Tag Archives: Landlord Advice

06Mar 2012

Current Property News: ARLA give solid advice.

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By Steve Roulstone

It is good to see ARLA posting some advice for Landlords and Ian Potter in his latest release has done just that by providing his top ten list of’ what to do as a new Landlord’. It is a good article and reflects what we at Castle Estates have been stating for some time now, namely, take good advice!! Ian concentrates on several areas, most of which are similar to those I commented on as listed in my local paper, and as then, I would like to add a little more meat to the bone through this post, something that is of course difficult for Ian to do as a representative of our Professional body, rather than a ‘Letting Agent’ parse.

More property needed!

The background to the piece is again, the increasing opportunity that exists in the current market for the investment Landlord, with figures quoted of over half of those Agents questioned believing that demand is outstripping supply. I would have hoped the figure were more like three-quarters, but would concede that the market is rising after a quite Winter and that it should continue to do so until well after Easter, the traditional time to see the Market develop momentum for the year.

Research Research Research!

Ian has stated rightly so, that a new investor will need to look at what gives any one property an advantage over another, but I believe we can be more specific here. The investor may not know at present which are the better schools, where catchment areas start and finish and such basic matters as what DOES make a difference to Tenants when looking at property? This is of course where experience of an area comes in to play and not just as a Letting agent, but how long in this market. I do not wish to turn this into an Estate Agent Vrs Letting agent piece, but suffice to say, most Estate Agents have only just started renting property and I would say look to the longer established specialist before deciding who to speak with.

Present well and Know the market.

Ian is correct to point our areas where a property can stand or fall and in some cases is ignored by Landlords, that is the appearance against what else is available for the Tenants to choice from and an understanding when doing the calculations, of what actually happens between Tenants during void periods. Both of these matters reflect on the financial and are well lined together. We always advise all Landlords, especially new to buying property as an investment, to look at the income based on ten months occupancy (but would normally be able to supply eleven as our track record confirms!) and even if the property is good enough to market without delay, work out how long before decoration should be planned! Cost implications of both need to be built in to every financial plan and if you are unsure about condition of decoration, then it probably proves the property would benefit from work being carried out now!

 Insurance and Inventory.

I link these together because everybody knows that Insurance protects, but not everybody gets that an Inventory does as well, because the Inventory has become one of the most important documents when renting a property. Landlords and agents have to be able to prove any dilapidations at the end of the Tenancy and without an Inventory I fail to see how this can be done. One simple challenge from a Tenant for the Landlord to prove what condition the property was in at the start of the Tenancy and without an Inventory, the Landlord cannot comply!

And for the rest?

It is all great! The more the subject is looked at the more you will realise that there is a process, not always the same,  but one that will make sure the first time Landlord does not slip up at the first hurdle. The other point is that there will never be a shortage of people willing to spread their knowledge and all that any new Landlord needs to do is ask! All the Landlord has to do is ask the right person. That is why I believe in professional qualifications and vote for experience every time!

28Feb 2012

Property Landlord advice: Who knows about Buy to Let?

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By Steve Roulstone

 

Buy to Let seems to be making a comeback, certainly as far as the press are concerned anyway, with several articles being published both at National level and at regional level. One such article in the local paper we advertise in,  The Newsletter in Stafford caught my eye this week and whilst in principal it is a good article, i gleaming issue did come to mind!

Ten Top Tips!

The article was giving what the writer called, his ten top tips when considering But to Let and I would have to agree with most of what was written, what I would take issue with is what was NOTR written. On two occasions in the article, it mentioned speaking to people who had experience in the field, such as others that the reader may already know who had invested in the property.

Who Knows Best?

It even stated that you can use Managing agents to look after your property although we would raise a charge for doing so! Excuse the Sinicism here, but I am yet to find an Estate Agent who would do this for free, or a Solicitor that would provide an agreement at no charge! Of course we would charge and in relation to both of the professions I have just highlighted, could assist in ensuring the purchase was done correctly, especially with so many properties being linked to on site Management Companies now and the agreement we would provide would be certainly as good as any solicitor, but nowhere near as expensive! Sounds different put like that doesn’t it!

Blindingly obvious who to speak to!

No what the article never suggested was the blindingly obvious place to get good experienced advise is from your Professional Letting agent. It is disappointing not to be recognised for the service we can provide and the knowledge we can pass on! I know from the people who have come to us and just how many we have assisted in buying property, that we do a good job here. Yes we do turn such contacts in to business and we do charge! But we have never forced anybody to hand over there keys or their money! Rather that as professionals in the field, the advice has been such that our Landlords have CHOSEN to use our services and the many happy Landlords we have are living proof, that the professional Agent should be top of the tree when considering top tips.

Professional.

Now regular readers of my blogs will know that I take every opportunity to blow the trumpet of professionalism. Well there is no difference on this occasion. The whole point here is to ensure it is the right Agent and that the advice is good advice. Whilst we continue to wait for the Government to bring in the legislation to make professionalism in our industry the norm, all you have to do to ensure you are dealing with a Company that conforms, is look for the (or ask for the) evidence of the professional bodies they belong to.

Check it out

At Castle Estates in Stafford, we are members of ARLA, (NFOPP) and belong to the ‘Safe Agent’ scheme, as well as being members of The Property Ombudsman. By checking and reviewing the organisations (and all this can be done before you even speak to anybody, because the logos, will all be clearly shown on an Agents web site) you can be sure you are speaking to a professional Agent  and therefore receiving good advice, now isn’t that what we all want? 

22Feb 2012

Current Property News: New PIN documents for new Tenancy – the corrected story.

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By Steve Roulstone

Last week I posted a Blog about the changes to the way in which any Tenancy is viewed once it becomes a periodic agreement in relation to the Tenant Deposit Scheme and the various protection schemes that exist. I made a very simple mistake, because I did not take into account the initial legislation, which stipulated that the Tenant could not be charged for the procedures required to register the deposit in any way. My post, which has since been removed, suggested they could, so it is now time to correct that statement.

The changes.

The changes as brought about by the Localism act 2011 and a court case (Suupere v Nice) from July last year. They are clarification of what has always been the case, as far as what needs to be done with paperwork once an agreement becomes periodic. (Passes the fixed term without signing a new agreement) As far as the legislation is concerned, it now makes it clear that the best advice and therefore the only way to deal with the matter to hand, is that a new PIN form will need to be issued and signed, confirming that as far as TDS legislation is concerned, a periodic agreement becomes a new agreement the moment it passes the last day of the fixed term.

Cover all matters.

It therefore also makes sense to issue a new set of Terms and Conditions at the same time, to ensure there are no errors in relation to any changes that have been made to Terms and Conditions during the initial Tenancy. This is of course dependent upon the scheme with which the deposit is protected and can change from scheme to scheme.

Timing.

The one area which is still under consideration is from when it is best to issue new PIN and T&C’s from? The court case was heard last July, the legislation becomes law in April, but was entered on to the statute books last November. The jury is still out on this one, but it seems a date of the turn of the year would be a good date to start from. This means retrospectively issuing new documentation and ensuring all new agreements are dealt with from now onwards as they become Periodic. It also means ensuring that Tenants are made aware of what they will be required to do within our information packs (given to Tenants at the beginning of their Tenancy) from now on as well.

Landlords to pay.

Now to correct my mistake from last week, of course Landlords will have to pay for this service, because the initial legislation, which this interpretation of requirements is based upon, does not allow Tenants to be charged for the service. In retrospect (how easy that is!) we do of course understand why, but I have a feeling many of our Landlords will need to be convinced of why. Not the physical why, but why once again they are being asked to bear more costs!

Effect in the market.

We will now discuss how this will proceed and will be writing to Landlords whether they be Full Management or Tenant Find, to explain what they must do and what our costs will be for carrying out the role. No doubt Landlords will wish to push longer fixed term agreements on Tenants now which some could argue is not in the Tenants interest, but that is a small matter when considered against what may happen to self managed properties should Landlords ignore the requirements. So overall, another gentle nudge towards Full Management may well be the outcome, a situation we are not going to complain about! Oh and the costs, as far as we are concerned will not change whether paid by a Landlord or Tenant, so we can clearly state that we had no intentions of charging the Tenants any more than we will now have to charge our Landlords!

21Feb 2012

Property Landlord advice: Standards and Legislation still not getting through.

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By Steve Roulstone

As a Letting Agent I looked at three houses yesterday, all at the invite of the Landlord and all for evaluation. Three Landlords who were all asking for my opinion on the readiness and valuation of their property in the current market place, and all three were due differing responses for varying reasons but the issue that stood out was that the message about legislation and property readiness is still not getting out there and we still need to preach to either the unconverted or the unknowing.

House of Mulitple Occupation.

The first was a terraced property which had been lovingly restored by the owners. The Gentleman had made a really good job of renovating the property and had managed to change a property so much that it no longer felt like a traditional terraced house, even though it was. The issue for this Landlord was whether the property would take three or four Tenants as a room let. What came as a surprise to him were the requirements for a House of Multiple Occupation that he had to adhere to, because even though he had been carrying out the work for several years, he was not aware of what was needed. He will now speak to the Council, because even though the property did not need a License, the regulations surrounding safety, once more than two family groups occupy the home, remain the same. He will then be able to decide between renting per room, or renting to a Family.

Property in fit condition.

The second was a house that had been purchased cheaply and the new owner, having started some work, was looking for advice as to a valuation. Unfortunately, I had to confirm that in my opinion it needed far more money spending on it before it was even fit for purpose. This concerned a new RCD fuse board, new carpets, all of which were badly fitted, new decoration, all of which was multi prime colours, repair and make good to several areas such as stair rails, chipped tiling, poor flooring and a general electric check because of the obvious additional wiring installation that had been added to the original for what looked like several years. Not forgetting what looked like unvented wall mounted gas heaters and we had a property which was far from fit for purpose.

Unwanted information?

 I certainly felt that the Landlord did not feel the property was far from ready once he had completed the new bathroom, and my sincere hope is that some other agency does not take the property on without the work being carried out, but such calls do become one of the hardest things we have to do as Agents.  Hopefully my message set around my central point that with such choice of quality housing about, why should a property in this condition be rented out in competition with the rest of the market was understood. The worry is why both of the properties above should get to the stage of what we saw yesterday without knowing what was needed before this stage?

Good advice.

Perhaps it is that people do not really want to hear? But this is not the case with the first Landlord, because we have already looked after two of their houses and they are good Landlords, so it is a fact that the legislation message has not got through, which is doubly compounded, when we heard of just how much time the Landlord had spent negotiating with the local council over matters surrounding access to the property over the last three years? There is a lesson to be learnt here, even for us as Agents, for whilst we knew the Landlord owned the property and was carrying out renovation, we were not aware of its intended use until yesterday and I definitely feel we should have had a conversation prior to the properties completion. As Tenant Find Landlords, we have assumed they knew and the lesson is clear for us to see, enquire ask and speak at every opportunity and what came as a surprise could have been avoided.

Third time lucky.

The third visit came as an absolute pleasure, here was a Landlord who had moved back in too his home, between Tenants whilst he bought a new house for himself having sold his last house before buying again. In the meantime, he had taken the opportunity to refurbish the house again, fitting new carpets, re-decorating and fitting a new Bathroom. Every task he got spot on, using clean fresh schemes with neutral colours, taking the opportunity to tidy up the garden, laying slate along the edges of paths to reduce the burden of weeding for the next Tenant and improving the appearance. Seven years ago, when the house first came to the market, it looked just as it does now and all the time we have been asked for comment and opinion as to what was being done. And therein lies the answer, no matter if we feel we are interfering, to do our job correctly, we must speak and spread the word to Landlords as much as possible.

Lesson learnt.

Of course we cannot speak if we do not get the chance to speak as with the second Landlord, before we are invited to the property, so to put that right, apart from just offering it to the people we do speak with, we are going to physically advertise free advice to Landlords for the next three months. That way, we might just save a Landlord on another day, being so surprised about what was needed from him in presenting his property to the market in a fit and proper state in the first place! 

07Feb 2012

Current Property News: Higher rents good news for Mortgage brokers but not always for Landlords.

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By Steve Roulstone

It looks as if the rent increases that we have seen on average are beginning to have the effect of allowing Mortgage brokers to have more confidence in the’ Buy to Let’ market as reports this weekend in The Daily Telegraph confirm.  Such providers as Mortgage Works and Paragon are clearly confirming their stance and the fact that potential Landlords have more choice is an added benefit with the amount of choice that is available.

Differing options.

The report makes clear that buyers have options at the moment, with deals to be done both in the open market and of course with new build as Builders need to move on and complete sites as soon as possible and move to the next plot of land that has more than likely been purchased for some time and for builders where land lies without being broken, it is no different than an unsold completed house.

Landlords taking note.

In this case, the article was bought to my attention by an existing Landlord as it had raised a query in his head about the level of rent that was being achieved at his property rather than any advantage in buying further property at the moment. His call was all about the opportunity to achieve a higher rent than he was currently enjoying and of course that is a scenario that we look after for all properties and Landlords we are charged to look after.  

Regular undertaking.

What we do every year is to look at rent levels in the spring, which is the time when most rents increase as the market achieves its natural seasonal high and the time when most people look to move. We do this by reviewing every rent where there has not been a change of Tenant in the last six months (ensuring we review in line with Landlords rights for every property at least once a year) But in this case whilst rents may be rising Nationally year on year, I had to advise the Landlord that the time was not yet right.

Market trends.

We are currently in one of those periods, where the amount of property coming on to the market is outstripping demand. Having ensured we are renting the number we would expect considering both the time of year and current popularity of renting, we know that the effect, which will exist throughout our area and therefore with our competitors as well, will be to encourage offers from tenants and mean some properties will stay void for longer than we would wish. Our answer is to attract as many Tenants to us as possible by reducing our Tenant fees for the spring.

Good advice.

So my advice had to be to hold on any rent increase until we see an increase in activity. (which will not be during the current cold spell) in the meantime, we will do everything we can to attract the Tenants and when the time is right acknowledge the increase in rents on behalf of all of our Landlords, but to encourage Tenants to look at the market when so many properties are available and when we know that Landlords will be encouraged to accept offers does not do the Landlord good service, which just goes to show, that not all reporting can be echoed in the market place and not all areas of the Country react in the same way at the same time! Perhaps it would be better if such reporting pointed out those areas can vary, because on the ground, we know that they do!

01Feb 2012

Lettings News: Are Landlords Fully Aware of Their Responsibilities?

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By Craig Smith

There are many reasons why someone may want to let out their home. A lot of home owners at the moment are struggling to sell their property but still need to move on with their lives, perhaps a job offer in a different part of the country or moving abroad. Putting a tenant into the property can keep the mortgage paid and the house looked after whilst the Landlord is away.

Basic Health & Safety

A lot of these Landlords can come into this situation knowing nothing at all about renting a property and it is our job to keep them on the right path. The Landlord would be responsible for ensuring that the property is safe, for example ensuring that any gas appliances are tested annually and that anything that the tenants are left with a safe environment to live in. Don’t forget that Landlords can (and have been) jailed for failing to ensure that their rental property is safe!

Then there are the less well known items that can catch out unsuspecting homeowners, such as ensuring that stairways are safe. One property that we looked after for a Landlord had no banister rail along the stairway and although it did look great, something did need to be done before a tenant moved in to prevent any accidents occurring. A simple banister was fitted in order for the stairs to be deemed safer, the Landlord would much rather have a small expense at the start of the tenancy than a claim for damages from an injured tenant!

General Repairs

Repairs also need to be covered by the Landlord throughout the tenancy, not just to the building itself but also to any items that have been left for use by the tenant. Of course, if a property has been let furnished and a tenants pet has ripped the cover on a sofa then the tenant would be liable for the damage. But it is the Landlord who should cover any wear & tear such as a cooker breaking down or rotten window frames.

Who Can Carry Out the Repairs?

For general repairs such as gardening or decorating a lot of Landlords prefer to do this themselves which will help to reduce any costs but for more specialist items such as electrics, qualified contractors need to be used. Some of the most well known include using a GasSafe registered engineer for works to gas appliances and most electrical works that are carried out must now be certified under Part P building regulations. 

01Feb 2012

Property Landlord advice: Basic Health and Safety for Landlords

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By Mike Edwards.

Todays post by Mike Edwards, represents information that the Castle Estates group have been posting for many yeras, but just never changes. Giveing truth to the old adage, you just cant beat good advice!

Many landlords are still blissfully unaware of even basic health and safety rules when leaving their properties for rental, according to The Association of Independent Inventory Clerks (AIIC). For example, one in ten rented properties have items such as soft furnishings, bedding and furniture that do not have the required fire & furnishing compliance labels and have to be removed. What’s more, AIIC members are still finding the dubious – and illegal – practice of landlords ‘selling’ odd items of furniture, without fire & furnishing compliance labels, to incoming tenants.

 It is also of course illegal to let the tenants happen to ‘find’ an ideal piece of furniture outside the back door and for the Landlord to offer to ‘hire’ the furniture for a peppercorn rent. Pat Barber, of  The AIIC, comments, “A recent tenant told us – ‘I bought the sofa for £1, it’s really old and tatty, but a great bargain.’ When we pointed out that he would have to take it with him or dispose of it at his own cost when he moved out he was not quite so excited.” But more to the point what the Landlord had done, to circumvent the regulations, was totally illegal and an offence punishable by at least a fine and heaven forbid had there been an injury or fatality that involved the illegal sofa,  a custodial sentence.

We ourselves see time and time again, properties with fire hazards such as gas cylinders and chemicals stored incorrectly by the landlord. There was such a case a few years ago where a discarded cigarette end ignited petrol being stored at the rear of the property fortunately in this case by the tenant. All landlords must ensure that all the soft furnishing, bedding and furniture is fire retardant with the correct labels and that hazardous materials are not stored in the property or garage. The motto must be “If in doubt, throw it out”

AIIC has identified the top 10 most common health and safety issues found in rented properties:

•          Non-compliant furniture, bedding and soft furnishings         

•          Loose sockets and light switches           

•          No smoke alarms or monoxide detectors fitted         

•          Obscured gas meters and electricity mains fuse boxes        

•          Curtain tracks and blinds where screws have been put directly into the wall
              without using rawl plugs

•          Loose/damaged steps, paving outside the property 

•          Loose stair carpet  

•          Poorly maintained decking          

•          Air vents and air bricks covered in rooms especially where there are gas
            appliances

•          Locked windows with no keys supplied

17Jan 2012

Landlord Advice: When Tenants Run Away From a Property

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By Craig Smith

Managing around 300 properties throws up a wide range of different tribulations from time to time but one that keeps appearing every now and then is a tenant that ‘does a runner’ from a tenancy. There are a number of causes as to why they may do this but usually this is due to financial problems on the tenants part.

Scared of the Unknown?

Perhaps one reason that a tenant may run from the responsibilities is that they don’t know how the Landlord will react to overdue or unpaid rent. From experience, a lot of Landlords are willing to work with tenants to reach an outcome that will suit all parties. For example, if the tenant is in rent arrears the Landlord may agree some sort of payment plan so that the tenant can pay the outstanding rent in smaller payments but, eventually, the Landlord still gets his rent.

Of course, not all Landlord are as reasonable as others but communication from the tenant is key. Again, most Landlords will be more willing to resolve any such matters with a tenant is they keep in regular contact and update the Landlord as to when payments may be made.

Extra Costs for Landlords

Another big problem with tenants leaving in a rush is the state in which the property is usually left. A recent case that we had of this included furniture, boxes if items and even childrens’ toys being left in a house! This is without mentioning any cleaning or redecorating that needs to be carried out due to tenant neglect.

If a deposit is held then a Landlord can take steps to use this either for rent arrears or for damages, or, depending on how much is held and how much reinstatement work is needed, perhaps towards both. Using the deposit towards the costs will help but initially, at least, the cost is usually borne by the Landlord.

Property Downtime Increases

Reading this now you might think that things aren’t too bad, get the decorators and the cleaners in and away you go again looking for another tenant. But think of this, how many tenants would be willing to take on a run down property? Fair enough the work may already be in progress but it is hard to see potential in a property that has been neglected. This could result in the property being empty for a longer period than it may usually do.

With an increase in the amount of time that the property is empty, coupled with the initial costs of any works could all add up to a rather large bill for the Landlord!

Can we Prevent the Tenant form Doing This Again?

The simplest answer to this is, unfortunately, no. A tenant will do whatever a tenant wants to do, whether it is right or not. There are ways of chasing tenants for rent arrears or dilapidations through the courts which could result in a tenant having a CCJ or some sort of judgement made against them. This could affect their credit rating and would almost certainly hinder their progress on any future tenant referencing. 

13Jan 2012

Tenant issues: Notice to leave must be correct.

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By Steve Roulstone

One issue which happens again and again is the need for a Tenants notice, to be in line with the rental payment period and time and again, we receive notices which do not reflect the correct timescale. The problem that has arisen in our offices this month, highlights another way in which this occurs and despite the fact that I have written about this before, I feel that there is an additional point here which could help to both clarify and assist in enabling Tenants to get this right.

Last person to hear.

The problem this week, in both cases, was that we ended up being the last person to hear what the Tenant was planning, and it has struck me that the reason is because it is highly likely (confirmed in one of the cases I am referring to) that the Tenant feels that when notice is given, it is not what we wish to hear and will be looked on as bad news. This is of course, not the case. In fact, when available property stocks for marketing are low, exactly the opposite!

Minds at rest.

The issue for the Tenant is to be assured that when they advise us of their intention to leave, it will not be bad news and that by being involved from day one we may be able to assist the timing and circumstances surrounding the move to the benefit of all concerned. Certainly advance notice as far as the Landlord is concerned is always good news and should we be able to allow the existing Tenant to leave early (only of course when a new Tenant is moving in to replace them) nobody is disadvantaged.

Keeping people informed.

The media is quick to jump on any situation where Tenants are ill informed and rightfully so, but if we can re-assure our Tenants from day one that any news, including the desire to move on, is welcome, then perhaps we can save ourselves and all involved the problems that occur when we have to point out that the notice, which normally coincides with the date they have already arranged to move, is not actually in line with the payment dates and (at times) still has a further three weeks to run for which they remain liable!

Communication.

So, not so much Location, Location , location – more Communication – well you can see where I am going. At Stafford we will be introducing notification which tries to assure the Tenants that any news will be treated equally by our office, no matter what and try to encourage them to advise us as soon as they are able when they are considering moving, so at the very least, they understand the existing liability and need to serve notice in the correct manner. But the issue here is not what we say to Tenants, rather what Tenants say to us, because it is they who need to improve their communications and all we can do is encourage them to speak to us.

Point of contact.

How we deal with this, because we have a busy office where any tenant may find themselves speaking with any of our different Agents, is ensure that the person who originally moved them in to the property, deals with them through to and including the Check in and out. Therefore they will be referred to somebody they already know and that, hopefully, makes it easier for Tenants to speak with us!!

12Jan 2012

Current Property News: Mortgage arrears climb as Tenants struggle.

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By Mike Edwards

Arrears are set to rise in the buy-to-let market, as more landlords face having to deal with tenants who cannot keep up their rent payments. According to research by Templeton LPA, a specialist practice of LPA Receivers, the number of court orders to evict tenants is up by 11%. In the last quarter, 24,966 tenants faced eviction notices – an increase of 11% on 22,558 a year ago. The number of tenants in severe financial difficulty has also shot up in the last three months, says the firm and during the last quarter of 2011, there were nearly 11,400 more tenants over two months in arrears than in the same period of 2010 – a rise of 18%.             

At the end Q4 2011, nationally there were 78,970 tenants in England and Wales in severe arrears.              

It is clear that a growing minority of renters are falling deeper and deeper into payment difficulties, and the number of severe arrears cases is rising. While the wider tenant mix has changed since the mortgage market downturn – with a greater number of financially sound yet frustrated first-time buyers – a growing number of tenants are seeing their job prospects affected by the UK’s economic malaise. Arrears levels on buy-to-let mortgages have not yet felt the impact of growing severe tenant arrears and evictions, but this would change this year. In the last quarter of 2011, the number of buy-to-let mortgages more than three months in arrears fell by 7% compared to the previous quarter, representing an annual decline of 17%.
However, at 26,300, there are still more than five times as many buy-to-let mortgages in severe arrears compared with Q3 2006.       
 
Mortgage rates have kept monthly payments low, but there has also been a change in landlords’ behaviour. With capital gains falling by the wayside in the past six months on higher loan to value BTL properties as their values fall  rental income has become the most important component in an investor’s annual return – but it also pays a landlord’s mortgage cheque. As a result, many landlords are being less lenient with tenants facing initial payment problems, and are looking to use court orders to replace tenants quickly in expectation of finding a financially sound substitute – and potentially an increased rent. However it is highly likely that mortgage arrears will climb this year and that both overall arrears and severe arrears will rise. This in turn will feed into increased tenant evictions and hamper a growing number of landlords’ ability to meet their monthly mortgage costs.