A landlord does have his own rights and owning a property with tenants can cause a lot of stress. As an owner, one very important question should be asked; Do I manage the property myself or employ the services of a letting agent?
A letting agent will know the process inside out, from marketing the property, leasing and finally occupancy. A professional firm will know what is best for the property and be skilled in all aspects of renting, and they will follow through up to the day of occupancy. There are a couple of important advantages in having an agent.
Firstly they will carry out a professional screening of all suitable tenants. This will include credit checks and a criminal background check, employment verification and any previous rental records. Secondly they will know what to do if it becomes necessary to evict a nightmare tenant. A problem tenant may know exactly how to use the legal system to their advantage if the landlord is inexperienced.
Apart from the two important tasks, a letting agent will also advertise and show the property to all the prospective tenants; confirm the transfer of all utility bills into the new tenant’s name; provide the lease agreement and obtain proper signatures before the tenant moves in; collect and account for the rents and deposit; arrange the first and final walk through, making note of the property condition, prepare a security deposit statement and provide a statement each month of all income and expenses plus they can give a full recap at the end of each year for taxes.
For a new landlord who will know the importance of landlord insurance but has never used a letting agent before, finding a decent one can seem like an extremely daunting job. Metropolitan and suburban areas are plentiful with agents all of whom want the business. As with most things, the best way to find a good agent is word of mouth. Browsing the web is another good idea and most established agents will have their own websites. The most important thing is to take time to shop around and always ask a lot of questions to each agent. Be clear on the agents charging structure including what is included in the fees and what isn’t. Most agents will charge a percentage of the monthly rent of the property as the lettings fee. Sometimes this will include a small fee for collecting the rent, but more often than not the rent collection will be charged on top. Unless a landlord knows what they are doing, having the services of a letting agents will be money well spent.
Landlord rights are not be the most exciting thing in the world but there is no disguising the fact that they are certainly one of the most important. The increasing number of people who are deciding to rent their house because it is very hard to sell a property in the current climate means they will be entering the world of landlords without knowing a great deal about their rights as a landlord.
Once a lease has been signed with the tenant, it is the right of the landlord to collect the first month’s rent and the security deposit from the tenant. The landlord has the right to decide how much the security deposit will be. While the amount of security deposits asked for by the landlord could range from one week to three month’s rent, in general a lot of landlords will only ask a tenant for one month’s rent as a deposit.
A landlord is well within their rights to deduct money from a tenant’s security for a number of reasons which include the tenant or their occupants causing damage to the property due to abuse or neglect. If the tenant moves out and still owes rent or have not paid any utility bill, the bill will be paid using the security deposit with the remainder being given back to the tenant.
It is also the right of a landlord to receive full rent payment from the tenant each month on the date stated on the lease agreement. However, if it is a fixed term tenancy, the rent cannot be increased until the lease has expired. If the agreement is a week to week or month to month contract, the rent can be increased at any time as long as the tenant is given written notice of the increase.
Owning a rental property and not buying landlord insurance can be a very risky mistake as there are so many things which can go wrong. A private landlord will generally be exposed to many more financial risks compared to the average home owner. The good news is that landlord insurance will give a much wider range of coverage such as protecting the landlord from any loss of rent, any loss from tenant lawsuits (landlord liability insurance), and damage to the property by the tenant. Owning a rental property can be highly profitable but it can also be highly expensive if insurance is ignored.
As a landlord, choosing the right tenant will eliminate a lot of headaches in the future. Landlords can now obtain search reports that enable them to screen all potential tenants by providing them with a background check on their potential client. In fact checks are just as important as having landlord insurance. No landlord wants a bad tenant and it is vital that they are found out before any contract is signed. A landlord wants a tenant who will pay the rent on time, look after the property and stick to the rules of the rental agreement.
For some landlords, screening a tenant may seem like a lot of hard work but in truth it is quite simple as long as they know the right steps. A landlord will often employ the services of a third party to conduct the background check on prospective tenants. The findings of this check will give a good indication of the tenant’s character which is based on records and past behaviour.
The background check will also help to verify that the applicant is who they say they are. With identify theft on the increase it is vital to know who the tenant is. The background check will reveal if the tenant uses any aliases and whether they are using their own details. If any other people are linked with the same details, it may be an indication of identity theft.
The landlord will use the results of the background check to confirm the applicant’s current address and who the property owner is. If a renter has been having problems with the current landlord, they may put down a relative or a friend’s address as their current place of residence. The background check will help to confirm the all the information on the application. A background check will also help to minimize the risk of evicting a tenant. The eviction process can be a lengthy one and when evictions are needed the landlord will quite often incur a financial loss.
Criminal activity will often be the deciding factor when a landlord makes a decision on approving the tenancy application. Renting to a tenant who has a criminal history may create problems for a landlord in the future. If a tenant with a criminal record were to create problems for other tenants in a property, the landlord may find themselves in the middle of a legal situation.
For generations people have aspired to be a home owner. However, in the current climate evidence shows it may be a better idea to rent. In the past there was an expression of horror when anyone admitted to renting a property as though a swear word had been uttered.
To get on the first rung of the property ladder today, requires a minimum deposit of something in the region of £20,000 and unless a young couple can rely on their parents for help, it will be almost impossible for them to buy a new home. Both the recession and the stagnation of the housing market have meant that during the past three years the United Kingdom is increasingly becoming a nation of renters. Property prices may well be slowly falling, but they still remain out of the reach of the average wage earner, particularly now that the building societies and the banks have both tightened up their mortgage regulations.
For generations, everyone was told that an Englishman’s home was his castle. Even the Prime Ministers since the late 70s have all told us how home ownership should be the ultimate aspiration of anyone who seeks both social and financial stability. Margaret Thatcher had this belief when she introduced legislation in the 80s making it easier for anyone to buy their own council home. At the time she compared the business of government to running a household.
There was an attraction to owning a home as it gave a person a stake in something bigger as well as a sense of self respect. We were even encouraged in the love affair with bricks and mortar by endless programmes on the television that tempted us to greater excesses with the allure of home improvements. Times have changed and renting is not the taboo that it used to be. There are those who still believe that renting is throwing money down the drain as there is no return on it, or being in the trap of paying for rent and bills and not having any money to save for a deposit to buy a house.
On the plus side, the landlord who will have landlord insurance will be responsible for all repairs, maintenance and decorating. It is also much easier to move when renting compared to owning the house. Unless the current climate changes, renting is set to become even more popular.
For landlords providing rooms in properties of multiple occupations a games room will provide a relaxed environment to either an individual or a whole family using the room. Since this type of room is essentially meant to be used to unwind, the choice of colours and design used should not be too formal.
A games room needs be convenient for everyone to use so it is important that the room has a spacious feel. A congested room will only make the room look cluttered and take away the leisurely feel. If the games room is going to have a sports look, it will more than likely be more expensive so always make sure your landlord insurance will cover the merchandise in the room.
If it is a big room, a pool table can be the focal point while a mini fridge to keep the drinks cool and a jukebox will keep the music flowing. A jukebox will also give a nice retro feel to the room, and the retro feel can be added to with some neon lights. Anyone who loves sports or films will enjoy watching much more if a projector is installed in the room. A projector is perfect because it will not occupy too much space. If the room is smaller a football table instead of a pool table can be added to keep everyone entertained.
While designing a games room, the furniture used will make a difference in the overall appearance. Depending on the size of the room, a sofa with leather furnishings could be chosen with a few chairs in the corner. Maybe a cosy little bean bag chair which will come in useful if the room is being used after a hectic day’s work or a tiring game. For anyone who loves to play video games a couple of leather recliners will add style and enjoyment. It is also a good idea to have a small table to keep any snacks and drinks safe during the game sessions.
An array of accessories can be added to a games room which will make it visually pleasing. For anyone who loves creativity, try making make a collage of a favourite sport which can be changed regularly and try adding a retro feel to the room by adding some posters of yesteryear, supplemented by the use of shirts in colours of a favourite team. A well decorated games room is essential to create a relaxed ambiance. The main aim of the room is comfort. A games room which is visually appealing will go a long way to help both family and friends unwind.
A basement or cellar is notorious for being a damp, musty place. But by waterproofing the room it can save money in the long run. If there is an existing leakage problem the root cause will need to be found. Instead of replacing both the walls and the floor there are a few waterproofing tips which will help find and then repair the cause ensuring the basement can be kept dry.
If the house is to be let then the owner will make sure that the basement is protected as they will not want to claim on their landlord insurance policy.
A lot of leakage problems emanate from water seeping through the walls and then seeping into the joints where the walls and floor meet. Small cracks /chips and any other damage (no matter how small) to the concrete will be an open invitation to water. Start by cleaning and repairing any damaged areas by patching the concrete. When all of the cracks have been repaired, seal the concrete. This is done by simply painting sealant onto the interior side of the concrete.
Hydrostatic pressure could be a problem for some homeowners even if the concrete has been sealed. It is important to have a good drainage system in place. Drainage problems will require a lot more work than simply painting on a sealant; but remember when it comes to waterproofing it is very important that a drainage system is in place.
Check and make sure that the gutters are not blocked and the drainpipes are working properly. All the drains and pipes should be checked at regular intervals for blockages. The best time to do this is just before winter. Extending the drain spout so that any rainwater is brought farther away from the house will help with the waterproofing. Also check the sump pump (if there is one) to make sure it is in good working order.
A lawn which slopes towards the house will invite water drainage problems. A good drainage system will include having the lawn graded properly. It may be necessary to change the lawn so the slope goes away from the home. This will require building the ground up so that the area closest to the house is the highest.
Another waterproofing system involves sealing the concrete walls except the last three inches closest to the floor and then putting in a good drainage system which will collect and channel all of the water out. A system like this is not very difficult to install and can be easily hidden by building materials.
As the welfare reform proposals approach implementation, a national newspaper has joined in the argument. Listening to the supporters of the Coalition Government, and in particular Lord Freud, hardly anyone will be affected by the cutbacks in housing benefit. Only those who live in mansions at taxpayers’ expense should be worried and the Governments assertion that £21,000 is more than enough Housing Benefit for anyone does seem fair.
However an investigation by the Sunday Mirror purports to shows that they are way off with this prediction. The results of their investigation conclude that hundreds of thousands of the most disadvantaged people in Great Britain will have their lives wrecked.
Some will have their incomes slashed while some others will only lose a few pounds per week, that may not sound too bad the report says, but they are a few pounds that they can not live without. Families who are already on the breadline will face losing their homes because of savage changes being driven through by the coalition partners, according to the paper.
The Sunday papers exclusive which it claims is calculated on detailed research gives details of a mother who has a disabled daughter and who will be left with just £40 a week for food and other essentials after her housing benefit is cut by over 50%. Another example shows a family of four who will lose almost £100 per week, leaving them below the poverty line.
The findings are much different to those of the Prime Minister David Cameron who claims that it will not be necessary for anyone to lose their home. Campaigners strongly disagree saying it will effect over 900,000 households many of whom will have to leave the area they have lived in all their life.
Landlords with landlord insurance are tired of being portrayed as the bad boys in this argument and have already said they have no intention of reducing rents to help a tenant whose shelter is being compromised by Government cuts. What is for sure is that the welfare system shake up will see residential landlords with a big part to play in providing homes for millions of people in the UK.
As landlords continue to look for signals in the letting sector to guide them in their business decisions over the next few years, once more the picture in the industry becomes confused.
Just as the pundits are predicting a double dip for the property market, one of the UK’s leading lenders reports a growth in selling prices for the month of October. The Halifax bank reports that prices in October show a marked increase of 1.8% on the September figures. Somewhat of a surprise as most experts in the industry were expecting a lower sale figure which would reaffirm their thoughts that the market was back in a slump.
Year on year figures were not so good. Although there was an increase of 1.2% compared to last October, this was the smallest monthly year on year increase for some time. In fact December 2009 was the last time a year on year month provided a lower increase.
With mortgage providers across the nation reporting lower levels of take up month on month, the figures have really bamboozled the experts. Although the September drop in house prices was massive (around 3.7%) and most people in the business did not expect the same drop again, the figures are definitely better than most envisaged and are at least encouraging.
For landlords looking to extend their portfolio while house prices were low and rental yields showing every sign of going up for the foreseeable future, the figures will definitely throw a spanner in the works. Should they be on the lookout for cheap landlord insurance to protect any new properties they buy now, or should they ignore the September increase and gamble on the price of property falling even further as the austerity measures bite.
The availability of buy-to-let mortgages, although still not great has improved somewhat over the last few months, aided by new lenders coming into the market. There is no doubt also that tenants are in multiple supply at this moment in time, so what should a landlord do? If the market is to believed, then landlords in and around the capital can look to extend their portfolios with little worry, if they have the funds in place. Landlords elsewhere may be wiser to adopt a wait and see policy.
It seems that the ongoing initiative by government agencies to make our home environment ever ‘greener’ could impact on the pockets of some residential landlords.
As Chris Huhne, the minister for energy and climate change, lays down the concept of his ‘New Green Deal’ some landlords will be fearful of what lies in store for them.
The New Green Deal aims to increase the nation’s perception of energy consumption and to increase the insulation in all the UK’s 26 million homes. With the aid of big business the government is planning to induce homeowners across the country to take out ‘pay as you save loans’ to facilitate the conversion of properties into super insulated dwellings.
It is envisaged the loans could be up to as much as £10,000 and will allow householders to purchase energy saving products such as loft insulation, wall insulation, double glazing and different types of renewable energy. The government hopes that companies such as giant supermarket chains as well as national DIY stores will fund the project as the homeowner pays back the loan from money saved on fuel efficiency.
The one blot on the landscape for the scheme is properties owned by residential landlords. The architects of the plan envisage a poor take up by landlords because as they don’t actually pay the energy bills for the property then they will not be concerned about the fuel savings.
On the other hand a landlord with half a dozen properties will be faced with logistical problems sorting out loans for the properties and having the work carried out. It is a problem.
It is widely thought that the new scheme will include legislation to force landlords to install energy saving insulation at the behest of tenants or the local authority if they deem the property badly insulated.
Not surprisingly landlords who already have to comply with lots of compulsory legislation will be worried about anything more that is compulsory. Most landlords will be hoping the scheme will be more advisory where there is an option to purchase such as the case with landlord insurance. All landlords accept insurance cover is vital but know it is not a legal requirement.
Whatever the case, landlords will know their fate soon as the initiative should be in place inside the next five years.