
I am a reluctant landlord. I rent where I live, and love being here, but recognised that I needed to have the financial ballast of owning somewhere. It was the right thing to do, and I am better off for that decision, but I hate being a landlord. What has been said above; use an agent to ensure proper vetting of tenants and regular periodic checks, and to advise you on your obligations, of which there are plenty; make sure the property is properly maintained and presented, as your tenants are more likely to respect you and your property if you have done so.
Financial ballast.
That is a nice change from equity in a financial term.
Keeps the ship steady as she goes.
Another reluctant landlord here… I second all of the comments already made, but one thing I’d add is to have an inspection done first to confirm your property is “up to code”. I recently had to have my fuse box updated and all my metal light switches and light fittings replaced with plastic ones. That kind of work alongside the cost of gas & electricity certifications and trivial stuff like that might not be viable for just a few months rent… oh yes, make sure you include agency fees and the price of any work/repairs in your income tax return!
Thanks everyone (and in advance for any further advice). It sounds like the key is not to overcomplicate it, make the place safe and presentable, and make sure any agent I use is doing the work on my behalf and earning their commission.
Another very useful tip.
To keep your tenants happy (and your property in good order) you will need the services of reliable tradesfolk, and you may need them urgently. They are much more likely to look on your favourably if you pay them on the day that you receive their invoice.
If they send the bill to my phone it’s always been my policy to have them paid by the time they’re back in their van.
Late to the party, but I’m a landlord several times over. My main advice is to make a decision early on as to whether you will manage the property or get someone else to manage it. I have tried both ways, and the former can be very time consuming, especially if you have troublesome tenants. With the latter, you need to make sure the agent is on their game, and hold them to account for inspecting and managing your property.
A few other points:
– The fundamental thing you have to accept is that tenants will never treat your property with the same care you would. Expect it to get trashed and be pleasantly surprised if it isn’t. Walls, paint, carpets, flooring, fittings etc. will take a beating.
– Depending on the type of property, you may want to exclude tenants with dogs. Dogs can do a lot of damage to wooden floors, gardens, carpets etc. We now do not allow them in any property by default. They have cost us many thousands over the years.
– Never be tempted to enter into a mates-rates rental agreement without a contract.
– This one will be very controversial, but be VERY cautious of renting to struggle-street tenants with even a whiff of drug/alcohol/violence in their histories. We have been very badly burned EVERY SINGLE TIME we have shown compassion and tried to help someone out. Previous rental history is very important.
– The other side of this is to look after good tenants who look after your property. When we find them, we keep rents low and are really responsive to any issues they have.
Some of this may sound a bit mean, but over here in Queensland the ball is very much in the tenant’s court, regardless of the recent media bias against landlords. We have been in the most ludicrous situations with very little recourse, and this imbalance is well understood by a certain subset of tenants who know how to exploit it.