An introduction & a step into the unknown

[L.b]

Hi guys, just a little introduction, I'm a first time buy to let invester with 4 properties close to completion.

At 20 this is quite daunting yet at the same time exciting with the thought to invest in many more if these become successful.

As these are my first investments and have no background in houses or any sort of building trade I have decided to use a letting agent for these 4, they charge 12% fully managed is that average?

I would just like a bit of general advice, people's personal ups and downs?

Regular problems people have come across?

Any advice that you could give would be very much appreciated

Thanks

Lb

[Richlist]

Here are a couple of checklists that I find useful

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.

CHECKLIST

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.

[Grampa]

I would say the fee is a litle on the high side for giving a agent 4 properties but I dont know what area you are in.

You are doing the right thing using an agent until you learn the basics but choose carefully because there are a lot of bad agents out.

[Melboy]

12% for 4 properties is far too high and even more of a non runner for me if there is 20% VAT on that figure you quoted

Is your LA a member of the ARLA or a professional body?.

Richlist listing above should be studied by yourself and you should ask the relavent questions to your LA before accepting anyone into your properties.

LA's are in business to make money so be aware of that fact. They don't all have the Landlord's best interest at heart so beware.

[Chestnut]

L.b,

I would make sure you know exactly what the agent is offering to do for you. e.g. who selects your tenants? (Preferably you - See RL lists above)

Thoroughly check the contract that the agent has with you and find out what it all means.

From reading here, and from experience, it's clear one should not asssume an agent can be relied on to know all the business for you. Learn it yourself as much as you can from internet, books, this and other fora, etc.

Have you read through the recent thread entitled 'Property Management' on this forum? Some useful points in it.

[Mortitia]

L b - there is no shortcut to learning the business but you must read everything on these pages and other landlord sites to try to learn from others mistakes - and the number 1 bigee is 'don't rely on your managing agent or get complacent'. Self reliance is the name of the game.

Mortitiia

[Geezah]

Never assume anything with respect to an agent, you need to monitor them and keep them on their toes. Gas safety certificates is probably the area where you need to be on the ball the most:

Safety is paramount

If the gas safety certificate expires and a problem arises, it's the landlord that could end up in prison as you are ultimately responsibe. Get copies of gas certificates sent to you if you let the agent sort this for you.

If there is a problem getting your gas man into the property to complete certificates on time, document all attempts to gain access.

[Mrs Tara Plumbing]

Ditto to the good advice here.

I want to add that you need to really understand the contract with the letting agent - be sure what they are doing and what they are not doing.

Get and keep copies of everything.

If they are arranging gas safety checks - you need to make sure this is done and make sure it is done between tenants.

[Geezah]

Is it a legal requirement to have a new gas safety certificate whenever a new tenant takes over?

[Melboy]

Is it a legal requirement to have a new gas safety certificate whenever a new tenant takes over?

No .. Gas certificates are valid for 1 year provided there has been no change of appliance (s)

[Geezah]

Ta, I thought so, Mrs TP sowed a seed of doubt in the brain cell just then.