Advice sought for soon to be landlord

Dee140157

Hi

I have been dipping in and out of this thread to try and learn what is good advice for a new landlord.

To set the scene, I am soon to marry and fiance has a house with small mortgage. He is currently on a fixed rate mortgage for 2 years, which runs out a month afterwe plan to start the let. His house is in bad state of repair, but we have a team of builders coming in (ouch) to do it up. New wiring throughout, new central heating, kitchen, wired smoke alarms, bathroom and all safety issues addressed (banisters dodgy etc at moment.) Loft and cavity wall insulation too. Would fly through any hips if we were to sell. It is a 3 bedroom house which we plan to let as whole not as individual rooms. It is in a nice area in Kent - Hythe, so if anyone local has suggestions of expected rent that would be helpful.

I know you need to let the mortgage company know if you intend to let, but we plan to redeem the mortgage about 1 month after it is let out when his 2 year fixed rate comes to an end. Is it worth informing them?

Secondly as a new landlord I am aware how easy it would be to fall prey to dodgy tenants so plan to use a letting agent. But I have no idea of the sorts of fees they charge and what I should expect of a decent letting agent. Can someone point me in the right direction.

We plan to let it unfurnished but with a fitted cooker (new) a fridgefreezer, washing machine and dishwasher. The last 3 are in good nick but not new. We have a tumble dryer too but were unsure whether to leave this.

And is there any other off the cuff advice you can give me.

Sammy85_2

Hiya.

No idea about rent in your area personally, but check out rightmove and some local agents websites, should give you an idea about what is being asked for houses in your area, but be prepared to negociate, especially if competition is tough.

Our LA charges 12% + vat although we only pay 11% due to having several properties renting through them. Ask for a discount, always worth a shot. Go to a few agencies, ask lots of questions, choose wisely (they can be your best friends or worst nightmare!!)

We only leave a cooker and hob in our houses, no white goods. I personally wouldnt leave anything else in there if i were you.

If you're putting white goods in that are not new consider how long they will last. If it breaks down or dies completely your tenants will want it fixing or a new one and you have no choice but to sort it straight away (whether you have the cash available for it or not!). Imagine if its a family - they probably use the washing machine daily so an older one might not last long, and if they have to use a laundrette whilst waiting for you to fix it you could be liable for the costs as they have paid you to rent a property with this item installed...


As for your mortgage company i would always inform them to stay legal. You'll probably find you'd be breaking the terms of your mortgage if you dont tell them.


Good Luck,
Sammy

Spire128

Hi

I agree with what Sammy85 has said, I have been a Landlord for the last 10years or so, I let my properties unfurnished, not even a cooker in there and absolutly no white goods.

Don't forget that anything you provide in the house you are respnsible for maintaining in a safe working condtion and as Sammy85 say's if anything breaksdown you have to get it fixed.

I would suggest that you get your studying hat on, and learn about the rules and regulations surrounding beeing a Landlord, as even tho I think your decision to use a letting agent is the right one the buck still stops with you, so in my view it always helps to know if the letting agent is on top of there job and to do that you need to know what they need to .

poppy10_2

Spire128 wrote: »

I let my properties unfurnished, not even a cooker in there and absolutly no white goods. .

That will really restrict your market. Most renters expect a cooker at the very least, they won't want the expense of buying one and getting it professionally fitted if theya re only staying for 6 -12 months.

Spire128

poppy10 wrote: »

That will really restrict your market. Most renters expect a cooker at the very least, they won't want the expense of buying one and getting it professionally fitted if theya re only staying for 6 -12 months.

I would not dissagree with you, but on the other hand I have never had any problems finding Tennants.

chappers

Spire128 wrote: »

Hi

I agree with what Sammy85 has said, I have been a Landlord for the last 10years or so, I let my properties unfurnished, not even a cooker in there and absolutly no white goods.

Don't forget that anything you provide in the house you are respnsible for maintaining in a safe working condtion and as Sammy85 say's if anything breaksdown you have to get it fixed.

I would suggest that you get your studying hat on, and learn about the rules and regulations surrounding beeing a Landlord, as even tho I think your decision to use a letting agent is the right one the buck still stops with you, so in my view it always helps to know if the letting agent is on top of there job and to do that you need to know what they need to .

That is true but you do restrict your self to the renters who already have those goods, there is a premium to be charged also for providing appliances.
Having said that renters with all of those appliances themselves are more likely to want a longer let than those without.
With regards to letting agents do as much research as you can they range from very very poor to ok in my opinion an outstanding agent is a rare breed in my opinion.
As someone else said I would get a good book on property letting and familarise yourself with your rights and responsibilities, as at the end of the day the agent is just that your agent and it is you who are responsible in the eyes of the law, just helps when dealing with any problems through your agent or evne with your agent. you may eevn find that after awhile you may feel confident enough to manage the property yourself.

Definitely inform your lender, tell them exactly of your intentions especially with regards to paying off your mortgage. if they say no it's then your call as to whether you should hold off renting or to just go ahead rgardless(the risks are very small especially if only for one month but there none the less)

Sammy85_2

Another reason for putting a cooker in beforehand.. gas/electrical certificates. Ours are all permanently fixed in (or as near as dammit) so they're mentioned on the safety certificates and tested as such. But if your tenant gets one installed then who is to say its safe? Was it tested? Did they get "uncle jim" to fit it or a professional...

Dee140157

Thank you for your advice so far. As I am having the whole house done out, it seemed to make sense to get all the certificates up to date. The house needs rewiring. Still has twisty wire light circuits! Since we had central heating put in too, and a fitted kitchen it made sense to build in the cooker. Causes for less mess down the sides. Whoever rents the house will be getting a high standard let. In a few weeks I will have gas/electric certificates for the house. All will be done to safety standards required.

I see the view about the washing machine and dishwasher and on balance may simply leave spaces for those. I am in a situation where we will be able to afford to replace anything that goes wrong.

As for the mortgate company we will talk to them. It may be simpler to wait a few weeks and then rent out the day after we pay the mortgate off. As long as it is rented by about November we will be ok. It may even be worth paying the redemtion fee. They are all questions we can ask.

Reading a book is a good idea. Any suggestions for one to get?

What I still do not know is what I expect a letting agent do for me?
I assume they find the tenant, check references, sort out deposits, arrange agreements etc. I would prefer a long term let rather than lots of short term lets. But realise that may not be possible. In terms of managing the property, repairs etc, I am quite happy to do all that, but I am reluctant to do the vetting of tenants etc. I think I could easily be fooled! Can you partially use and agent and then manage a property yourself?

I am taking all this on board and will try to learn as much as I can before I become a landlord so that everyone in the process gains.

Sammy85_2

Our LA has two systems, Arrangement only and Full management.

Arrangement only - they arrange viewings, negociate on your behalf, vet viewers to weed out the "not interested but want to snoop type", accompany viewings, credit checks and referencing, arrange all legal checks on property such as gas/electric tests and do the tenancy paperwork for you incl inventory and tenant check-in. At that point they hand it over to you. Our agency charge £130 arrangement fee, £40 paperwork fee and then the equivalent of one months rent for this.

Full management - all of the above plus they deal with tenants for term of the tenancy, arrange for repairs/maintenance, deal with gas/electricity/council tax changeover at start of tenancy, full accounting every month with itemised breakdown (for the tax man!) and 3 monthly inspections. For this they charge £130 arrangement fee and 12% of monthly rent.
Beware with this option - If you choose Full management and you want to get rid of the LA later then they charge extortionate release fees. (as we are finding out now!) Either you pay them or end the tenancy and find new tenants on your own once the LA are out of the picture.

In my opinion its worth going with a decent LA at first. If in a couple of years time you feel confident and are fully au fait with the letting laws then go it alone.

Its been almost 3 years now and we're finally giving it a shot on our own, tenants moving in tomorrow!

zar

We rent in the rural Shepway district. Our rent for a 2 bedroom bungalow with garden (and now garage) has been £600pcm for the past 3.5 years - we've moved once in that time. I would expect to pay about £700 for 3 bedrooms. A quick glance on rightmove suggests that is about right.

Are you sure renting is the best plan? I'm always amazed at why our landlords haven't sold up as the first was worth about £270k (less than a 3% yield, but it was a temporary situation with the LL moving back into the property after our tenancy) and our current one about £180k based on asking/selling prices of neighbouring properties (4% gross yield). LLs have had to pay for various maintenance, mostly boiler related, during our tenancies. OTOH depending on how posh the property is it might be worth hanging on to for the anticipated London ctrl link - My personal opinion is that that is now already priced in to the local market. When we were looking at buying last year at some of the cheap terraces in Folkestone the EAs seemed to think that hordes of high-flying Londoners would be jumping at the chance to send a fortune on commuting each day and come back to a tiny 2 up 2 down a 20 minute walk from the sea and asda - this didn't seem very likely to me. I think it will much more likely push up prices of larger properties with sea views in folkestone and hythe.

We didn't have any white goods in our current place, not even a cooker. The lack of cooker put us off slightly but we had a baby belling so went for it. In the first place the LL had left a fridge freezer but as we had our own they removed it for us, so its helpful to offer that as an option. If you are leaving white goods I'd be inclined to say leave the tumble drier too as otherwise in winter the tenants will probably dry washing indoors (thats certainly what I've done in the past) and depending on how close you are to the sea and how good the ventilation is it might give damp problems if the tenants are not sensible about leaving windows open.

Most LAs offer a tenant finding service I think where they "find" a tenant and then it all goes over to you. If you do enough research however I'd say to give doing it yourself a go - if you advertise in the Herald and KM you will reach just as many potential tenants as on their mythical "list of waiting tenants". You can judge for yourself if they will be good tenants, follow up references and get credit checks yourself I think.

It sounds like a nice family house, so do consider that if you want to go down the no pets no children route that you are cutting off a large market which you could cherry pick out of. I'm sure that a couple like us, graduates both with jobs and savings who have never paid the rent late in our lives are a better bet than someone for whom the rent would be a struggle but who doesn't have a dog.

If you want to know the name of the LA we rent our house through then please feel free to PM me - they were pretty helpful compared with some of the idiot EA offices that let out property as a sideline and don't give good service to LL or tenant.

Dee140157

Oce again thank you for the advice.

I am sorry I sound so green to so many of you, but I am totally new at this. I want to avoid bad mistakes for me, but also for any prospective tenants.

I have another query which is about utility bills. Are any of these included in the price of the let - council tax, water bills etc? We are having a water meter installed this week as well. Not by choice that one. Shepway have the government's permission to force everyone to have meters so by chance that is happening at the same time. I therefore assume the tenant would be responsible for that as well as gas and electric etc. But was unsure about council tax.