First time landlord - Advice :)

bitsnbytes

Hi all,

I've recently decided to take the plunge and buy another property to let (as investment). The property is a 1 bed flat, fully furnished with new appliances and furniture and is ready to go on the letting market now. I was hoping for some advice from some of the gurus out here

I'm confused with the various options available - Introduction only, rent collection or full management. Currently the offers I've got are £400 + vat (£470) for introduction only and 9% + vat per month (no introduction fee) for full management. Do these figures sound reasonable?

Also, any advice for first time landlords? I'd love to hear

N79

Do some research - buy a book, read the housing acts 1988,1996 and 2004 and LL and T act 1986, understand your obligations, create a business plan etc. By all means pop back and ask your specific questions.

Don't enter this lightly. Simply asking a general question for advice on a forum does not constitute research.

As for your specific question: the figures you have seem reasonable but so much depends on what they include.

bitsnbytes

My OH has read a lot of documentation and has done research on this. However, theres no guidelines on any EA figures. Hence the question. Also, if we get into a contract with one estate agent, can we switch to another one if we are not happy with the agents work?

The main concern we have is collection of rent since neither of us have any experience in legal matters. My OH has read what can be done but is not comfortable handling any of them. The estate agent that offers full management for 9% says they will make use of their legal team if the rent is not paid, however we will be charged the legal fees. Not comfortable with this either. The other option is indemnity insurance which I believe costs £80 + vat for 6 months which says they will cover us if the rent is not paid. However haven't done much research into this at the moment. Any advice?

tbs624

N79 wrote: »

Do some research - buy a book, read the housing acts 1988,1996 and 2004 and LL and T act 1986, understand your obligations, create a business plan etc. ...

Good advice N79 - just noticed a possible "fat finger" typo- should be LL & T Act 1985. Also add Protection From Eviction Act 1977,
The Gas Safety (Installation and Use) Regulations 1998, The Unfair Terms in Consumer Contracts Regulations 1999 ........

Bitsbbytes - join one of the national LL Associations (or a local affiliated one) - membership fee is tax deductible,as is the fee for Tessa Shepperson's LandlordLaw site (she's a LL& T specialist solicitor). They can walk you through non-payment of rent scenarios and how to deal with it, as well as provide all manner of other support and a means of keeping up to date with LL & T law & regs.

The most important part is the initial checks made on tenants prior to any letting: certainly if you want rental insurance you would have to have specific credit/fraud checks done on the tenants first
Check whether there are any comments on your LA here www.allagents.co.uk and remember that currently it is not necessary have to have any specific training or qualifications to set up in business as a LA.

You may find it useful to use one who is at least signed up to a code of practice ARLA or NALS etc

Check any LAs small print very carefully - not just their proposed contract with you but also their contract with the tenants. Pay particular attention to what they say about contract renewals. LLs often end up with a void period because a LA has appalling business practices and their ways of dealing with tenants are less than professional.

macaque_2

bitsnbytes wrote: »

Hi all,

I've recently decided to take the plunge and buy another property to let (as investment). The property is a 1 bed flat, fully furnished with new appliances and furniture and is ready to go on the letting market now. I was hoping for some advice from some of the gurus out here

I'm confused with the various options available - Introduction only, rent collection or full management. Currently the offers I've got are £400 + vat (£470) for introduction only and 9% + vat per month (no introduction fee) for full management. Do these figures sound reasonable?

Also, any advice for first time landlords? I'd love to hear

Good for you. Here are few dos and don'ts.

Do make sure you keep the property in excellent condition. Tenants like new white goods and freshly decorated homes.

Do make sure that your rent is competetive and do not try to put up the price annually. We are facing difficult times and the rental market will weaken considerably. If you are greedy, you will end up with long void periods.

Do not get angry with your tenants if they fail to keep up with payments. Tenants can lose their jobs just like everyone else.

Do remember that your property is the tenant's home. Do not visit them without prior approval. Under no circumstances enter the property without their permission.

Do remember that the tenant becomes part of the local community when they rent your property. Do not give the tenant notice to quit other than in exceptional circumstances. Let the tenant decide when the contract comes to an end.

Do remember to know your place. You are a service provider and the tenant is your customer. Always treat the tenant with respect and never refer to him or her by their first name unless thay have given you express permission.

N79

tbs624 wrote: »

Good advice N79 - just noticed a possible "fat finger" typo- should be LL & T Act 1985.

Yup a typo. I agree with all your others as well but I thought that wading through the housing act in all its various forms would be enough to put of any non serious LLs (OP I'm not saying that you are a non serious LL).

Not so sure about being called fat though.....:D

mrsmick

Hey all. Newbie here, recently been screwed over by a tenant so had to comment on this one!

Be VERY VERY careful. Me and my friend bought a property together with the intention of living in it for 2 years and then reassessing the situation. He fell madly in love and moved out after about a year, leaving me there on my own, but he still paid his half of the mortgage. Financially this became a struggle for him as he was paying for two properties. Basically he pressured me into moving out and we rented the property via an agent.

At no point did the agent mention landlords insurance or anything else really that would have helped us. They rented my property to a guy who quit his job as soon as he had the keys in his hand and as such I have no received a penny since and I am now stuck with paying the mortgage there and paying to live somewhere else. The property has now been on the market for 13 months, with the tenant in situ since January. Apparently that is illegal but I guess the agent didn't think to tell us that either.

In addition to paying for this guy to live in my property I am also being stung for court fees, bayliffs fees etc. I have been assured that we can go to the high court and claim for the monies due to us as well as costs, but sadly you can't get blood out of a stone so at present I am about £4000 down and there is not much hope of me seeing a penny of it.

Sorry for the rant but this situation makes my blood boil. I guess all I'm trying to say is be careful!!

Bungarm2001

I am curious...why does the OP want to go into what is a very dodgy market at the moment? Do you live in an area where demand for rented property is high and along with that the rental income is high too? If so, can you see this happy state of affairs to continue indefinitely?

You can read up on every bit legislation referring to the housing act known to mankind. You can eat breathe and quote it ad infinitum. Add on to that all the latest and upcoming legislation/registration/HSSRS rules and think you are well prepared to take on this kind of 'job'.

Please believe me, you aren't.

Finding a good trustworthy LA who won't either rip you or your tenant off, or tie you up in an unbreakable i.e. costly contract is the very least of your worries. Whether they charge you 9 or even 15% management fee is neither here nor there. It's the quality of the work they do for you that counts.

Read the tales of woe on here from various small time LL 's (don't mean 'small time' to sound insulting...apololgies if it does) For every one you read I wouldn't mind betting that there are many others nodding their heads and can relate similar horror stories. I have absolutely no doubt also that there are many small LL's who have fallen foul of many things, including professional tenants and wished they had never been tempted to play at LL'ding, and have never actually made a penny out of it.

Think again about this..think long and hard. If you are just looking for a bit of variety in life, I'm sure there are many other ways. Personally, I would go and buy meself a nice fast new motorbike. MUCH more fun

bitsnbytes

Bungarm2001 wrote: »

I am curious...why does the OP want to go into what is a very dodgy market at the moment? Do you live in an area where demand for rented property is high and along with that the rental income is high too? If so, can you see this happy state of affairs to continue indefinitely?

Well we purchased the property as an investment and are currently on a repayment mortgage. We can afford 2 mortgages even if the property is not rented out (however other spending has to be very frugal). If we can get a decent rental to even cover part of the mortgage it's a bonus. The rental market seems to be good out here and we do see 'To Let' boards coming and going rather quickly.

Bungarm2001 wrote: »

You can read up on every bit legislation referring to the housing act known to mankind. You can eat breathe and quote it ad infinitum. Add on to that all the latest and upcoming legislation/registration/HSSRS rules and think you are well prepared to take on this kind of 'job'.

Please believe me, you aren't.

I agree! Theory is very different from what one can encounter in the real world of letting. However, said that one has to start somewhere

Bungarm2001 wrote: »

Finding a good trustworthy LA who won't either rip you or your tenant off, or tie you up in an unbreakable i.e. costly contract is the very least of your worries. Whether they charge you 9 or even 15% management fee is neither here nor there. It's the quality of the work they do for you that counts.

Our initial thoughts are to go with introduction only and then take the landlords insurance on top of it to cover rent. We plan to manage the property ourselves

Bungarm2001 wrote: »

Read the tales of woe on here from various small time LL 's (don't mean 'small time' to sound insulting...apololgies if it does) For every one you read I wouldn't mind betting that there are many others nodding there heads and can relate similar horror stories. I have absolutely no doubt also that there are many small LL's who have fallen foul of many things, including professional tenants and wished they had never been tempted to play at LL'ding, and have never actually made a penny out of it.

I don't mind being called "small time" but if we do get put off by the negative aspects we can never climb up the ladder. Not saying everything will be smooth and possibly may also encounter a lot of problems, however I'd rather have that than giving up without trying.

Plan to build up a portfolio of around 3-4 properties so got to give it a try sometime and have to be "small time" at the start

bitsnbytes

Thanks tbs624, excellent tips :T

tbs624 wrote: »

Bitsbbytes - join one of the national LL Associations (or a local affiliated one) - membership fee is tax deductible,as is the fee for Tessa Shepperson's LandlordLaw site (she's a LL& T specialist solicitor). They can walk you through non-payment of rent scenarios and how to deal with it, as well as provide all manner of other support and a means of keeping up to date with LL & T law & regs.

Thanks for that, how do I go about finding a local association?

tbs624 wrote: »

The most important part is the initial checks made on tenants prior to any letting: certainly if you want rental insurance you would have to have specific credit/fraud checks done on the tenants first

Most of the agents we have spoken to, do carry out a credit and reference check on the tenant. Will this be sufficient for the rental insurance?

bitsnbytes

That's very unfortunate mrsmick, hope it all works out for you. Is it not possible to evict the tenant? Considering that he quit his job, it wasn't unforseen

mrsmick wrote: »

Hey all. Newbie here, recently been screwed over by a tenant so had to comment on this one!

Be VERY VERY careful. Me and my friend bought a property together with the intention of living in it for 2 years and then reassessing the situation. He fell madly in love and moved out after about a year, leaving me there on my own, but he still paid his half of the mortgage. Financially this became a struggle for him as he was paying for two properties. Basically he pressured me into moving out and we rented the property via an agent.

At no point did the agent mention landlords insurance or anything else really that would have helped us. They rented my property to a guy who quit his job as soon as he had the keys in his hand and as such I have no received a penny since and I am now stuck with paying the mortgage there and paying to live somewhere else. The property has now been on the market for 13 months, with the tenant in situ since January. Apparently that is illegal but I guess the agent didn't think to tell us that either.

In addition to paying for this guy to live in my property I am also being stung for court fees, bayliffs fees etc. I have been assured that we can go to the high court and claim for the monies due to us as well as costs, but sadly you can't get blood out of a stone so at present I am about £4000 down and there is not much hope of me seeing a penny of it.

Sorry for the rant but this situation makes my blood boil. I guess all I'm trying to say is be careful!!