If a landlord is facing a dispute with their tenant over the return of the deposit money, the type and quality of evidence submitted to the adjudicators is the key to proving the point and ultimately winning the case.
It is important for landlords to remember that the ‘burden of proof’ lies with them to show why they are entitled to claim money from the deposit.
Often a Landlord will provide a concise written submission clearly laying out the issues in dispute but will fail to provide relevant evidence in support of their claim.
This can easily be avoided by making sure that the quality of the evidence provided is as high as possible. If photographs or video is submitted try to ensure that these are digitally dated. Only submit evidence relevant to the issue(s) in dispute. For example, don’t provide photos showing damage to the property or its contents, if the dispute only involves money claimed to pay for a utility bill or outstanding rent.
Provide clear evidence indicating the condition of the property at the start and end of the tenancy such as an opening inventory and check-out report.
The inventory should also be agreed to, and each page signed by, the landlord and the tenant at the start of the tenancy.
Many landlords also believe the property must be returned to them in the same condition as at the start of the tenancy, but many fail to make an allowance for fair wear and tear. This is topic which many landlords do not fully understand, and one which I shall be writing about in the coming weeks.
Remember, the deposit money is regarded as the tenant’s money by the Adjudicators unless the landlord or agent can prove they are legitimately entitled to claim against it.
iQ Property Ltd, Letting agents and property management specialists based in Hull. Members of ARLA & TPO, Columbist for the Hull Daily Mail. Follow the iQ Property Blog!
Wednesday, 5 October 2011
Tuesday, 19 July 2011
6 Steps to choosing the right tenant
Demand for rental property is continuing to rise and as demand increases, so does competition between tenants. Choice for landlords is a good thing, but what should you be looking for and how can you help to make sure you choose the right tenant?
1. Check references
References are amongst the most useful tools available to you in the hunt for reliable tenants. All landlords should request references from the prospective tenant’s previous landlord and existing employer as a minimum. Remember, though, that these are easily faked, so you should always follow up the reference by phoning. This is not a guarantee of the tenant’s ability to pay their rent although it will be a good indicator.
2. Credit checks
A credit check can help you judge whether or not the tenant is likely to pay the rent (or, more accurately whether they have a history of non-payment); and it can help you judge whether or not the tenant has existing disputes that might, in the worst cases, cause bailiffs to come knocking at your property.
3. Meet the tenants (and trust your instincts)
Whenever possible, make sure that you meet your prospective tenants before making an agreement. A face-to-face meeting is the best way to get an accurate sense of the tenant’s personality. The importance of trusting your instincts really cannot be overstated. If the tenant’s references are fine but you are still unsure about the individual, you should listen to your gut feeling. If you feel uncomfortable letting your property to them, then keep looking.
4. Always take a deposit
It is remarkable how many landlords fail to take a security deposit from their tenants. This is one of the most important ways in which you can protect yourself and your property, and you should not hand over the keys to your property until you receive it. Remember though that the deposit needs to be registered in a government deposit protection scheme by law. Many Agents now also insist that tenants also provide a ‘home owner’ guarantor for added security – this is a move which many landlords would benefit from.
5. Give yourself time - don't rush!
Whenever possible, try not to end up in a situation in which you are forced to let your property in a rush. Every landlord wants to minimise void periods. But if you don’t give yourself enough time, you risk being rushed into letting your property to an unsuitable tenant. Remember that finding the right tenant can be a relatively lengthy process.
6. Consider using a regulated agency
Finally, you should not discount using a regulated lettings agency. Look for agents that are ARLA, Nals or Rics members. A professional agent will help you to find suitable, reliable tenants in a timely and cost effective manner.
Landlord and Tenant questions answered by Richard Pennack - specialist Lettings, Management and Investment agent based in Hull. Richard is Managing Director of iQ Property (Hull) ltd and a member of ARLA. Specialising in Residential and light commercial property Lettings, Management and Investments. Call 01482 240148 or visit www.iqpropertyhull.co.uk
1. Check references
References are amongst the most useful tools available to you in the hunt for reliable tenants. All landlords should request references from the prospective tenant’s previous landlord and existing employer as a minimum. Remember, though, that these are easily faked, so you should always follow up the reference by phoning. This is not a guarantee of the tenant’s ability to pay their rent although it will be a good indicator.
2. Credit checks
A credit check can help you judge whether or not the tenant is likely to pay the rent (or, more accurately whether they have a history of non-payment); and it can help you judge whether or not the tenant has existing disputes that might, in the worst cases, cause bailiffs to come knocking at your property.
3. Meet the tenants (and trust your instincts)
Whenever possible, make sure that you meet your prospective tenants before making an agreement. A face-to-face meeting is the best way to get an accurate sense of the tenant’s personality. The importance of trusting your instincts really cannot be overstated. If the tenant’s references are fine but you are still unsure about the individual, you should listen to your gut feeling. If you feel uncomfortable letting your property to them, then keep looking.
4. Always take a deposit
It is remarkable how many landlords fail to take a security deposit from their tenants. This is one of the most important ways in which you can protect yourself and your property, and you should not hand over the keys to your property until you receive it. Remember though that the deposit needs to be registered in a government deposit protection scheme by law. Many Agents now also insist that tenants also provide a ‘home owner’ guarantor for added security – this is a move which many landlords would benefit from.
5. Give yourself time - don't rush!
Whenever possible, try not to end up in a situation in which you are forced to let your property in a rush. Every landlord wants to minimise void periods. But if you don’t give yourself enough time, you risk being rushed into letting your property to an unsuitable tenant. Remember that finding the right tenant can be a relatively lengthy process.
6. Consider using a regulated agency
Finally, you should not discount using a regulated lettings agency. Look for agents that are ARLA, Nals or Rics members. A professional agent will help you to find suitable, reliable tenants in a timely and cost effective manner.
Landlord and Tenant questions answered by Richard Pennack - specialist Lettings, Management and Investment agent based in Hull. Richard is Managing Director of iQ Property (Hull) ltd and a member of ARLA. Specialising in Residential and light commercial property Lettings, Management and Investments. Call 01482 240148 or visit www.iqpropertyhull.co.uk
Friday, 10 June 2011
Buying a house without a deposit? A look at ‘Rent to Buy’ & ‘Tenant buyer schemes’.
It may be a ‘buyers market’ at the moment in the property market, but for anyone looking to buy their own home and are struggling to raise the deposit, times are tough. However, “rent to buy” or “tenant buyer” schemes could offer a simple solution to this problem. They enable potential buyers to purchase a property by renting it first. A proportion of the monthly rent is used to reduce the final amount owed on the property – allowing the “tenant buyer” to gradually save for a deposit over time. After this period the “tenant” can buy the property using a mortgage at a pre-agreed price.
It’s a similar situation when buying a hire car. You can put down an option to buy that car in three years time, whilst getting to use the car from day one. At the end of the agreed period you can either hand the keys back, or take up the option to purchase it at a pre-agreed price.
The advantage for the buyer is that they can treat the property as their own home from day one, and any value they add to it, they get to keep as the end purchase price is fixed in advance. In addition some of the monthly rent will also be going back into their own pocket – effectively helping them to save the deposit required to buy. This method of purchase is generally far more affordable than the 10%+ deposit (and other fees) that mortgage lenders will ask for.
The benefit for the seller is that they receive a regular rental income and no void periods. Maintenance costs are also reduced as the property is generally well looked after. They also have the security of an option to sell their home, on or before a specific date in the future.
This method of purchasing property has been around for years in the commercial sector, but is a relatively new idea in the residential sector. However, this approach is gradually being seen by landlords and buyers as a win-win situation for both parties – especially when mortgage finance is tight and property sales are slow.
It seems more and more “rent to buy” schemes are being used by potential buyers keen to get on the housing ladder and by sellers keen to ‘sell’ their property without drastically reducing the price. This is a promising development in the residential property market and one that I will watch with interest.
____________________________________________________________________________________
Your questions answered by specialist property Lettings, Management and Investment agent Richard Pennack. Managing Director of iQ Property ltd based in Hull and Specialists in Residential and light commercial property Lettings, Management and Investments. iQ Property ltd is a member of ARLA and The Property Ombudsman. Call 01482 240148 or email richard@iqpropertyhull.co.uk or visit www.iqpropertyhull.co.uk
It’s a similar situation when buying a hire car. You can put down an option to buy that car in three years time, whilst getting to use the car from day one. At the end of the agreed period you can either hand the keys back, or take up the option to purchase it at a pre-agreed price.
The advantage for the buyer is that they can treat the property as their own home from day one, and any value they add to it, they get to keep as the end purchase price is fixed in advance. In addition some of the monthly rent will also be going back into their own pocket – effectively helping them to save the deposit required to buy. This method of purchase is generally far more affordable than the 10%+ deposit (and other fees) that mortgage lenders will ask for.
The benefit for the seller is that they receive a regular rental income and no void periods. Maintenance costs are also reduced as the property is generally well looked after. They also have the security of an option to sell their home, on or before a specific date in the future.
This method of purchasing property has been around for years in the commercial sector, but is a relatively new idea in the residential sector. However, this approach is gradually being seen by landlords and buyers as a win-win situation for both parties – especially when mortgage finance is tight and property sales are slow.
It seems more and more “rent to buy” schemes are being used by potential buyers keen to get on the housing ladder and by sellers keen to ‘sell’ their property without drastically reducing the price. This is a promising development in the residential property market and one that I will watch with interest.
____________________________________________________________________________________
Your questions answered by specialist property Lettings, Management and Investment agent Richard Pennack. Managing Director of iQ Property ltd based in Hull and Specialists in Residential and light commercial property Lettings, Management and Investments. iQ Property ltd is a member of ARLA and The Property Ombudsman. Call 01482 240148 or email richard@iqpropertyhull.co.uk or visit www.iqpropertyhull.co.uk
Tuesday, 12 April 2011
Protect you BTL assets (Part 2)
Part 2 - Why are Inventories and Schedules of condition important?
Landlords and tenants often dispute who is responsible for damage to a property at the end of a tenancy. This can be a costly affair for both parties in time, money and hassle. However there are some simple rules that can be followed to significantly reduce a dispute arising.
Firstly, what is an Inventory and a Schedule of condition? In its purest form an Inventory is a comprehensive list of all the fixtures, fittings, furnishings and other items included in the property that is to be let. A schedule of condition is essentially a ‘report’ on the condition of the property itself.
To avoid potential disputes it is highly recommended that both an Inventory and Schedule be carried out prior to tenancy commencing and cross checked when the tenancy ends. This is part of what is known as the ‘check in’ and ‘check out’ procedure. The landlord and tenant must agree (and sign to confirm) that the contents and condition of the property are as stated. It is also advisable to take ‘date stamped’ pictures of the property and the contents to support the inventory and schedule - focusing on any particular area’s that are problematic (such as any stains on the carpets, damaged walls, door bell not working etc).
Once the tenancy ends (and the tenant is ‘checked out’), the condition of the property (and its contents) can be checked against the initial inventory and schedule. If any disputes then arise at this stage the photographic evidence can be checked to ascertain whether the damage has been caused during the tenancy period. In my experience, disputes are vastly reduced when using this approach.
If a dispute still arises the deposit claim will be referred to the Alternative Dispute resolution (ADR) service. The ADR service usually finds in favour of the tenant - unless the landlord can prove otherwise. Note also, that a landlord cannot claim against a deposit for ‘fair wear and tear’ and will be expected to prove that the correct check in /out procedures where met, as well as providing evidence of regular inspections. The bulk of this proof comes in the form of the signed inventory, schedule and supporting photographic evidence.
So, to significantly reduce deposit disputes, it is essential for landlords to conduct an inventory and schedule of condition with every new tenancy, ensuring your asset is protected.
# # #
Your questions answered by specialist Letting and Management agent Richard Pennack. Managing Director of iQ Property (Hull) ltd and a member of ARLA. Specialising in Residential and light commercial property Lettings, Management and Investments. Call 01482 240148 or email richard@iqpropertyhull.co.uk or visit www.iqpropertyhull.co.uk
Landlords and tenants often dispute who is responsible for damage to a property at the end of a tenancy. This can be a costly affair for both parties in time, money and hassle. However there are some simple rules that can be followed to significantly reduce a dispute arising.
Firstly, what is an Inventory and a Schedule of condition? In its purest form an Inventory is a comprehensive list of all the fixtures, fittings, furnishings and other items included in the property that is to be let. A schedule of condition is essentially a ‘report’ on the condition of the property itself.
To avoid potential disputes it is highly recommended that both an Inventory and Schedule be carried out prior to tenancy commencing and cross checked when the tenancy ends. This is part of what is known as the ‘check in’ and ‘check out’ procedure. The landlord and tenant must agree (and sign to confirm) that the contents and condition of the property are as stated. It is also advisable to take ‘date stamped’ pictures of the property and the contents to support the inventory and schedule - focusing on any particular area’s that are problematic (such as any stains on the carpets, damaged walls, door bell not working etc).
Once the tenancy ends (and the tenant is ‘checked out’), the condition of the property (and its contents) can be checked against the initial inventory and schedule. If any disputes then arise at this stage the photographic evidence can be checked to ascertain whether the damage has been caused during the tenancy period. In my experience, disputes are vastly reduced when using this approach.
If a dispute still arises the deposit claim will be referred to the Alternative Dispute resolution (ADR) service. The ADR service usually finds in favour of the tenant - unless the landlord can prove otherwise. Note also, that a landlord cannot claim against a deposit for ‘fair wear and tear’ and will be expected to prove that the correct check in /out procedures where met, as well as providing evidence of regular inspections. The bulk of this proof comes in the form of the signed inventory, schedule and supporting photographic evidence.
So, to significantly reduce deposit disputes, it is essential for landlords to conduct an inventory and schedule of condition with every new tenancy, ensuring your asset is protected.
# # #
Your questions answered by specialist Letting and Management agent Richard Pennack. Managing Director of iQ Property (Hull) ltd and a member of ARLA. Specialising in Residential and light commercial property Lettings, Management and Investments. Call 01482 240148 or email richard@iqpropertyhull.co.uk or visit www.iqpropertyhull.co.uk
Monday, 21 March 2011
Protect you BTL assets (Part 1)
Part 1 – Why you need References, Guarantors and Deposits.
Whenever letting a property, as a landlord you should always fully reference your prospective tenants and take a security deposit – before handing over the keys. Referencing a tenant means conducting credit checks, employment and previous landlord checks - where applicable. However, in these times of economic uncertainty it is also advisable to seek a ‘home owner’ guarantor – especially for some sectors of the rental market.
Landlord and Employer referencing can tell you a lot about a person’s character and habits, and credit checks can tell you a lot about a person’s financial position - but as we all know this can change very quickly in this economic climate.
Even if the references are satisfactory, you will still need to ascertain any risk in letting the property to them. This is more difficult to judge and usually where a guarantor comes in. I usually ask for a ‘home owner’ guarantor (in addition to the deposit) if the tenant is under 30 (this is usually their parents), a student, in receipt of LHA or earns less than £20k. In my experience this is sufficient to prevent any problems arising during the tenancy. No level of referencing is 100% watertight - but in the event of a tenant going off the rails, a guarantor may step in earlier to resolve any problems on the basis they would want to reduce their own liabilities.
Deposits are also key to protecting your property against damages. All landlords will be aware that they are responsible for the maintenance of the structure and services to their property but it can be difficult to control how the tenant treats the property internally. Regular inspections should identify any issues early on but a deposit is the financial security that should cover the cost of any damages - caused by the tenant during the tenancy. In the rare event that the deposit doesn’t cover the damages you will still have the guarantor to fall back on.
It takes time, money and effort to follow these procedures correctly but good management involves high levels of skill and time commitment to minimize the risks associated with letting property. Sometimes it is simply more economical - when weighing up all the factors - to outsource the management to a reputable regulated agent. The benefit of outsourcing these management functions is a lifestyle choice that for many, definitely outweighs the costs.
# # #
Your questions answered by specialist Letting and Management agent Richard Pennack. Managing Director of iQ Property (Hull) ltd and a member of ARLA. Specialising in Residential and light commercial property Lettings, Management and Investments. www.iqpropertyhull.co.uk
Whenever letting a property, as a landlord you should always fully reference your prospective tenants and take a security deposit – before handing over the keys. Referencing a tenant means conducting credit checks, employment and previous landlord checks - where applicable. However, in these times of economic uncertainty it is also advisable to seek a ‘home owner’ guarantor – especially for some sectors of the rental market.
Landlord and Employer referencing can tell you a lot about a person’s character and habits, and credit checks can tell you a lot about a person’s financial position - but as we all know this can change very quickly in this economic climate.
Even if the references are satisfactory, you will still need to ascertain any risk in letting the property to them. This is more difficult to judge and usually where a guarantor comes in. I usually ask for a ‘home owner’ guarantor (in addition to the deposit) if the tenant is under 30 (this is usually their parents), a student, in receipt of LHA or earns less than £20k. In my experience this is sufficient to prevent any problems arising during the tenancy. No level of referencing is 100% watertight - but in the event of a tenant going off the rails, a guarantor may step in earlier to resolve any problems on the basis they would want to reduce their own liabilities.
Deposits are also key to protecting your property against damages. All landlords will be aware that they are responsible for the maintenance of the structure and services to their property but it can be difficult to control how the tenant treats the property internally. Regular inspections should identify any issues early on but a deposit is the financial security that should cover the cost of any damages - caused by the tenant during the tenancy. In the rare event that the deposit doesn’t cover the damages you will still have the guarantor to fall back on.
It takes time, money and effort to follow these procedures correctly but good management involves high levels of skill and time commitment to minimize the risks associated with letting property. Sometimes it is simply more economical - when weighing up all the factors - to outsource the management to a reputable regulated agent. The benefit of outsourcing these management functions is a lifestyle choice that for many, definitely outweighs the costs.
# # #
Your questions answered by specialist Letting and Management agent Richard Pennack. Managing Director of iQ Property (Hull) ltd and a member of ARLA. Specialising in Residential and light commercial property Lettings, Management and Investments. www.iqpropertyhull.co.uk
Monday, 21 February 2011
Minimising rental voids - some helpful tips
How I minimise rental voids - by Richard Pennack (MD of iQ Property Hull Ltd)
Rental voids seriously affect a landlords bottom line - FACT. A rental void of just one month accounts for an 8.33% loss of your annual rental income. For many recent landlords this is the difference between making a profit or a loss from a property. Talk to any property investor who’s had problems making mortgage payments and there are two main reasons; 1) no rental income or 2) no cash reserves. Rental voids must, therefore, be avoided at all costs. In this article I outline several of the effective strategies I’ve adopted since I began letting properties in 2001.
Please remember that my properties are all mid range. My typical tenant profile is predominantly working couples, families,young professionals and retired couples. Some of the strategies outlined may be transferable to other market sectors but not all of them.
I will offer tips and show you how to keep your rental voids to an absolute minimum. In summary here are the keys points :-
1. Establish market rent for property type - Check with agents
2. Check rental demand before buying – pre-advertising
3. Market for just less than market rent
4. Arrange block viewings. Be time efficient, organise chaos, create urgency
5. Get prospective tenants bidding against each other
6. Agree Section 13 rent rises in principle before letting
7. Incentivise outgoing tenants to cooperate with viewings
Establish market rent
I look at Rightmove.co.uk or findaproperty to establish a rental baseline. Very simply, I enter the post code and look at all properties within a half mile radius. I always tick the include “Let Agreed Properties” box. I make a point of speaking to the agents and asking what the property let for. Occasionally they are guarded with this information but more often than not they are very open as they want my business. I’ve become very accustomed to listening to their sales pitches. Well worth it though to get a feel for the market. Occasionally I view their listed properties to fully understand what I’m up against. This affords an opportunity for me to sell mine over the competition.
Check rental demand before I buy – pre-advertising in local shops or newspaper
If I’m seriously looking to buy in an area I will look at every property for sale to establish the real values. I will ask all vendors and their agents how many properties are already let in the area. I will make a note of their selling price, calculate the cost to refurb to my standards (all of my properties look very similar internally) and work out the bottom line with them. This enables me to negotiate a decent price and to make sure I’m getting the best possible deal. If I’m on the verge of doing a deal I will ask the vendors if they mind me advertising their property to rent before I make a purchasing decision. If they agree I market the property via the internet (Advertise your property online for £69 - here). I explain to all callers that I don’t own the property yet but I am seriously considering buying it as a long term investment. I then suggest time-scales. I may even arrange viewings (see below). If I don’t get any calls the decision is easy, DON’T BUY. If I get lots of calls the decision is much easier.
Market for 5% (or £50 max) below than market rent
Advertising at £50 below market rents maximises the number of leads I receive. I often let the property for more than advertised though – see below.
Arrange block viewings. Be time efficient, organise chaos, create urgency
Most tenants struggle to do viewings in the daytime and so do I. When I started letting property the time wasters were the bane of my life. Nowadays I generally arrange block viewings at 7pm on a Thursday and 11am on a Saturday. If I have an existing tenant in situ I could offer them £10 to do the viewings or £20 towards a meal out if they want me to do them – my preference is the latter, if necessary. I explain to all tenant enquirers that I’m very busy and I only have these two time slots available for viewings. I also explain that demand for the property is very strong so they know to expect to see other people viewing at the same time as them.
Get prospective tenants bidding against each other
Just because I advertise for £50 a month below market rental value doesn’t mean that’s what I achieve. If I have lots of people that want the property and I want them as tenants I agree to call them back the following day. Remember, they’ve now witnessed the level of demand and they will know that my property is below normal market rental value. When I call them back I play the odds, i.e. I explain that I have several tenants interested, I explain this is probably because I’ve under valued the rent and I ask them to make me their best offer.
Agree rent rises in principle before letting
It’s always difficult to know whether to increase rents at the end of a tenancy. Will the tenants move out if you do is always the worry. For this reason I always try to negotiate what the rent will be increased by in 6 or 12 months time. I then contact my tenants two months before the end of the tenancy to see if they want to renew at the end of the term and I remind them at that point of the rent rise agreement. If they want to stay on I repeat this process. If they want to move out we discuss damage deposits, work required and viewings for re-letting.
Incentivising outgoing tenants to cooperate with viewings
As mentioned above, I can pay £20 to existing tenants to be out of the property when I do viewings. I also agree to pay them an extra £50 on top of their damage deposit refund if I re-let the property and move the next tenant in within a week of moving them out. This serves several purposes. A) it reminds them that I am holding their damage deposit and that I’m serious about re-letting quickly, B) it incentivises them to keep the place clean and tidy, C) they are far more cooperative with viewings.
All of the above processes generally mean that I rarely have more than a few days of voids between tenancies. Although this is not an exhaustive list these key points will help you minimise your voids too.
Visit us at iQ Property for more details or if you have property interests in Hull or east Yorkshire. iQ Property - Proactive and professional lettings, management and investments in Hull and Beverley. Arla registered.
Rental voids seriously affect a landlords bottom line - FACT. A rental void of just one month accounts for an 8.33% loss of your annual rental income. For many recent landlords this is the difference between making a profit or a loss from a property. Talk to any property investor who’s had problems making mortgage payments and there are two main reasons; 1) no rental income or 2) no cash reserves. Rental voids must, therefore, be avoided at all costs. In this article I outline several of the effective strategies I’ve adopted since I began letting properties in 2001.
Please remember that my properties are all mid range. My typical tenant profile is predominantly working couples, families,young professionals and retired couples. Some of the strategies outlined may be transferable to other market sectors but not all of them.
I will offer tips and show you how to keep your rental voids to an absolute minimum. In summary here are the keys points :-
1. Establish market rent for property type - Check with agents
2. Check rental demand before buying – pre-advertising
3. Market for just less than market rent
4. Arrange block viewings. Be time efficient, organise chaos, create urgency
5. Get prospective tenants bidding against each other
6. Agree Section 13 rent rises in principle before letting
7. Incentivise outgoing tenants to cooperate with viewings
Establish market rent
I look at Rightmove.co.uk or findaproperty to establish a rental baseline. Very simply, I enter the post code and look at all properties within a half mile radius. I always tick the include “Let Agreed Properties” box. I make a point of speaking to the agents and asking what the property let for. Occasionally they are guarded with this information but more often than not they are very open as they want my business. I’ve become very accustomed to listening to their sales pitches. Well worth it though to get a feel for the market. Occasionally I view their listed properties to fully understand what I’m up against. This affords an opportunity for me to sell mine over the competition.
Check rental demand before I buy – pre-advertising in local shops or newspaper
If I’m seriously looking to buy in an area I will look at every property for sale to establish the real values. I will ask all vendors and their agents how many properties are already let in the area. I will make a note of their selling price, calculate the cost to refurb to my standards (all of my properties look very similar internally) and work out the bottom line with them. This enables me to negotiate a decent price and to make sure I’m getting the best possible deal. If I’m on the verge of doing a deal I will ask the vendors if they mind me advertising their property to rent before I make a purchasing decision. If they agree I market the property via the internet (Advertise your property online for £69 - here). I explain to all callers that I don’t own the property yet but I am seriously considering buying it as a long term investment. I then suggest time-scales. I may even arrange viewings (see below). If I don’t get any calls the decision is easy, DON’T BUY. If I get lots of calls the decision is much easier.
Market for 5% (or £50 max) below than market rent
Advertising at £50 below market rents maximises the number of leads I receive. I often let the property for more than advertised though – see below.
Arrange block viewings. Be time efficient, organise chaos, create urgency
Most tenants struggle to do viewings in the daytime and so do I. When I started letting property the time wasters were the bane of my life. Nowadays I generally arrange block viewings at 7pm on a Thursday and 11am on a Saturday. If I have an existing tenant in situ I could offer them £10 to do the viewings or £20 towards a meal out if they want me to do them – my preference is the latter, if necessary. I explain to all tenant enquirers that I’m very busy and I only have these two time slots available for viewings. I also explain that demand for the property is very strong so they know to expect to see other people viewing at the same time as them.
Get prospective tenants bidding against each other
Just because I advertise for £50 a month below market rental value doesn’t mean that’s what I achieve. If I have lots of people that want the property and I want them as tenants I agree to call them back the following day. Remember, they’ve now witnessed the level of demand and they will know that my property is below normal market rental value. When I call them back I play the odds, i.e. I explain that I have several tenants interested, I explain this is probably because I’ve under valued the rent and I ask them to make me their best offer.
Agree rent rises in principle before letting
It’s always difficult to know whether to increase rents at the end of a tenancy. Will the tenants move out if you do is always the worry. For this reason I always try to negotiate what the rent will be increased by in 6 or 12 months time. I then contact my tenants two months before the end of the tenancy to see if they want to renew at the end of the term and I remind them at that point of the rent rise agreement. If they want to stay on I repeat this process. If they want to move out we discuss damage deposits, work required and viewings for re-letting.
Incentivising outgoing tenants to cooperate with viewings
As mentioned above, I can pay £20 to existing tenants to be out of the property when I do viewings. I also agree to pay them an extra £50 on top of their damage deposit refund if I re-let the property and move the next tenant in within a week of moving them out. This serves several purposes. A) it reminds them that I am holding their damage deposit and that I’m serious about re-letting quickly, B) it incentivises them to keep the place clean and tidy, C) they are far more cooperative with viewings.
All of the above processes generally mean that I rarely have more than a few days of voids between tenancies. Although this is not an exhaustive list these key points will help you minimise your voids too.
Visit us at iQ Property for more details or if you have property interests in Hull or east Yorkshire. iQ Property - Proactive and professional lettings, management and investments in Hull and Beverley. Arla registered.
Monday, 14 February 2011
Great news for small investors - 85% BTL returns!
Some fantastic news for investors, Kensington is the first lender to come back into the market with an 85% LTV product for some time. The criteria is that you must earn at least £25k and rental coverage has to be 120%. It's not the best interest rate at 5.99% for 2 year fixed, but for stacking deal it works wonderfully. Of course, it means cashbacks on some of our properties if you qualify for the product.
Here's the BUT....the rate is fixed for the first 2 years then hikes up quite a bit so have a plan to exit before the 2 year point if you take it The arrange ment fee is 3.5% which is also on the steep side. You can only have 0-3 properties with them so there is also a limit. At least it is the first step back to 85% LTV lending, others will follow. Either way its good news for the small investor!
Specialist property lettings, management and investment in Hull. Visit us at
iQ Property
Here's the BUT....the rate is fixed for the first 2 years then hikes up quite a bit so have a plan to exit before the 2 year point if you take it The arrange ment fee is 3.5% which is also on the steep side. You can only have 0-3 properties with them so there is also a limit. At least it is the first step back to 85% LTV lending, others will follow. Either way its good news for the small investor!
Specialist property lettings, management and investment in Hull. Visit us at
iQ Property
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