On Tuesday we repeated the webinar "How Not to be a Landlord: Common Landlord Pitfalls and How to Avoid Them" for over 300 Landlords. We'll be hosting another session towards the end of the month.
We thought you'd be interested in some of the questions and answers we covered in the clinic session at the end of the webinar. It could have lasted another 30 minutes, but here's the ones we got through...
Q: Does anyone know of a lender who is prepared to lend on properties where the vendor has owned the property for less than 6 months?
A: There are a couple of lenders who will do this, but they will only do it based on the purchase value, not the current market value.
Q: I am currently a live-in landlord of a 2 bed property. I am travelling for a year from January so will be letting at a distance (New Zealand). Any advice is welcome, particularly how to be as active a landlord as possible.
A: Finding a trusted friend to be your on the ground contact is the first step. Preferably someone who is currently, or has experience of being a landlord. Its a good idea to agree a fee for them to provide this service. This will make the arrangement formal and ensure a level of commitment from them. Similarly you should have a written agreement of what you expect them to do; how often to visit the property, who to use for repairs, etc. Ideally you will also have a plan B if your Plan A has a change of heart or can simply no longer carry out their role.
Once you are traveling, the wonders of modern communication mean keeping in direct contact with your tenants is much easier via email and Skype. You may just need to suffer some late night calls.
Q: Are furnished tenancies more complicated/more hassle/more cost/harder to reclaim for landlords?
A: In the webinar we highlight the benefits of letting a property furnished, particularly in terms of increasing tenant interest and the rent you can achieve (up to 30% more). This advice is based on an increasing demand for furnished property but it doesn't mean that this option is any easier than its ever been; the benefits are just bigger than they used to be. A well-furnished property will usually pay back the cost of the furniture within 24 months (including wear and tear)
Q: Will I end up having to store furniture when tenants don't want furnished?
A: If you are letting a property furnished it's important to be firm with potential tenants from the beginning in terms of what can be removed and what can't.
Q: Whats your advice on the right price in my instance? Zoopla says my properties rental value is £1053 pcm. A Foxtons valuation says £1400. Would £1200 be reasonable then?
A: Both of your sources have their own agendas in setting the rental value of your property. The key is to know your own market. You can do this by setting up an alert for your own property (as if you were a tenant) on Rightmove or Zoopla. You will then get a constantly updated picture of what similar properties are being advertised for, how much interest they are receiving and how quickly they let. The decision on the right price also depends on your own urgency. However, beware of attempting to achieve too much a premium. In our experience an over-priced property can often only attract tenants who are perhaps desperate to get into a property and therefore might have something to hide, not be able to afford it long term or simply move on sooner rather than later.
Q: If I do want to show tenants around but work during the day is it acceptable to book multiple viewings in one evening?
A: You can certainly do this if there's enough demand for your property to expect the tenants to work around you. It may even help weed out the semi-serious ones. It's important to ensure each viewing slot is long enough to give the prospective tenants plenty of time for questions. If you can spare a Saturday morning an open house is another way to get around this issue.
Q: How to carry out a reference check on a prospective tenant who is on LHA?
A: LHA tenants may fail overall reference checks dues to the affordability measurement so we would recommend basing your decision on the previous Landlord's reference (perhaps done in person) and the credit score (plus your own judgment).
Q: I'm a non-UK resident landlord with a trusted tenant. What advice can you give regarding agents?
A: Make sure the agent is ARLA Propertymark accredited and part of a property redress scheme such as the Property Ombudsman (this is now a legal requirement but many still aren't). Check online for reviews of their service using independent review sites such as Trustpilot.
Q: I'd like to have a gardener to maintain the gardens. Would you just lump that into the rental?
A: Along with cleaning and broadband, providing a gardener can be a very attractive prospect for tenants on the look out for a hassle free life. Its certainly something you can included in the rental, however be careful you that you don't price yourself out of the market and that you really highlight that you are including this service in your advertising. Then make sure the garden is looking at its absolute finest when you come to do viewings (preferably on a sunny spring afternoon!) so the tenants can see the benefits.
Q: If a tenant falls into arrears, how long do you give them to correct before you start termination?
A: You can only serve a Section 8 notice once the tenant is over two months in arrears. Our partners Landlord Action can provide help and advice on how to deal with this situation.
Q: How do you know what the market is for a given area is? i.e. a family, student or couples market?
A: Looking at the descriptions of similar property in the area on the portals will give you a good steer. Student properties are usually in very defined areas defined by distance and transport links to universities. Most families' number one concern will be school catchments with parks and other amenities coming next. Couples are usually looking for nightlife and like minded people as well as good commuting links.
Q: I have had my tenants for 7 years now. Unfortunately, they will be moving on. I now need to renovate/redecorate/refresh the flat. How much do I invest in this? Can you offer some insight? ? i.e. considering I can get X amount of rent, I should invest Y etc.?
A: You're definitely on the right track with that calculation. There's a couple of additional considerations which may mean you can justify spending a little more. Firstly, a newly redecorated and refurbished property should not only achieve a premium over it's competitors, it will also attract more interest meaning your void period will be shorter each time you re-let. Secondly, replacing old appliances will reduce your repair bills and mean less phone calls. Finally, tenants will look after a property with new carpets and fittings far more than one with carpets that are worn and stained etc.