Letting and Property Management
By 2025 more than half of those under 40 will be living in properties owned by private landlords. These private landlords can range from experienced investors with large portfolio’s to an “unplanned lord” with one property and therefore their requirements are different and their approach to tenants may be different too.
The residential letting industry in the UK is massive now and, while the concept of renting a property is relatively simple, growing legislation and market demand, in an unregulated industry, means that there is a lot to consider before you put your home on the market.
Letting a home involves a complex series of tasks from deciding on the right rental income figure through to effective property marketing to management to move out.
Rental Valuation / Returns
You must have a realistic idea of what rental figure you can achieve. There are many ways to achieve this including a rental valuation, which most agents will provide for free, but it is recommended that you reach the figure using several methods to get a true idea of the market and achievable rent.
Once you have a rental figure then you need to deduct any costs that will be involved with the property like any marketing costs; maintenance costs; contracts; monthly fees etc and this will give you the net yield that you will achieve from your property.
Getting the property ready for marketing and tenants
You must ensure that your property meets health and safety regulations and that any required certification is in place. You must also make sure that you adhere to marketing regulations and provide the required certification and have the correct permissions to rent the property.
There are also many simple things that can be done, pre tenancy, to the property to make it a more attractive rental property and therefore assist with the successful and fast rental.
There are many places that your property can be marketed and in the growing digital age, these are no longer limited to the large property portals dominated by agents. Realistic photos and truthful descriptions are vital but there are lots of new social media sites that can now be utilised.
Student and professional marketing can also be very different and there are different peak advertising periods and possibly different methods/ forums in different cities especially relating to the student market.
Lots of tenants (and landlords) are trying to avoid administration fees and the constraints of high street agents so new types of letting agent, marketing forums and structure to the industry are emerging.
The viewing is the opportunity to present your property and “sell” it to the prospective tenant. There are rules to follow about access if the property is currently tenanted and lots of recommendations to ensure the property is presented well – declutter; viewing while the current tenant is in / out; viewings in the light; allow out of hour viewings etc. These are very simple techniques but failure to do them could result in a long marketing period.
The tenant referencing is one of the most important aspects of renting a property. Ensuring that you have good tenants who can pay the rent properly and look after the property should negate issues during the tenancy. There are a lot of firms offering the chance to outsource referencing which you must be very careful of as they will not support you if there are problems later on.
There are rules on paperwork in relation to the marketing and tenanting of the property. The latest change to legislation was Oct 2015 and the new rules are very strict and, failure to adhere will result in fines or serious issues with the tenancy and re possession of the property.
You have a legal responsibility to let a home that tenants can live in safely. Some of the legislation is specific like you must have a Gas Safety Certificate, smoke alarms and CO2 alarms in place, but some of it is more objective and it may be a good idea to get some advice on what are the best things to do to ensure a safe environment is provided.
Tenants Move in
Providing a comprehensive “Move in” service which includes how appliances work; when the bins are collected and any other useful pointers to living in the property should ensure that your tenants are happy and therefore look after the property better and potentially stay for longer.
A photographic and written inventory is a must, protecting both you and the tenant, and you must adhere to regulations regarding the inventory and also the deposit security if you take one.
There will always be issues during a tenancy and these can range from broken appliances to unruly neighbours to pests to problems with rental payments. Reacting quickly to any problems normally means they can be contained and solved but remember that tenants believe that everything is an emergency and therefore clear communications and timescales explained to the tenant are vital.
Renewing a tenancy
There are rules that govern the type of tenancy and length and what needs to happen for possession or continuation of the tenancy. You must ensure that these are adhered to avoid mistakes that may result in being unable to remove the tenant. You must also be careful of the advice that you are being given by agents who command fees for renewals and fixed term contracts that you may not want if you were aware of your options.
Tenant Move out
Once notice has been given and accepted a “move out” appointment is recommended. This allows opportunity to check the property against the original inventory.
We recommend a “pre move out” check a few weeks before the tenant leaves as this means that if there is damage or problems then either the tenant can rectify before the final check or you can have time to make arrangement to rectify as soon as they do.
You should also check the property during the tenancy periodically so there should be no surprise work at the end of the tenancy that may delay a new tenant moving in, but remember there are rules that govern access that you must be aware of.
This is a short overview of the process and a few recommendations on how to avoid problems when renting out your property.