Parents considering beoming landlords

hawkeye9999

Come home tonight to a message from my parents, that a house opposite is up for Sale as it's been repossessed and they are seriously thinking about purchasing and renting out.


They are considering being fully managed via a agency for 12% monthly fee, as they don't want the tenant to know they live opposite.


Any Advice, or websites that would help.




Cheers

fishpond

Are your parents capable of DIY, are they also capable of walking over the road.
If the answer to those questions is yes, bin the agents, as they will cost more than 12% in the long term.
They also need to understand the law fully and comply with it, its not an easy life, but it has its moments being a LL.

Yorkie1

GM's post on new LLs

Pixie5740

Even if your parents use an agency, legally the tenants can ask for the landlord's contact details, not the c/o address but the actual address. Besides £3 to the land registry would give them that information.

agrinnall

hawkeye9999 wrote: »

They are considering being fully managed via a agency for 12% monthly fee, as they don't want the tenant to know they live opposite.

As pixie says this is never going to work if the tenant makes even a small amount of effort to track the LL. They could make it harder to find out if they started a limited company and used (for instance) an accountant's office as the company address then bought the house through the company, but even then their names would be recorded at Companies House.

Dr._Shoe

I suppose it depends on the tenant/landlord relationship. I used to work for my landlady and we've always had a good relationship. I know exactly where she lives but I'd never dream of going to her house.

Most tenants would be fine with having the landlord across the road. Moreover, it can give them the peace of mind of knowing that the opposite neighbours have a vested interest in making sure nothing happens to the house when they go away on holiday.

Pixie5740

I wouldn't like to live across the road from my landlord. Too much temptation for them to spy and interfere. A friend of mine lived in the same street as her landlord and whenever she had friends to stay at the weekend the landlord would burst into the houses and demand rent from the guests.

hawkeye9999

fishpond wrote: »

Are your parents capable of DIY, are they also capable of walking over the road.
If the answer to those questions is yes, bin the agents, as they will cost more than 12% in the long term.
They also need to understand the law fully and comply with it, its not an easy life, but it has its moments being a LL.

At the moment Yes.


I must admit I'm on here to find information to help me talk them out of the agency.


They were offered a list of extra insurance packages.

Pixie5740

Reasons not to use an agency:

1) Having to hand over 12% of the rental income for a fully managed service when your parents are capable of doing everything the agency can.

2) Using an agency won't give them the anonymity your parents are looking for because the tenants can find out where the landlord lives with relative ease.

3) letting agents require no specific training or qualifications.

4) Even when using a letting agency and paying them 12% a month your parents will still be ultimately responsible for protecting the deposit, gas safety certificates etc.

My advice would be for your parents to spend about £80 joining a landlord association and only using a letting agency to find a tenant, not a fully managed service.

fishpond

Pixie5740 wrote: »

Reasons not to use an agency:

1) Having to hand over 12% of the rental income for a fully managed service when your parents are capable of doing everything the agency can. If your parents can do it they will considerably reduce costs, and no doubt, do a far better job
If they feel a job is beyond them, they call in tradesmen to quotes then 1) They can choose who they use.
2) They are not paying top dollar and commision to the agent.


2) Using an agency won't give them the anonymity your parents are looking for because the tenant's can find out where the landlord lives with relative ease.

3) letting agents require no specific training or qualifications.Most of them come over as stupid and greedy

4) Even when using a letting agency and paying them 12% a month your parents will still be ultimately responsible for protecting the deposit, gas safety certificates etc. If the s*** was ever going to hit the fan, the agents will have disappeared/denying any responsibility.
Note:-As the buck stops at the LL, The LL may as well take full responsibility for their own destiny from the outset
My advice would be for your parents to spend about £80 joining a landlord association and only using a letting agency to find a tenant, not a fully managed service.

Also a good idea for LL to be in charge of any deposit in what ever scheme, as agents do not seem to keep up to date with the requirements (at least where I live). Once again it is the LL that gets it in the neck if it all goes wrong.Possibly leave the agent just to find a tenant, even though that can easily be done online if you do not mind showing people around the property. Can save you and the tenant a lot of money.

ognum

OP, this is really not the way to become a LL but it happens this way for many people.

Have your parents sat down and really worked through the figures and created a business plan, if not they need to in order to go into this with their eyes open.

12% is far to much to pay a management agent! all costs are negotiable! I pay mine 8%. I have worked through a few agents and would now never go with a national company. Find a small independent who's reputation is important to them both for tenants and LL. Tenants will seek out properties managed by good agents and reject the bad agencies.

Even using an agent this will involve work for them, they need to understand this. You need to be constantly on top of your agent not the other way round. I use an agent because I am out of the country a lot but also insist on being fully informed.

Do they understand the taxation of rental property, if not they need to.

I would not suggest they ditch the agent, just find a good one. I would never buy a property within spitting distance of my own home, I am happy for my tenants to know where I live, they have my mobile number etc but they need their privacy and I need mine.

So, a good business plan, a good agent, the right property, an understanding of being a LL and it's implications some back up cash so they can expedite repairs as needed and they will be fine!