Blogs and advice on Residential Property Management London
When I first wrote my book “Property Magic” I wanted to come up with some simple guidelines which would help investors to minimise the risks of investing and maximise their returns. I observed that most investors, myself included, made some common mistakes which could easily be avoided by following these principles:
Always Buy from Motivated Sellers
Instead of looking for a property you like, and then negotiating with the seller to try and get a discount, I have a smarter strategy. Look for motivated sellers, who will be flexible on the price/and or the terms of the sale.
Once you have found a motivated seller you can decide if you want to buy that particular property. For a quick sale, the owner may sell it at a discounted price. The amount of discount will vary on their motivation and the general market conditions.
In a rising market you may be happy with a 15% to 20% discount. In a falling market you would want a bigger discount of 25% to 40%. This is to give you more of a safety buffer in case prices come down further.
There is a huge amount of uncertainty in the current property market. There are potentially lots of landlords looking to sell up early, over the next year or so.
The next 12-18 months could be the buying opportunity of the Decade.
Increasing rent can be a complicated issue, especially with your existing tenants. However, often landlords need to increase rent over time, to keep up with the level of inflation or cost of living.
It’s actually better to gradually increase rent rather than holding back for a couple of years and then increasing it by a significant amount- that will be a lot more difficult for your tenants to accept. So generally speaking, regular increases are normal and healthy.
For periodic tenancy contracts landlords can typically only increase rent once a year without the tenant’s agreement. It is therefore imperative to find the right time to discuss rent matters with your tenant as you will only have one opportunity per year. It is adviced to approach this situation with sensitivity, as telling your tenants that you intend to increase their rent costs could cause anxiety if not done carefully, even if you are within your legal rights to do so.
However, for fixed-term tenancies, which run for a set length of time typically ranging from six months to a year, landlords can only increase rent at the end of the fixed term, never during. The only exception to this rule is if there is a specific clause in your tenancy agreement that clearly states that you can increase the rent during the fixed term.
A good reason to review your rent may be if the popularity of your area increases, are there are a lot of new developments being built. These can be viewed as indicators that it is time to re-evaluate your rent prices.
You have certain rights and responsibilities when you are a tenant in privately rented property.
When renting a residential property through an AST the landlord is responsible for certain repairs to the property, including the structure and exterior of the property. The landlord is required to keep the equipment for the supply of gas, electricity and water in a safe and good working order.
The tenant must ensure the property is kept clean and carry out any minor maintenance repairs as well as any other responsibilities which may be stated in the tenancy agreement.
Everybody is talking about the impact of section 24. Is it another tax change? Section 24 tax change will not make a difference to the landlords with no mortgage. However, other landlords are likely to see a big rise in their tax bill and a big hit to their profits....
Extensions are a great way to raise a property value or increase rental income though landlords should be careful not to overdevelop or comply with local planning rules. There are points to consider when carrying out an extension at your property;
1. Understand market needs
The best time to extend is when you’re changing the property materially for a different demographic or market. For instance, if you have a two-bed house and you know the local market is short of three-bed properties. But be careful not to overdevelop the property so it is bigger than everything else in the street; some areas have a value limit. Houses in multiple occupation (HMOs) and flat-shares generally make more sense to extend than family homes, because if you add another bedroom the rent increase will be incremental rather than marginal. An extra tenant in an HMO will earn you an extra room’s rent, whereas an extra bedroom in a family home is unlikely to increase your rental income by more than 10-20 per cent.
Sections 122 and 123 of the Housing and Planning Act 2016, electrical safety standards, come into force on 25 October 2019. This means we are finally one step closer to the introduction of mandatory electrical safety checks in the private rented sector in England and will see actual regulations very soon.
An enabling power was contained in the Housing and Planning Act 2016 under Section 122 to allow the Secretary of State through regulations to impose responsibilities on private landlords to ensure that electrical safety standards are met in a property under their ownership, while a tenancy is in place. The Section also allows the Secretary of State to specify obligations that may be required of the landlord with regards to the frequency of checks and the expertise expected of any persons who undertake such checks.
Section 123 provides for the enforcement of any responsibilities introduced under Section 122 including the use of financial penalties and rights of appeal.
Following Royal Assent of the Housing and Planning Act on 12 May 2016, electrical and tenant bodies was established to provide recommendations on what the requirements for electrical safety in the private rented sector should look like.
Damp and mould are caused by excess moisture. Moisture in buildings may be caused by leaking pipes, rising damp in basements or ground floors, or rain seeping in because of damage to the roof or around window frames. In a newly built home damp can occur if the water used when the house was built is still drying out. The usual suspect for the cause of mould within your home is prolonged condensation. Continuous condensation problems are usually accompanied by black mould.
A home suffering from poor ventilation will be vulnerable to both condensation and mould problems. Mould moves through the air as miniature spores heading for damp, wet areas of the home such as bathrooms, basements and attics.
Recommended new safety measures to better protect private tenants by reducing the risk of electric shocks or fires caused by electrical faults were published for consultation 17 February 2018.
Five yearly mandatory electrical installation safety checks for all private rented properties and safety certificates for tenants, to prove checks and repair work have been completed, are part of a package of independent recommendations to improve safety.
The government is also consulting on how best to enforce the strengthened safety regime along with whether landlords who do not comply should face tough penalties of up to £30,000.
As well as making homes safer for tenants, electrical installation improvements benefit the landlord as a material improvement to their properties, helping prevent fires which could cause costly and significant damage. Tenants in the private rented sector face a higher risk of electrical shock and fires caused by electrical faults in their homes compared to social housing tenants.
To address this the government introduced new powers in the Housing and Planning Act 2016 to set and enforce tougher electrical safety standards in the private rented sector and established a working group of independent experts from industry and a range of other sectors to develop recommendations.