The Association of Independent Inventory Clerks (AIIC) has suggested that landlords and letting agents start preparing for longer tenancies, as tenants look to stay in their properties for longer.
So how does a landlord prepare for a long-term tenancy? The firm suggests improving management and organisation, and thinking about the furniture, fixtures and fittings that could help tenants feel more at home in your rental property.
The AIIC’s advice arrives as results from the English Housing Survey found that tenancies are getting longer – the average is now four years.
It also revealed that 46% of 25-34-year-olds are living in private rental homes, up from 24% a decade ago.
The Chair of the AIIC, Patricia Barber, explains the importance of getting organised ahead of longer tenancies: “When tenants stick around for longer, often the changes of confusion and disagreement over certain issues are increased when the tenancy does eventually come to an end.”
In light of the figures, take note of the following tips to ensure you and your tenants get the most out of your rental property:
Keep everything in order
“The longer time goes on, the more likely landlords and tenants are to forget details from the tenancy agreement or important information about the deposit,” says Barber. “That’s why stringent administration – keeping copies of everything and organising accordingly – is so important.”
You must ensure that you keep copies of all documents and correspondence between you and your tenant. Organising these in a file will help you find out any information you need quickly and efficiently, and will help you stick to the law.
There are several documents that you must pass onto the tenant – deposit protection information, the Government’s How to Rent guide, the tenancy agreement and a thorough inventory.
Additionally, landlords are now required to conduct immigration checks on all prospective tenants ahead of the tenancy starting under the Right to Rent scheme. You must keep copies of any documents checked and put these on file.
If you have all paperwork in order, you and your tenant should both know where you stand.
The importance of inventories
“A detailed inventory will help landlords and tenants to determine exactly how the property’s condition has changed over the course of the tenancy, what can be deemed fair wear and tear, and what needs to be replaced and therefore deducted from the tenant’s deposit,”1 says Barber.
If you do not provide your tenants with a detailed inventory, neither the tenant nor yourself will know the exact condition of the property when the tenant moved in, and therefore how it has changed over the course of the tenancy.
With longer tenancies, this is particularly important, so remember to take photographs when the tenant moves in, so that you can compare the state of the home when they move out.
As wear and tear is more likely to occur over a longer period of time, it is vital that you conduct regular checks of the property – every three to six months – so that you can ensure the tenants are maintaining the home to a high standard.
If you have any issues with the condition of the property, these should be flagged up and noted down, along with the date, at these inspections. Have your tenants sign any reports you make, so that you have their agreement of any changes that must be made.
Fix up the furniture
With tenants looking to live in the same property for longer, it is important that they feel at home. If the property doesn’t feel very homely when they move in, they are less likely to look after the place and leave it in a good state.
By investing in good quality furniture and neutral fixtures and fittings, you will ensure that any tenant can move in and make the property their own. Also, be clear about what is permitted – can they hang pictures, for example?
Think about what changes you can make that could entice tenants to stay in the property for longer and take good care of the home. Regular decoration and updates will also help you find more tenants when the time comes.
Be aware that if you plan to replace any furniture, the Wear and Tear Allowance, which currently reimburses landlords for 10% of their rental income per year, is soon to be changed and replaced with compensation of actual expenditure. This will apply from 1st April.
Protect your investment
Financial difficulty is likely to hit each of us at some point. If your tenants are staying in your property for longer, they may suffer money issues at some point.
It is therefore a good idea to protect your rental income with Rent Guarantee & Legal Expenses Cover, which will ensure you still get paid, even if the tenant defaults on the rent. This insurance also covers any legal expenses you may incur by evicting tenants.
Rent Guarantee provides the ultimate peace of mind, meaning that you do not have to worry about your tenants falling into rent arrears.
Alongside this protection, it is wise to communicate often and effectively with your tenants about their financial circumstances, and create a strong rapport so that they can inform you of any changes to their funds.
This guide will help you avoid rent arrears: https://www.justlandlords.co.uk/news/protecting-your-lettings-business-from-rent-arrears/
Follow these steps and you will be well on your way to successful longer tenancies!