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Landlords Property Rental Guide
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Renting or Letting should be a Fun Experience Not a Headache
Table of Contents
Market Your Own Property or Employ an Agent? Employing an Agent Finding Your Own Tenant § § § § § § § § Preparing Your Property for Market Where and How To Advertise? Conducting Viewings Tenant selection Criteria How to Obtain Credit and Reference Checks Yourself Getting an Inventory/Schedule of Condition Report Where and How to Get Tailored Tenancy Agreements Registering Tenant Deposits
Landlords Property Rental Guide www.lettinglinks.com
Appoint an Agent ü If you live far from the rental property and will struggle to conduct viewings. Now there are benefits as always for both. ü If you don’t want to give out personal contact details to prospective tenants. Find Your Own Tenant ü If you live near enough to the rental property to be flexible with viewing times. The above points are all that you are required to consider when deciding which way that you want to go. ü If after reading this article. you feel confident in carrying out the steps in this guide.e. i. Market Your Own Property or Employ an Agent? When deciding to rent out property you are faced with two choices. ü If you have limited or no time to find a tenant yourself. the key is to choose the way that is best for you. name and phone number to prospective tenants. ü If you have some free time to give to finding a tenant.lettinglinks. ü If you don’t mind giving out basic contact details. ü If you don’t want to do it yourself. 3 Landlords Property Rental Guide www. ü If you want to maximise profits by saving large sums of money.com . This guide covers all that is necessary to successfully and legally rent out your property. (once advertising is in place much of the time is allocated to just viewings). Below I have highlighted a few key points that you need to consider which will help in deciding which way to go. either appoint an agent to find a tenant for you or find a tenant yourself.
In the rental industry. Most people in the country when looking for rental property go to the major internet sites before they visit individual agents. then there are some important factors to consider when selecting your agent. then it is important that you do some background research on them. They have an agent search facility on their website that will assist you in finding a registered agent. here’s the twist. don’t visit them as a landlord requesting their services. Primelocation and Rentright. It is a simple task to complete that is crucial in deciding which agent to choose. you want to have your property on them! The next thing you need to do is go and visit the agent. visit them as a tenant looking for property. However. Most reputable agents are regulated by certain authorities/professional bodies. If the major property portals do not have properties advertised on them that are from that particular agent. Once you have found a reputable agent. it is not a legal requirement but reputable property agents are members of a regulatory body. Zoopla.com . The main one in the rental property industry is ARLA The Association of Residential Lettings Agents. your property will not be featured on those portals either. By ‘mystery shopping’ the agent you will instantly see how the staff treat 4 Landlords Property Rental Guide www. Do they have a website? Go on to some of the main property portals such as Rightmove.lettinglinks. Employing an Agent If you have decided to employ an agent to carry out the task of finding a suitable tenant for your property. Therefore. Is your agent registered with them? You can find this out by running property searches within surrounding areas to see if properties come up that are on the market with that particular agent. then if you choose to employ that agent.
lettinglinks. A finder’s fee should include: ü An inventory/schedule of condition carried out on the property ü A suitable tenant that is credit and reference checked to be found. 5 Landlords Property Rental Guide www. ü Tenants deposit registered with an approved tenancy deposit scheme. If they are disinterested and unreceptive to your requirements. As long as price is constant between your preferred agents. pick your favourites and contact them to find out there fees and what is included in that fee. then you should select the one that gave you the best service when they were mystery shopped. agents charge the equivalent of one months' rent as a fee for finding you a tenant and signing them up. If they are friendly. helpful and approachable then you are on to a winner. but from experience I would say that most agents will be offering the same service at the same price (one month’s rent). How many viewings on your property are they likely to get you? I recommend that you try this with a few agents. Usually as a guide. ü An approved tenancy agreement drawn up and signed ü All viewings carried out on the property (if you don’t want to do them yourself). Providing a good level of service to prospective tenants is what will ultimately find you a good tenant in the shortest possible time.com . price and what’s on offer will play a part in your decision making process. then imagine how a real tenant is going to feel coming into that agency. potential tenants. Obviously.
(which isn’t massive amounts) then you can find a tenant that is checked and referenced very cheaply.lettinglinks. Now for me in a majority of instances this amounts to anywhere from £550 – £800. so let’s say that an agent takes an equivalent (in most cases) of one month’s rent as a finder’s fee. 6 Landlords Property Rental Guide www. but if you have the time to spare. I’m sure that this figure varies for many of you but for arguments sake. It does require more of your time initially than instructing an agent. I would expect – ü My property advertised. ü A tenancy agreement drawn up. So for £550 what do you get as a landlord desperate to fill his/her void property? Typically. if done correctly. is by far the most cost effective way of renting out your property. ü Viewings carried out on your property. ü An inventory completed on my property. ü Tenants deposit registered with an approved UK tenancy deposit scheme and collection of my first month’s rent upfront.com . Finding your Own Tenant Finding your own tenant. ü A tenant that has usually been through an approved tenant-referencing scheme. let's use the lowest figure of mine for this. OK. If you are unsure as to whether it is worth reading on to learn how to do it yourself then let me show you an example of how much money you could potentially save.
However.com . Reason Conduct them yourself. this is purely speculation. There is nothing to say you won’t find a tenant as quickly as an agent. if you advertise in the right places. After all. From here on in. Place adverts on free websites etc. So.lettinglinks. the tenants on the agents database are human beings and don’t just exist in that one arena. TOTAL COST = £75 TOTAL SAVING: £550 . and that you may possibly find a tenant faster with an agent. the guide is dedicated specifically to those who want to know how to rent out their property for themselves. * Tenant pays for this. Video Inventory 7 Landlords Property Rental Guide www. if I do all this myself how much would it cost? (Prices stated are correct on date of publishing 30/03/2011) Task Property Viewings Advertising Tenant Referencing Completed Inventory Tenancy Agreement Register Deposit Fee £0 £0 £0 From £55 (Based on 1 bed flat) £20 £0 LawDepot Deposit Protection Service * explained in more detail further on. Thus saving you money in terms of how long the property is void.£75 = £475 (every time you rent out your property). I will accept that this is a raw saving.
3. The potential for the defect to cause more damage to other things if it is left unattended. All issues that fall under this category must be rectified before the property is placed on the market.com . Remember a shabby looking property will remain void for far longer than its tidier competitor will. Problems that fall under this category are not so much a safety issue but are more in line with longer-term money saving for the landlord. Cash flow is the main factor that keeps a business running so it is about prioritising works that need to be done in order to maximise the potential for the property to rent out quicker. A property portfolio should always be viewed as a business and therefore run like one. Preparing Your Property for Market Before you decide to market your property in the public domain. any defect that is found that has the potential to affect various parts of the property if left unattended should be fixed sooner rather than later.lettinglinks. An example of this would be a 8 Landlords Property Rental Guide www. From a money saving point of view. Void properties cost money to maintain and have no income coming in so we want to minimise these periods as much as possible. Its false economy thinking to believe that by leaving jobs unattended you will save money. How Prioritising Works When prioritising works you need to consider three things: 1. How detrimental is the works to the condition of the building structurally or is it a health & safety issue? 2. it is essential that you ensure the premises are in a decent state of repair. You have a duty of care to anyone that occupies or visits the property within reason. How does it affect the overall appearance of the property? Structural and Health & Safety issues are obviously a priority.
if the driveway looks small but you know that you can fit two cars on it then make sure two cars are parked on it when the viewing takes place – simple! As with the example of the driveway. Keep colours neutral so they appeal to a wider target audience. which can affect plaster. However. Many tenants are not property expert’s so place a heavier weighting on appearance when they are making decisions on properties. if the same problem is left for a longer period. Can you see the difference? Now the job has escalated into a far more costly problem to rectify. A tip to remember – don’t let all the hard work inside the property go to waste by neglecting the outside grounds.lettinglinks. This is a small problem if dealt with immediately and the costs are limited to labour and possibly a scaffolding tower. I find that fresh neutral coloured suites and kitchens usually go down the best. if you have rooms inside the property which are deceptive in size then put furniture in them. For example. The two biggest impact rooms are the kitchen and bathroom so if you are going to spend money anywhere then these should be at the top of your list.com . The other point to consider is how the problem affects the overall appearance of the property. a single bed in a box bedroom. do what you can to make them look practical. For example. The front of the property is the first thing tenants will see so make it look nice and presentable. woodwork and possibly furniture. If driveways look deceptive in terms of size. This will help to ease any doubts that viewers may have regarding fitting various items of furniture in. decoration. 9 Landlords Property Rental Guide www. Again. it has the potential to cause far more damage. blocked gutter. Appearance and first impressions count massively when trying to rent out your property. Keep gardens neat and driveways clear and clean. A simple problem such as this can develop into water ingress inside the property. This is not as serious as a health and safety repair but problems of this nature are far more common and therefore shouldn’t be discounted. Simple things like having the property professionally cleaned and fresh decoration can make all the difference.
Most people that are looking for family sized properties will want a nice maintainable garden for their children to play in or to entertain in. Therefore.lettinglinks.com . 10 Landlords Property Rental Guide www. it is worth making sure that the gardens are in a tidy state and are as ‘child friendly’ as possible. Once the property is safe and presentable then you are ready to place the property on the market and take on viewings.
you can look for free ways of advertising your property to these people.? Once you have identified your target audience then you can advertise in areas or mediums that attract these types of people. you have a legal requirement to ensure that an Energy Performance Certificate is issued on your property. Taking free methods of advertising first. Are they young professionals. But before you decide where you are going to advertise you need to know your preferred type of tenant. families. single people. Failure to comply with the legislation will leave you liable to considerable fines. These are relatively inexpensive (£40 . An EPC must be in place before the property is actively marketed.com . with the legal jargon out of the way let’s move on to the issue of how you can market your property without using an agent. older couples. There are two types you can pursue.lettinglinks.£85 on average) depending on your location in the country and they are valid for 10 years. once you have identified your target audience. Good examples of free advertising are bulletin boards at the local supermarkets and newsagents. paid or free advertising. You can obtain one of these by instructing an accredited Energy Assessor only. local hospital 11 Landlords Property Rental Guide www. Before you actively market your property. You can choose one or both of these options and run campaigns simultaneously. Ok. students etc. local university housing offices if you are interested in targeting students. This is relevant to all properties marketed for sale or let in England and Wales. Where and How To Advertise? There is a small caveat that I need to make you aware of regarding the latest legislation before we look at this section.
The use of bullet points is strongly recommended for this. Some say to leave it off because it generates enquiries to know more about your property. for you to choose from. there are online methods as well as offline methods that fall into this category also. All you need to do then is link the advert to either your own webpage that advertises your property or an external site that you have it registered. It would be up to you to research more thoroughly into its cost effectiveness. NOTE – I always include price on my advertisements. A tip for offline marketing. or month) etc. number of bedrooms. Social media advertising is another great way of advertising. Loot. Online there are a number of free property websites such as Vivastreet. how often you want it to feature in the paper (day. Moving on to paid for advertising. This is just an idea though. price etc.lettinglinks.com . and many more. if you type in ‘free property ads’ into Google. week. UKclassifieds.g. bulletin boards. One that I haven’t personally tried but thought could be a good way of targeting certain tenants would be to advertise in magazines that you think they may read. How much you pay will depend on the size of the advert. Keep the advert snappy and only mention brief selling points e.com. Beware this can become costly quickly in my experience so try to use this as more of a secondary measure if interest is low from other avenues. if it’s a colour or black and white advert. 12 Landlords Property Rental Guide www. If you have a Facebook account. make sure that your advertisement is computer generated and has a nice photo on so it stands out from the rest of the advertisements next to where it is placed. Local newspapers will give you a slot in their property section. Offline paid advertising mainly consists of placing adverts in local newspapers. However. Adding the price saves you time dealing with non-serious enquiries. whether or not it has a picture. the way I see it is you get enquiries that are far more genuine if they know the price before they call. you can create an online advertisement in minutes that will appear on targeted peoples profile pages. new kitchen & bathroom.
I don’t want to go into great detail on how to advertise on Facebook. I may publish a post on the blog explaining this in more detail if subject to interest levels.lettinglinks. 13 Landlords Property Rental Guide www. With the number of advertising mediums that are available to you both online and offline. The only site that I know of that currently accepts an individual landlord advertisement is Rentright. This is a great benefit as you get exposure to the advertising mediums that agents use but for a fraction of the price. Remember though with Facebook you could simply post a comment on your wall with a link to your property for free and let all your friends pass it on to their friends who can pass it on to their friends…etc! Some of the leading property web portals that agents advertise on (mentioned before) do allow for individual landlords to register an account with them and advertise through them directly for a fee. there are plenty of eBooks out there that can assist you with this if you need help. Facebook advertising is not free but you control how much you want to pay for the traffic to be sent to your property page. there is more than a good chance that you will be able generate enquiries and find yourself a suitable tenant.com .
it’s your house right? Stand outside of your home for a minute and picture your house from an outsider’s perspective. right? Wrong.lettinglinks.” 1) Would I want to live here? I know this sounds subjective. and they need to see that the home can work for what they need. Try setting the rental home up to match a magazine shoot. ask yourself these questions.com . Style is everything to potential clients. and answer them honestly. Simple things like a new light fixture in the bedrooms can do wonders for the overall feel of the house. Tenants are looking for the perfect place to rest their feet at night and you need to help them get that mental image. it’s something almost every new landlord can do. Keep the lines clean. even if you don’t have children) on the coffee table. it doesn’t have to be perfect. Conducting Viewings Before your potential tenant arrives. If your rental flat is a family place. Chances are if they’re from the last decade. 2) Is the property clean? I know – you’re renting it. Make sure the home is presentable on the outside. and remove all clutter. Is the exterior clean? Are there cracks in the cement or driveway? Is the lawn kept nicely or are their weeds scattered throughout? These are the first impressions a home will give to anyone interested in letting your property. after all. 3) Is it dated? Check the light fixtures and appliances in the rental home. it may be worth your time to upgrade them – especially if you are planning to charge utilities. to get your house from “for rent” to “let. consider having a neat stack of children’s books (yes. 14 Landlords Property Rental Guide www. and at a relatively low cost to change them. to get the tenant past your front door. normal size furniture.
make them feel as though you’ve known them for years. Once your rental home is set up for viewings. laugh and socialise with them. make sure to make the potential tenants feel invited and welcome. Smile.com . Your rental home isn’t the only thing they’re signing up for.lettinglinks. 15 Landlords Property Rental Guide www. they’re also signing up for you as their landlord.
call past landlords and current employers and run a credit check. while others will investigate the information personally. Tenant selection Criteria There are a number of things to consider when selecting your tenant. Some landlords use screening services provided by private companies.com . Using an objective national credit-reporting agency can help landlords determine if their prospective tenant has had any history of late payments. 16 Landlords Property Rental Guide www. and whether they are the sorts of tenant you are looking for. It all helps to give you an impression of what the applicant is like. Rule number 1 – Never rely on gut instinct alone! The first and most fundamental way to collect substantive information on prospective tenants is to have them complete a tenant application form. This will give you an insight into their background and support evidence obtained from any check that you might conduct on them. Either way. landlords should conduct a background check. Another useful source would be to chat to any friends/relatives that the prospective applicant might bring along with them.lettinglinks.
and rent is 17 Landlords Property Rental Guide www. This will give an idea of the tenant's credit. this can be used to give vital tracing information. To check the person is who they say they are 2. Entitlement to work in the United Kingdom (Non EC nationals only) 3.g. How to Obtain Credit and Reference Checks Yourself The purpose of referencing a tenant is: 1. because should the tenant subsequently abscond or leave owing money. salary) is in the account. mobile phone bills or bank statements. and whether money (e. this document provides evidence for eviction.lettinglinks. In addition. Recent statements for the tenants' current account can be particularly useful.com . you should ask for documentation providing proof of: 1. That they can afford the rent and 3. Identity. which should contain a statement giving you permission to carry out credit checks and seek references from employers and previous landlords. The more information collected on the tenancy application the better. In addition. CHECK TENANTS PREVIOUS ADDRESSES To check current and previous addresses ask the tenant to show you their last three utility bills. should the applicant make false statements. That they have honoured past commitments TENANCY APPLICATION FORM The starting point for any tenant reference check is getting the tenant to complete and sign a tenancy application form. Current and previous address 2.
being paid. If letting to students. Don’t assume the company they say they work for really exists. accountant or clients to prove their past and / or future income too. Used in this way it acts as an additional check on the employer's and current landlord's references and provides further proof as to whether they are meeting their obligations. Don’t be afraid to ask them to get their agent. For these reasons.lettinglinks. Tenants working on contracts or freelance should be asked for evidence of current contracts and regular income over a period of at least six months.which you can check by looking at the land registry website. it’s also best to get a reference from the landlord before the last one.com . Ideally. Check all tenants references carefully and call to verify them. REFERENCES FROM CURRENT AND PAST LANDLORDS It is possible that the tenant's previous landlord will say anything if it helps to get rid of the problem tenant onto someone else. Do background checks too. 18 Landlords Property Rental Guide www. as well as being listed on the tenancy agreement as guarantors. parents should be referenced too. guarantors should be homeowners . Anyone can mock up a convincing letterhead! Check the company out at company’s house and on the web.
This can all be outsourced for a one off fee of around £30 to companies such as Rentguard. You can do a basic one for less than £15. check whether it is a limited company and assess its financial worth by obtaining a copy of their report and accounts from Companies House. check the individual’s references as you would any other person.insist on a deposit and cleared funds before anyone moves in. Don’t accept a “letter of guarantee” from a company either . The credit reference report will usually include a score. The report should also tell you whether they have something negative in their credit history. put the tenancy in the tenants name rather than the company. like a CCJ. Then. Anyone who owns their own home and has accounts they keep in credit will have a good credit score but someone who is highly indebted with lots of accounts can get also get a good score as long as they are meeting their repayments. which is a vitally important part of what landlords do. 19 Landlords Property Rental Guide www.lettinglinks. do a credit referencing check. This is just a very rough guide of the basics of tenant referencing. You need common sense to interpret credit scores and be prepared to read the score together with other information. which can be used to assess whether the tenant is a good risk. especially if they have assets like a house elsewhere. If there is any doubt about the company’s stability.com . Credit Scores and Tenants As part of the referencing process. Letting To Companies If letting to a company.
it can also provide a general overview of the condition of the property’s external elements. Where necessary. The inventory will identify the condition of the walls. curtains. carpets. Should you decide to carry out the inventory yourself then the inventory must provide a fair. bathroom. 20 Landlords Property Rental Guide www. they will take care of the inventory process and can complete a check out inspection when the tenancy period ends. Complete a summary of condition for each of the main elements of the property on a room-by-room basis. For a fee. stains and any damage.com . objective and impartial record of the general internal condition of the property and its contents. Now it has been established that you should obtain an inventory for your property the only decision you need to make is are going to do this yourself or pay an inventory provider to complete one for you? If you are going to employ a professional then you can find an approved inventory specialist by visiting the Association of Professional Inventory Providers. Getting an Inventory/Schedule of Condition Report It is not mandatory to have an inventory carried out on your property prior to renting it out. Therefore. an inventory is still required even if it is to be rented out unfurnished. together with its contents supported by photographs. Take photos identifying all marks. It is however. These photographs will complement the written description of your inventory and help to avoid any unnecessary disputes. scratches. strongly recommended that you do commission one. Not having a property inventory can prove to be costly for a landlord and make it impossible for the Alternative Dispute Resolution (ADR) service to determine any loss or damage to your property or its contents. kitchen appliances and the property at time of inspection.lettinglinks.
from law sites such as Law Depot. There are a number of tenancies agreements that you can choose from based on your needs but for the purposes of this eBook we are only going to deal with tenancy agreements that fall under the Housing Act 1988 (Assured Shorthold Tenancies (AST’s) and Assured Tenancies). There are a number of websites that offer tenancy agreement templates. AST’s can be created and downloaded off the internet. These are standardised agreements and are good to go. Where and How to Get Tailored Tenancy Agreements The tenancy agreement is a contract between you and your tenant. Site such as this enable you to see all the clauses associated with this type of contract.com . Tenancies under the housing Act 1988 are automatically AST’s unless it states otherwise in writing. your tenant’s right to occupy the accommodation and your right to receive rent for letting the accommodation. These are just the sources that I use so feel comfortable recommending. It may be written or oral. for example. giving you the option to include or remove which ever you want.lettinglinks. The tenancy agreement gives certain rights to both you and your tenant. Alternatively. However. oral contacts are very hard to prove in the event of any disagreement and are not appropriate for renting property. 21 Landlords Property Rental Guide www. you can purchase hard copies from bookstores such as WHSmith’s.
Registering Tenants Deposits As part of the Housing Act 2004. As a private landlord. The DPS also provide a free Alternative Dispute Resolution service that is independent in the event that you encounter any disputes over damage to your property without the need for court action.lettinglinks. You will be provided with an online account where you can view your deposit details. this service is free to use and the funds deposited are secured with UK Government approved banks. The service is provided online which means you can register easily. The easiest way to do this is by registering with The Deposit Protection Service (DPS). The landlord should protect all deposits paid under an AST within 14 calendar days of receipt. update details of tenants and request the release of the deposit at the end of the tenancy. 22 Landlords Property Rental Guide www. the Government has introduced tenancy deposit protection for all assured shorthold tenancies (ASTs) in England and Wales where a deposit is taken.com .