We have been established for 17 years, serving landlords and tenants in the Cheadle area and across Stockport generally and take enormous pride in our reputation for looking after our clients. During those years running a letting and property management agency, there’s not much we haven’t seen or experienced!
So in this guide, we wanted to share 10 things that every new, aspiring and even established landlord, regardless of the size of their portfolio, probably needs to know.
Choose your agent very carefully
This might sound like stating the obvious! However, it is probably your biggest and most important decision. Look at the agent’s track record and ask maybe to speak with landlords they work with or check reviews. Don’t be shy about asking what qualifications they have, which industry bodies they are members of, whether they offer client money protection and ask to see copies of their insurance policies if you need further reassurance. Above all choose an agent with experience, professionalism and one you feel you can have a positive and mutually beneficial working relationship with. Sometimes working with an agency with a smaller portfolio will mean they have more time to spend on your property!
Price your property competitively
In order to secure the best tenant, you need to ensure there is a lot of interest in the property which means offering a good quality property at a competitive rent. A nice kitchen and bathroom are particularly important features to tenants, the same as property buyers. Good quality applicants look for “a fair deal”, or “value for money”. Rents are already higher than ever, so do your research on similar rents in the area and discuss this with your chosen agent.
Stay on the right side of the law
Pay attention to the legal side of the business, and it is a business. The industry is becoming very heavily regulated and getting even small things that go wrong can come back to haunt you and cost you so it is vital you are well informed and prepared to react as the industry becomes more legislative.
Keep abreast of new tax rules
Now that you’ve become a landlord, whether accidental or not, it is of utmost importance that you are familiar with any recent tax changes which could affect you in one way or the other, now or in the future.
The rent your property generates is considered a taxable income – starting from the 6th of April 2016, you will now be unable to claim the cost of 10% “wear and tear” against your tax bill if the property you are letting out is furnished. Also, from April 2017, mortgage interest relief began to be capped for every landlord at a 20% basic rate, even if your tax is paid at 45%.
Finally, if, while your previous home is rented, you decide you want to buy another, you will most likely be faced with an additional 3% stamp duty due to a new Government policy on second homes.
Be ready for unexpected costs
Budget for unexpected expenditure on the property as well as for void periods. A good idea is to put aside a sum of money as a contingency. Landlords who do not have the finances in place to survive void periods tend to struggle and are under more pressure to let, which can lead to agents being less selective on tenants.
Get Covered – Seriously consider taking out landlord insurance
This will typically include rent protection and legal protection. Rent protection will pay rent when the tenant defaults and a good legal protection policy covers you against virtually any legal dispute with your tenant. In our experience, this is often money very well spent. Most agents will be able to help you with an appropriate policy or speak to your own existing insurer to see what they can offer.
Take out a British Gas Homecare policy
Besides the assurance of one cost per year covering parts and labour, you can be assured of a prompt response at all times of the year. Independent contractors are often in high demand when the weather turns cold and might not be able to attend for several days or even weeks! A cold tenant is a very dissatisfied tenant.
Use Gas and Electric Experts
When getting your gas and electric safety checks done, as mentioned above, if you have a British Gas contract, they will take care of your annual gas safety inspection. If not and you are using a management agent, they will usually have a list of approved/qualified contractors who can provide this. If you are sourcing your own contractor, ensure they are suitably qualified!
Cheap is Rarely Cheerful
When carrying out repairs/refurbishments, don’t go for the cheapest options. Poor quality materials or workmanship usually have a short lifespan and will cost you more in repairs and early replacement later on. It’s usually more economical to go for better quality materials that will last considerably longer and prove a wiser investment. Tenants are pretty savvy these days and if they sense that the landlord isn’t particularly bothered about their property, it can cause a similar mindset with some tenants.
It is also a nice touch, that where appliances are included, all manuals are provided for the tenants. Even if the appliances are not brand new, manuals can often be sourced for older models online.
Take time to Understand your Tenants and Tenancy
Even if you are using a managing agent, some landlords might like to meet potential tenants, where practical. Gut feeling is often a good benchmark. Read the tenancy agreement early on. Check that it is appropriate to your property and your circumstances. Tenancy lengths can vary, but we recommend an initial six-month agreement, which is a bit like a probation period, after which a longer tenancy, maybe twelve months with a six-month break clause can be offered.
There may be a host of other questions you have and at Maurice Kilbride we are always happy to chat things through with you and hopefully provide you with the right advice. Please feel free to pop into our office in Cheadle, call 0161 428 3663 or e-mail firstname.lastname@example.org