Letting a Property

PREPARATION

Start by preparing your property correctly for your intended market, this can mean the difference between letting your property or having it empty for a long period of time. Therefore before you get either your first or the your next tenants to view your property, make sure you have covered the following: Complete any small DIY jobs such as painting or decorating Air the property by opening windows. Also remember that some buyers may be allergic to pets, so make sure that all signs of animal smells and hair are removed. If any of the rooms have very bright colours or carpets, you may want to neutralise them. Get carpets professionally cleaned and clean the windows & curtains If the bathroom or kitchen looks tired then replace dated or damaged items. It may even pay to have a new white bathroom suite or kitchen units put in If you are letting the property firnished then ensure that all upholstered chairs and settees have a fire safety label Have the boiler serviced and ask for a Landlord's Gas Safety Certificate During this process always remember that you have now decided to let your property and not to get personal about any changes, as the changes that you implement are to attract the widest possible tenants in your area.

FINDING A TENANT

You could try finding a tenant yourself using a classified advert in the local paper, but is is usually better to engage a local Letting Agent who is part of a Estate Agency. Letting Agents usually charge around 10% of rental income to find tenants. If you want Letting Agents to manage the whole tenancy they normally charge about 15% of rental income. The advantage of using an agent is their ability to reach potential tenants quickly through their large budget advertising. As well as photos of properties on the windows and walls of the Estate Agents office they advertise every week in all the local newspapers. Always choose an established agent who has experience in the letting field, not just selling properties. A good agent will offer to value your property and give you a realistic monthly rental figure. They will be able to advise on the legal implications of renting your property and provide a Tenancy Agreement setting out the obligations that the tenant (and landlord) must adhere to. This should be an Assured Shorthold Agreement of not more than 12 months duration. Make sure that the clauses include provision for inspection visits, so that you can ensure that the tenant is not wrecking the property, ideally these should be quarterly.

WHAT TO CHARGE

In renting your property, the asking price is critical in attracting potential tenants. Too low and you could lose thousands of pounds, too high and nobody comes to view. Contrary to popular belief, Letting Agents do not set letting prices. All they do is estimate a reasonable property rent based on their knowledge of the property market. At the end of the day tenants determine the price of renting a property based on what they are willing to pay.

UTILITIES

There are two ways of dealing with the utilities issue, water, gas, electric etc. The first is to insist that the tenant informs them at the commencement of the tenancy and signs contacts with each to pay for the period they are in occupation. If you choose this option then ensure that you give the tenant a list of the utilities with their phone numbers and the account numbers for the property. The key issue is to avoid a host of large bills from the utilities when your tenants move out. If you are at all unsure phone the utilities yourself and inform them that the property is being rented from this date and that the tenant is legally liable to pay for all utility bills. This way if the tenant does not register with the utilities you will soon be informed by them of this. The alternative option is to calculate the monthly cost of all the utilities and add this to the rent. Make allowances for the higher usage of electricity and gas during the winter months. Never include telephone service as an option as there is no way to calculate future usage.

VIEWINGS

Have a diary set-up so that you can manage your viewings. For each potential tenant make sure that you have taken their name and number just in case you have to re-arrange the appointment, and also in case they are late and have just got lost.

Before a viewing:
  • Have a print out of your property details as they may want to take this away
  • A blank piece of paper so that you can take any notes while you are showing the tenants around
  • You have planned a route through the property
Showing the people around:
  • Always lead tenants through the property. When you open a door to the room enter first, pointing out all of the positive points of the room.
  • If a room is too small to fit everybody in then allow tenants to enter the room while you stand outside pointing out all the positive points.
  • During the course of viewing gather some information about the tenant for example.
    • About their job
    • When are they looking to move
    • Pets
  • Gathering information about the tenant, may determine who you rent to if you have several potentials to choose from.

    Of course a good Letting Agent can do most of this for you freeing up your time for other things, you can also obtain useful feedback which is well worth having, just ensure you ask the agent to get feedback before viewings start.

REFERENCES AND CONTRACTS

Once you have found a tenant, your Letting Agent should complete the following tasks.

  • Request references from previous landlords and from their employers.
  • Do a credit check.
  • Go round with the prospective tenant checking the inventory and both date it. If more than one person is renting make sure that all Sign and date it. This should be done the day of tenants move in.
  • Make sure all name sign and date the assured shorthold tenancy agreement. So that if one defaults on rent payment, the remaining tenants are responsible to make up the difference so that you are paid in full.

Then sit back enjoy the additional monthly income and consider buying another property on a Buy-to-Let mortgage, your Letting Agent can provide more information.

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