Blogs and advice on Residential Property Management London
Thinking of purchasing a buy-to-let property? Prospective landlords need to familiarise themselves with the term ‘annual rental yield’, which is the gross amount of rent an owner is likely to receive over the course of a year. If you’re new to buying-to-let, working out rental yield is not too taxing. All you need to do is some straightforward sums.
It’s vital that a landlord has a comprehensive inventory with supporting photographs and videos at the end of a tenancy, especially when it comes to assessing what damage caused by the tenant is unreasonable and what might be considered ‘fair wear and tear’.
Wear and tear is a fairly simple principle but can cause landlords a great deal of trouble unless they understand how it differs from wilful or negligent damage caused by the tenant and what level of costs can be proposed at the end of the tenancy.
A certain amount of wear and tear is unavoidable in rental properties. Over time as tenants live in homes, some damage will occur. This isn’t a result of abuse or neglect by your tenants, meaning they can’t be held responsible for it. However, sometimes tenants do cause an unacceptable level of damage to furniture, fixtures and fittings which they’re liable for under the tenancy agreement.
What is involved in ongoing management and maintenance of a rental property?
Not all property investors are interested in being a landlord. The thought of actually dealing with all that property maintenance and tricky tenants can be very tricky The fact is, not everyone is suited to being a landlord. This can require immense amount of patience and perseverence.
As a landlord, you are constantly on call, you may find yourself dealing with a blocked sink on a Sunday morning. It is not for everyone.
There are ongoing tasks to take care of on a day to day basis. Once a tenant has moved into a property and all regulations are met;
You need to collect the monthly rental payments.
Manage repayments should your tenant fall into arrears.
Handle and respond to all maintenance enquires quickly and in a professinal manner.
Update all safety certificates as and when necessary.
Carry out regular property inspections.
A buy to let property investment is right for you of you prefer investments that are more tangible than stocks and shares.
Are willing to tie up your money for a long period of time
You accept that property prices can go down as well as up
You are willing to take the risk that you may not earn a profit on your investment
You understand and accept the additional risks that go along with borrowing money to buy a property
You understand and accept the costs and time involved in owning and running a property and the impact that this will have on your potential return.
When you become a landlord, you’re effectively running a small business and this comes with important legal responsibilities.
The main purpose of an inspection is to evaluate the overall condition of a rental property; specifically to check if everything is in good working order and reasonable state, both the interior and exterior. It’s also the perfect opportunity to ensure your tenants are behaving in an appropriate manner.
Inspections are typically conducted on a quarterly basis, but often reduced to bi-yearly after frequent positive inspections are conducted for the same tenants.
While it’s important to make regularly inspections, it’s equally as important not to make too many inspections as it could be deemed as harassment. In most cases, there isn’t a reason to make so many inspections, unless there are genuine repairs and maintenance issues that need attention.
What are your expectations from tenants; contacting you when there’s an issue, always paying on time, respecting your property and the neighborhood. Finding great tenants can be easy, but once you lease your property, you need occupants who look after your property as if it is their own, you never want to see them move out.
For landlords, the turnover of tenancy period comes with expenses that range from cleaning costs to possible repairs. Loss of rent especially if you are relying on rental income to pay your mortgage, utilities, and estate agents fees can all add up.
Reducing or eliminating your turnover expenses by keeping good tenants longer could help you become a more profitable landlord. There are many advantages, including:
Having consistent rental income
Spending less time and effort preparing the unit for rent
Avoiding the uncertainty of bringing in a new tenant
Ensure to lease your property to the right person.
It is assumed that any arrears owing at the point of the sale of a flat will pass to the incoming leaseholder. This view is incorrect and can present landlords with a debt that may be difficult to recover, once the outgoing leaseholder has moved on.
Who is responsible for service charge arrears?
In most leases, service charges will be payable in advance. The owner at the time that the charges are due is the only party liable to pay those charges.
Say for instance the lease requires the service charges to be paid annually, half yearly or even quarterly in advance on the 1 January in each year. That leaseholder has sold their flat and the completion date is fixed for 14 January, just two weeks after the charges are due. Commonly, the outgoing leaseholder or his solicitors will tender payment for just the first 14 days leaving the incoming tenant to pay the remainder – it is after all they who will take the benefit. Where this happens the incoming leaseholder can decline to pay the remaining balance of the 1 January charges and accept only the charges accruing on the next year/half year or quarter, depending upon the lease, as they were not the lessee at the time of the demand and thus have no liability to pay that charge.
Experience shows that photographic and video evidence within your inventory can be vital in dispute cases.
Once you have embedded your photos or videos into the inventory, as well as signing it yourself, don’t forget that your tenant also needs to sign it to confirm their agreement.
Why should you use photographs and video to support the written inventory
There are still landlords, managing agents and inventory clerks who choose not to use photographs in their inventories. This may well be because they’ve never had an inventory issue arise. It is bet to have it and not need it than not have it when you need it. Visual content is more important than ever.
As a landlord, you will be aware that good quality photographic and video evidence is vital to help you demonstrate the extent of any damage or deterioration to your rental property during, and particularly at the end of a rental period. If you feel that it is reasonable to make a claim at the end of the tenancy, for things like cleaning, damage, or redecoration, then photographic or video evidence will assist in your negotiations with the tenant. In the unlikely event that you and your tenant cannot agree on the proposed costs and you need to use an alternative dispute resolution service, you will need to provide supporting evidence to an impartial adjudicator to support your claim.