New Landlord advice

[hushpuppy7]

Dear all,

I am a newbie so hello!

May I ask if there is a 'must do/need to know' guide written by one of you experienced LL for a newbie please?

I must apologise if this has already been answered, but I honestly have searched the site in case it has and can't find one!

To add, my first property will be a 2 bed new build, with a garden and garage, but unfurnished and I am looking to employ a LA to start off with.

Thanks

[Richlist]

I have a few lists that work for me (there are two shown below) but its really down to personal circumstances & experiences.

The points below will form the basis of a good start.

CHECKLIST for LANDLORDS

The most important thing that any potential landlord can do is choose their tenants very very carefully.

1. Get Referencies.....bank, employer and previous landlord.
2. Take out rent guarantee insurance.....its not expensive.
3. Get a home owning guarantor. Carry out reference checks on the guarantor. Give the guarantor a copy of the AST. Make sure the guarantor document is drawn up as a deed.
4. Don't let to people with pets or children......the risk of them giving you problems are big.

5. Don’t let to anyone under 18 (minors). Draw up your own limits….I prefer nobody under 25.
6. Don't let to smokers........you won't get rid of the smell.

7. Don’t do Company lets.

8. Don’t let to anyone on Housing Benefits.

8a. If you do choose to let to applicants on Housing Benefit CHECK that your mortgage & freeholder (if your property is leasehold) allows it.

9. Don't let to anyone who isn't working full time.
10. Inspect properties every 3 months.
11. Only let initially on a 6 month AST.....that way you can both part company after 6 months if you don't get on.
12. Use a reputable Lettings Agent OR one who has been recommended OR do it yourself (only if you know what to do).
13. Meet your tenants personally. Make sure you ask all the right questions and gauge whether they are right for you.

14. Protect the deposit in one of the official schemes.

14a. If you have a dispute with your tenant(s) over deductions from the deposit remember…..you can either go through the DPS adjudication process OR take the tenant to the Small Claims Court for recovery of your losses where you may have a better chance of success.

15. Issue a section 21 notice as soon as the deposit has been protected.

16. Make sure there is a detailed inventory & schedule of condition……signed by both parties.

17. Remember its a business....so avoid emotion & being overly sympathetic to your tenants.

18. Read as much as you can about renting & letting i.e. educate yourself.

19. Don’t let to anyone who doesn’t speak or understand English.

20. Don’t forget that you will need an Energy Performance Certificate (EPC)…….before you market the property.

21. Don’t forget to get an annual Gas Certificate.

22. You are responsible for ensuring anything electrical in the property is safe so consider getting the electrics checked professionally….and any appliances you provide.

23. Try to avoid having your property classified as an HMO……meeting regulations is expensive and time consuming.

24. Make sure all adults living at the property are on the AST & any other documents.

TENANT SELECTION CRITERIA

Applications from the following people are not acceptable under any circumstances

• Smokers.
• Pet owners (specifically dogs, cats or reptiles).
• Non English speakers.
• Those with resident children.
• Anyone in receipt of housing benefit or LHA.
• Those wanting Company lettings.
• Any letting that would results in overcrowding (eg parents with children in a 1 bedroom flat).
• Anyone running a business or commercial operation directly from the property.
• Applicants who have long lead times to moving in.

Applications from the following people will depend on circumstances

• Non working tenants…..including part time workers, unemployed, those looking for work, university students with/ without working partner are each considered on their own merits.
• Non resident children…..eg single, divorced, separated parent who looks after a child every other weekend may be OK. Would depend primarily on age of children.
• Lettings for less than 6 months…..normally requires higher rent to cover fixed costs.
• Poor references or no references or don’t qualify for RGI…..may require a home owning guarantor or rent period in advance.
• Age under 25......depends on the person, circumstances, maturity, job etc.

* Same sex couples....in my experience it often ends in tears before the end of the fixed term of the AST.

* People from what I would describe as 'Third World' countries eg Indian sub continent & Africa. I've had tenants who have never had a fridge or a proper bathroom or kitchen before. They are not familiar with vacuum cleaners, don't understand condensation & the need to ventillate rooms. They also hate the British winter.....many never having experienced heaters of any kind. My experience is they prefer to sleep on the floor rather than in beds.

* I use extra caution for any application from people outside of Europe & North America

* Anyone who requests anything out of my comfort zone/ my normal way of operating. It doesn't matter what the reason......its likely to make extra work for me and more chance of it going wrong. I stick to what I know.

* Shift Workers.......not an obvious group to avoid BUT when they work all night & sleep all day you try getting hold of them on the phone....its virtually impossible! Its OK if you want to call them at 4.30 am when they get home from work or in the small window of opportunity between when they get out of bed & leave for work in the afternoon, otherwise you'll never get hold of them......best avoid. If you need to carry out repairs on the property thee are more problems with shift workers cos you need to work the nightshift also......obviously not ideal.

[hushpuppy7]

Wow now that's a comprehensive list, no doubt complied from experience and over time!

If I employ a LA can I dictate any/all of these terms for them to include when finding and vetting a tenant?

I have never heard of the home guarantor before, once again is this the norm for a LA to do or do I specifically need to ask for it?

[Grampa]

Also if you are going to use a agent don't think they will know what they are doing just because they have a high st shop. There are no requirements or legal training needed to become one and there are a lot of rubbish ones out there. Most can set up a tenancy but don't know how to correctly deal with the situation and serve the correct notices if it starts to go wrong.

Here are my thoughts as a agent myself:

1. Don't choose a agent on fee price alone

2. Do they belong to Arla or Nals which will mean they have certain training and safeguards in place.

3. Ask the question. "When was the last legal or training course they went on" I wouldn't be offended if someone asked me. There are so many changes to law I wouldn't touch one who doesn't go on courses and cant show a certificate.

4 Ask what deposit scheme they hold the deposit in.

5. Ask what they do to protect landlords following the Superstrike court ruling. This is important and if they look blankly at you I would walk away. They should be able to comment on it WITHOUT LOOKING IT UP OR COMING BACK TO YOU.

6 Do they serve section 21 and section 8 themselves?

7 Do they advertise on Zoopla and/or Rightmove. They should on at least one.

8 Any agent you use must allow you to veto any tenants you don't like before any tenancy started.

9 Are any maintenance contractors employed or linked to the agency? If so it is not unknown for unnecessary works to be done.

10. Ask for a clear breakdown on any fees you may be charged (get it in writing or email)

These are some you could be charged and could be hidden:

monthly commission (%) fee. (never agree to pay 6 or 12 months up front if on full management and avoid at all cost)

extra charge to arrange gas certs (most agents don't charge a mark-up on the cost but some do) (avoid)

Inventory charge. (fairly normal)

Contract renewal fee (fairly normal)

deposit protection fee (fairley normal)

fee for serving notices on the tenant. (section 21 and or section 8) (should be included)

Mark-up fee on any contractors invoice. (avoid)

[hushpuppy7]

Grampa thanks for a terrifically comprehensive answer and I will adhere to it. Don't suppose you cover north Bedfordshire do you?

[Melboy]

Comprehensive isn't it Hushpuppy 7?

When I started out 24 years ago in the renting business I must have broken every rule that Richlist hs shown on his very comprehensive list ( except for gas safety certificate).

Now I follow it more or less 100%..... OK 90%....... I wonder how many Newbie landlord's follow even 20% of RL listings.

Take note of the LA recommendation because believe me there are some real rubbish ones out there!

[hushpuppy7]

Thanks again everyone. Is there a trusted site that has reviews of LA?

[Mortitia]

I think that is a NO because we all live and let in different geographical areas and 1 year and agent can be fine and not so the next.

Go into a few and ask for testimonials. Maybe start out with a long established local company rather than a franchise or a chain.

[Richlist]

Go into a few and ask for testimonials. Maybe start out with a long established local company rather than a franchise or a chain.

1. I'd second that advice.

2. Try & identify a local landlord group or organisation and ask them for recommendations. Landlords somewhere in your area have already been through the learning curve having used & dumped the bad agents.

[Grampa]

Forgot to add to below to my list when choosing a letting agent.

It is absolutely essential for all landlords that use a agent to make sure there is WRITTEN AGREEMENT, NOT VERBAL that confirms the agent takes responsibility for for the right to rent status of the tenant to comply with the Immigration Act 2014 otherwise the landlord will be liable for any breach and given a penalty notice up to £3000.

I wonder how many agents dont have this wrtten agreement in place on purpose so any breach of the Immigration Act lands with the landlord and not themselves.

[wardrg]

I always screening my prospective tenants to make sure that they are able to make the rent and don't have a history of causing problems. In recent month's I've been using a website - www.tenantscreening.co.uk and can't recommend them highly enough.

[fionaf]

I fully respect the experience of other landlords and have read Grampa's and Richlist's comments in the past and benefited from them (thank you!) so you are stepping in the right direction by coming here. Richlist's checklist is excellent. I would only add that sympathy with tenants can usually backfire. We had a couple who were both working and renting from us. She went off on maternity leave, baby was three months old and he went off with someone else. We tried to be sympathetic and she begged us not to evict her, but after building up thousands of pounds of debt and finally issuing a s.21 and a.8 she absconded. When we tracked her down (she didn't think we would...) she said it was our fault she was so much in debt as we should have evicted her as soon as she was two months in debt. Moral of this tale is you don't have to be cruel but you need to be realistic and firm.

If managing and advertising the property yourself then I would highly recommend openrent - they do a superb service. We just rented two properties with them, adverts on Zoopla, Righmove and Gumtree etc all for less than £30. First advert free. I would recommend having a viewing afternoon with 15 minute slots making it clear you will only make a decision after you've seen everyone. You then get to pick the tenant for your property - as per the checklist so expertly supplied by Richlist.

Good luck.

[hushpuppy7]

Guys thanks for these responses and I will abide by your suggestions.

Fionaf I'm not confident enough to think about not using an Agent just yet, but thank you.