Taking Responsibility

The Health and Safety Executive (HSE) has been cracking down on landlords who fail to take responsibility for builders working on their property. The default assumption is that builders are working to their own safety standards but, in fact, as a landlord you are required to make provisions for ensuring that builders are able to complete their work safely.

What does this Mean?

Practically, you won’t be expected to haul up several stories of safe scaffolding or provide hard-hats for everyone entering the property, but it does mean you need to exercise a degree of managerial control. Builders, for example, need to be given enough time to complete a job and have access to proper facilities. Landlords, also, have a responsibility to ask questions – if you see something that looks dangerous then you are well within your rights to query the practice.

Covering your Liability

Asking the right questions and ensuring you have a safe working environment for your team when managing a project is vital. Giving the right sort of evidence that you’d done this can be tough, but perhaps take some photos or at least take a note of anything that you think is untoward. Finally, if you’re having building work done, nothing is as secure as taking out unoccupied property insurance – don’t risk work on your property without it.

When managing a building project health and safety often come as an afterthought, but the HSE are very keen to ensure all landlords are compliant with the law. Don’t take any chances on your site and make sure you don’t let anyone else take a chance either.

Acting as a deterrent

Though everyone hopes their home will never be broken in to, a visible alarm system does act as a serious deterrent for burglars. Many crimes in cities are simply opportunist endeavours committed by criminals who hope to make a quick profit by getting in and out quickly. A branded and obvious alarm will reduce the chance of your property being targeted considerably, without you even having to use it.

Other models available

Of course, models which can communicate with tenants or landlords are very high tech and, therefore, very expensive. There are plenty of good models which incorporate loud and powerful alarm tones and personalised security meaning that only you (or your tenants) are able to switch the alarm off. Though it might be a nice idea to have sole access to the alarms, do beware that alarms can go off without there necessarily being an intruder – unless you live especially close to your property you will want to teach your tenants how to disable it.

The benefits of an alarm

Not only does an alarm act as a deterrent, it severely increases the chance of your intruders being caught and the chances of your tenants recovering their property. The right alarm might also entitle you to a discount off of your landlord insurance premium or you may be able to claim a lower excess for certain incidents. If you do have to claim, a burglar alarm might just end up paying itself back.

The type, price and specification of burglar alarms are variable but remember that having something fitted is far better than having nothing at all. If you’re in the Nottingham area it is definitely worth checking out the trial scheme and wherever your property is, always keep you eyes on the news feed, just in case anything comes up in your area.

How does the Site Work?

It works two ways – students first choose whether they are looking to rate a property or looking to find a property. If they choose to rate a property they can enter the address of the property, the letting agent and give it an overall rating out of five. The reviews are anonymous and, once a property is reviewed it means it can be found by other students who are looking for a property.

The Bad News

There’s no question that such a site could be damaging for the reputations of some landlords. It’s well known that consumers are more inclined to leave negative feedback and any problems will quickly be reported. If that means you end up with a one-star rating then, undoubtedly, that’s going to damage business going forward.

The Good News

On the other hand, a good rating and a good bit of publicity will help draw in tenants. You’ll also be able to see what sort of rents are being charged by higher rated properties and perhaps adjust yours accordingly. Equally, if all has gone well, it wouldn’t be a bad strategy to ask your tenants to give you positive feedback.

This sort of site is not uncommon and, sooner or later, might not be restricted to student properties. There’s only going to be more pressure of landlords as this sort of business takes off, so keep to hand a good landlord insurance policy, sort out any problems quickly and efficiently and just bear in mind what a good rating might do for your business.

Great opportunities

From one perspective, overcrowding does present lots of opportunities for landlords. Cheap developments are starting to look more feasible and in some parts of the country there is even substantial funding available for landlords looking to develop formerly derelict properties and make them available for social tenants.

The opportunities are in the lower ends of the market, charging a high volume of low value rents so be prepared to shop cheap but don’t compromise on quality – it will only cost you in the long run. Equally, demand should be flourishing for properties in overcrowded areas, so focus on getting a good yield from your property rather than just a comparably high rental price.

Regulatory problems

Whatever opportunities there are in overcrowded market, there are also serious dangers. You need to be certain of your responsibilities when it comes to numbers, occupants and HMOs. It might make great financial sense to put seven tenants in a six bed house but it is more than likely illegal.

Equally, you need to research your status if you wish to take on lodgers because you’ll find that most landlord insurance policies will be invalid if you don’t have the proper legal provisions. If you’re unclear as to what you need to be doing, you need to get in touch with your local council and they will help you to figure out what category your property falls under.

As the population continues to grow, overcrowding is going to be a serious issue in the coming years and though that will generate opportunities for some landlords, the majority will need to be even more confident that they are in a legally defensible position. If you are unsure, give your local authority a call – it’s far better to take responsibility.

What did the Report Say?

As usual, the actual report was long and very detailed but in general the report converged on two major points. Firstly, the report urged the government to enable self-invested pension plans to invest in new property, loosening the regulations on what sort of organisations could buy property and, secondly, it recommended that tax and regulatory structures should be simplified for landlords.

What does this Mean?

The first point recognised that at the moment, the market for privately let housing is dominated by private landlords and small development companies. Though that’s fine in principle, the report states that encouraging different kind of organisations like large pension trusts or even real-estate investment trusts to invest in rental property would boost the number of houses available. The second point is probably the most important, though, because reducing the admin burden on landlords would mean more time to concentrate on business.

How will this Affect Me?

Intuitively, an increase in the number of people offering rented property should bring about a drop in the price. This is, at the moment, unlikely, because there is such a shortage. New investors in the market may make bidding for certain properties more competitive, but it shouldn’t affect short-run rent prices too much. The second point will mean change, however, so keep an eye on what the results of these recommendations are. Of course, a good landlord insurance policy is vital for ensuring you are protected if you encounter legal problems concerning regulatory bodies.

Overall, the report has to be positive for landlords and a simplification of tax and regulatory laws can only mean there’s more time to do the things that matter! As always, keep an eye on the news feed and the blog for more updates.

You might well have spotted some critical articles in the national media lately about nasty landlords who don’t look out for their tenants, but Emma Lunn of the Independent pointed out yesterday that the relationship works two ways and very often landlords are left in extraordinarily difficult situations by tenants. The worst kind of tenants, though, are those who just don’t pay up – here’s the run down on how to ensure you are financially protected.

Rent in Arrears

For most people, rent represents the largest chunk of salary that goes towards costs and, so, if you find your rent is not being paid then that should be the very first warning sign. Once is a mistake but twice might be a problem. You need to chase up rent in arrears as soon as it happens – don’t leave it until it’s too late to do anything about it. You need to be clear, also, that you have warned your tenants about late rent, plenty of tenants simply claim they have paid in an attempt to get out of arrears.

Bill Payments

Not so frequently, bills go unpaid. Again, this can be because tenants are being negligent, but often there are just mistakes on the account. Gas and electricity bills are sometimes paid in considerable arrears and, often, tenants just get confused about when payment dates are. If they are still responsible for the property then a gentle reminder is the best course of action, but don’t ever return a deposit without first checking that all bills have been settled – you are more than entitled to hold back money to settle an account.

Council Tax

The tax man will not wait for payments and the fines for non-payment of tax are usually astronomical. You need to be sure, firstly, that council tax is your tenant’s responsibility (as some properties will have no council tax liability) and then you need to chase until it is paid. If you feel your tenants are not going to pay, you may want to minimise penalties by covering council tax yourself, but it’s worth speaking to your Rent Guarantee Insurance provider first.

Non-paying tenants needn’t be tolerated so make sure you stamp out any bad habits early and, if needs be, don’t be afraid to start eviction proceedings: you might be surprised how much rent can be found once you do!

Online marketing

The easiest, and cheapest, way of getting exposure is to make sure you’re well marketed online. Large property websites are good tools but don’t underestimate smaller, specialist letting sites. All you need is one tenant, remember, so it’s about catching the right person’s eye, not everyone’s eye. Market appropriately, too, you won’t find many high value tenants searching on Craigslist for a new place to live.

Newspaper and print

There is a surprising power in classified ads and you might well pick up a good tenant through a small ad in the paper. However, you need to ensure that you aren’t slack on your screening processes – remember that anybody can reply to a classified ad and you need to ensure you have the right tenants. Of course you can never be totally sure that your tenants are perfect, so a make sure you take out a good landlord insurance policy.

Word of mouth

Plenty of landlords have found good tenants by word of mouth, but new tenants won’t just walk through the door.; you need to exploit the right channels. Try asking your current tenants if they have anyone who could take over after they leave – this is particularly effective with student or seasonal lets that have a regular pattern. Don’t be afraid to be direct – you never know what you might stumble upon.

It is possible to find the right tenants without an agency, but you do have to be proactive. It’s good to start the search early to give yourself the best chance of finding the right person and don’t be afraid to use a few channels at once – just make sure you take down anything you put up once you fill your property.

Uncertainty

The reason that businesses are not keen to take on traditional three or five year lets is because the economic climate is uncertain. Just a year ago, most economists were fairly confident that the UK was back on the right track, but all of a sudden we’ve re-entered recession. Five years ahead is just too far to predict for most entrepreneurs and few people are prepared to part with their money.

Coming to a deal

A shorter term lease is undoubtedly going to make your let more attractive for businesses, but that doesn’t mean that you have to accept an uncertain future yourself. It may be wise to make up for your risk by charging a little extra on the lease. Once you’ve got a tenant in, though, if they’re still trading it’s often easy enough to keep them there so don’t be afraid to offer up something short term.

Filled is better than empty

Regardless of the economic climate, a property with tenants is advantageous to a landlord for security purposes. You will save money on unoccupied property insurance and your tenants will be responsible for keeping things in good working order. Even if you expect your tenants to move on after a year, filling your property now is a must.

There are plenty of ways to attract business attention, but very few businesses will show any interest at all in a three or five year lease. If you find that you’ve not been getting enough enquiries, try dropping the term and potentially raising the price – you should find a tenant in no time.

Finding a property

One difficulty is finding the right place. If you’re intending to move in after your letting period is up, it needs to be a property you’d buy anyway, but it still needs to have letting potential. You will need to furnish the property in a clean, neutral way and leave any personal quirks for when you finally do move in. Smaller, one or two bedroom properties work well for this purpose.

Short term contracts

Be clear about your plans with your tenants and consider signing a contract that is only a year or eighteen months long. You can even fix moving out dates well in advance so that you know when you can organise moving in. It’s really important that you take out a good landlord insurance policy for the term of your let – after all, it’s your property that you’re protecting from damages!

Alternative accommodation

One of the reasons that a short term let appeals to first time buyers is that they often have alternative accommodation available. Living with parents or for those in the forces or hospitality, living at work, are ideal arrangements and can help you put a few extra pennies in your pocket before you move in to your property for good.

Buying a property with the intention to live in it is massively exciting, but an opportunity to generate some income from is well worth grasping. Make sure your property is suited to letting and you will be able to find the right, reliable tenants, but don’t be put off becoming a landlord just for a year or so – if you’re looking to buy a property anyway, it might be a good way of making back a few thousand on the asking price!

Letting Agents

Your biggest ally as a long distance landlord is going to be you letting agent and so you need to choose wisely. Some agents will happily advertise your property to potential tenants, screen your tenants for you and fill the property when they are satisfied whereas others will be happiest leaving the bulk of the work to you. There is a sliding scale of what you pay for and what you get, so expect to be charged a good proportion of your income if you want the full package.

Management Companies

For those little things, there are management companies. Breakages, damages and day to day maintenance can all be dealt with by a management company and it’s this sort of thing that, as a long-distance landlord, you don’t want to be spending your time doing. A good management company will offer you an all inclusive package which completely takes the pressure off you.

Financial Assistance

The final essential as a long-distance landlord is a good landlord insurance policy. The more hands on you get with property letting, the more scope there is to save money and so, as a long-distance landlord your margins are likely to be quite tight. Don’t underestimate the cost of damages and make sure you’re covered at all times for all your properties.

It’s possible to be a landlord without really putting too much effort in, but the financial risk is still very much on your shoulders. Letting agents and management companies will all do the job for you, but they will cost you, so find a balance between what you can and can’t afford and how much work you’ll have to put in yourself.