Top tips for first-time landlords
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We discuss climbing the buy-to-rent property ladder with first-time landlords and local industry experts.
Taking on the extra risk and responsibility of becoming a landlord can be a daunting prospect. With the uncertainties of Brexit, tough new restrictions on finance cost tax relief and an increasing amount of new laws that landlords need to abide by, there are lots of factors for the first-timer to consider before taking that first step on the buy-to-rent ladder.
However, with impressive utilities and strong transport links, Havering and Brentwood continue to offer tenants an attractive alternative to the soaring prices of London’s rental market. Read on for our top tips for first-time landlords to help minimise risk and add extra appeal to your property.
Preparation is key
It’s helpful to identify your ideal tenant, and tailor your property to suit their needs. While students are more likely to require a furnished space, families could be looking for a more practical home, with ample storage room and a child-friendly set-up essential. Jess Sydney, a 27-year old customer service manager, says: “I didn’t really think about the tests and certificates you need to have, as well as the extra safety bits like electricity certificates, fire alarms, gas and boiler checks. This all adds up, especially if you’re not expecting it.” Steven Bond, director at Beresfords Estate Agents in Brentwood, continues: “There needs to be an additional budget set aside for upfront costs such as mortgage arrangement fees, survey costs and stamp duty. That’s why a proper analysis at the outset is imperative.”
A question of taste
“When doing the property up, I wanted to make it amazing – like I was going to live in it, and I nearly spent way too much. You have to find a balance between making it modern and liveable, but also neutral so tenants can see it as a blank canvas for them to decorate” says Jess. While it can be tempting to create a stylish and inviting space that you’d be proud to live in yourself, your tenants’ taste may be totally different, which can result in the need for hasty and expensive alterations. The Elliot Leigh estate agents in Bow have some tips for colour schemes, too. “Magnolia has died out – tenants like to see a different colour setting these days. Greys and whites are coming back around again.”
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Marcus Franck, founder of London-based Franck Energy, points out that landlords will need to be wary of a new environmental policy coming into play in April 2018. “All properties let in the private sector must have a minimum energy performance rating of E on the Energy Performance Certificate (EPC)” he says. “All existing tenancies will need to comply with this regulation by 2020… those which ignore it may incur a fine of over £4,000.” Carrying out work to make your property more eco-friendly will naturally involve additional expense, but this could also play a big role in attracting new tenants, as they are the ones who stand to benefit from significantly lower gas and electricity bills in the long run.
Avoid mates’ rates
Renting to somebody you know can seem like a good idea, but it’s also important to keep a professional relationship with your tenants that steers clear of emotional ties. That’s not to say that you shouldn’t be polite and courteous, but renting out a property to your friend may turn uneasy if a dispute should arise. “I’m not sure if I’d ever rent to someone I know again” continues Jess. “Just because the initial awkwardness with asking for late rent is a bit uncomfortable when you already know them.”
Value of a great tenant
Landlords get a tough press – and stories of horror homeowners neglecting the needs of their tenants are sadly two-a-penny. But the importance of vetting your own tenants can’t be understated. Ensure anybody you take on is trustworthy and reliable, and don’t underestimate the value of finding a great tenant. Look after them, don’t put off any work they ask you to carry out and they’ll stick around for longer. Rob Bence, co-founder of UK housing forum The Property Hub, highlights the importance of written communication. “It’s good to have evidence of correspondence, so written contact – whether that be in the form of texts, emails, or even a Facebook message – is better than phone conversations.”
Location, location, location
Steven Bond, of Bereford’s Estate Agents, stresses the need to be savvy when picking a location for your property. “Look at areas that are on the up or are consistently offering a strong yield. Brentwood, Shenfield and Gidea Park – all areas near the new Crossrail line – have performed exceptionally well over the past few years.” The much-awaited Elizabeth Line is now just 18 months from completion, and it will offer residents of Brentwood and Shenfield easy access to London’s main employment, shopping and business districts. Crossrail is projected to add an extra £42 billion to the economy, and with this the demand for property in the local area is likely to surge.
Consider an agent
Many first-time landlords look to skip the expense of using an estate agent in favour of trying to rent out the property themselves. However, the benefits of using an agent shouldn’t be overlooked. “We act as a buffer between the tenants and the landlords. We provide full references and sort all of the necessary admin,” say Elliot Leigh. Landlord Stuart Summers says: “Agents are expensive but take away a lot of the hassle. If you manage it yourself, you’re in control of the expenditure, but be prepared to act if your tenant calls you about a leak as you are getting into bed.”