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Now that you have found your buy to let property, you need to insure it. Buildings insurance covers the risk of damage to the structure and permanent fixtures and fittings of a building. If you have purchased a freehold property you need to obtain buildings insurance. If the property is leasehold, then the freeholder will normally arrange the insurance and pass the costs to the lessees. Tenants are usually responsible for providing their own contents insurance to cover their personal belongings.
As a landlord, you should take out contents insurance to cover loss or damage to household goods that have been supplied by you such as white goods, carpets and any furniture or fittings. We recommend purchasing landlords’ building and contents insurance which should also cover malicious damage. Landlord’s insurance is often cheaper than residential as there tends to be fewer claims, as damage is often covered by the tenant’s deposit.
It is also possible to take out a rent guarantee policy which will ensure the rent is paid if the tenant falls into arrears. Premier Lets and Sales have a range of specialist products available for landlords and tenants.
There are generally three types of services offered by a letting agency.
This is the most popular service as the agent will take care of everything – you need do nothing! The agent will attend to repairs, renew the tenancy, manage the tenants, inspect the property, serve notices and collect the rent. The landlord pays a percentage of the rent to the agent for managing the letting, all agent fees can be offset against your tax liability.
This option is often chosen by builders and landlords who wish to undertake their own repairs and have the necessary time to do so. The rent will be collected, tenancies renewed and any notices served.
This option is generally only used by professional landlords who have a good knowledge of property law and, again, the time to manage the lets. The landlord is normally charged a one off fee, normally two or three weeks rent, depending on the length of the tenancy. Never be tempted to find your own tenant. Most tenants search for their property using the internet property portals such as Rightmove. These portals advertise nationally and are well known to potential tenants through their television and radio advertisments. Private landlords are not allowed to use these sites and so can only really advertise in the private ad section of the local paper. Tenants that cannot use an agent
because they have a bad credit rating or have been evicted tend to answer these local ads in the hope that they would be able to hoodwink the landlord into accepting them. Furthermore the landlord would miss all the professional people who only tend to use regulated and licensed agents.
Also beware of agents advertising low commission rates. They can generally only offer these rates because they do not spend much money on advertising to find suitable tenants. The agent may not achieve the highest rent for your property and if a property is empty between lets forlonger than necessary, then the small amount of money saved on agency fees is soon wiped out by loss of rent. With over 130 regulations affecting letting it is extremely important to only employ qualified and regulated agents. To be part of a professional body, such as ARLA, the agent has to be qualified and has toundertake
regular training to keep abreast of all new regulations.
The decoration and presentation of your property substantially affects the level of rent that you will achieve and the time it takes to let. Premier Lets and Sales have a property management department that can arrange any pre-letting works on your behalf, using our pool of local and trusted contractors. Any costs to prepare the property can be offset against the rental income.
Follow the following guidelines for decoration and presentation to maximise your return.
Be careful when buying a property that has a history of damp. Some very old properties have solid walls and are prone to damp. This may be fine for an owner occupier who has perhaps brought the property cheaply, but these properties are not suitable for letting, as a tenant could not be expected to reside in a damp property.
For flats that would appeal to first-time renters, it is advisable to supply kitchen appliances, such as a fridge/freezer, washing/tumble dryer and cooker. You should not supply portable small appliances such as a microwave, kettle or toaster. Landlords are responsible for repairs and maintenance of any appliances provided unless agreed otherwise. In smaller properties we recommend supplying a combined washing/dryer machine to deter tenants from drying wet clothes on radiators as this can cause condensation problems. You may also consider supplying a dishwasher, even in a small property, or at least leave space for one.
If you need to replace the kitchen, choose a modern kitchen in neutral colour, such as white or wood. Large DIY stores have great ranges and often offer 0% interest free credit to pay for it. Don’t put an expensive kitchen into a rental property but do consider incorporating a breakfast area if there is no dining space. Family homes are a different matter and it maybe that these can be provided without appliances as families often have their own. Be flexible. If the lack of a cooker is a potential deal breaker, then it’s better to supply one!
Tenants nearly always demand a shower in a rental property and it’s always preferable to have both a bath and shower. A low cost idea to create a shower is simply to change the bath taps to a mixer with shower attachment and install a shower screen or curtain. It is also advisable to supply basic bathroom accessories such as a towel rail and mirror.
Condensation is often a problem in bathrooms, particularly in shower rooms. Tenants may not open the windows, particularly in cold weather, so it is advisable to install an extractor fan where possible.
NEVER LAY CARPET IN A BATHROOM!
We don’t recommend that you supply curtains as tenants will prefer to choose their own to match their taste and ready-made curtains are very cheap to buy. If you already have curtains in the property, you may leave them so that the tenant can either use them or store them if they prefer to use their own. However, we do recommend that curtains poles or rails are provided.
At the commencement of a tenancy the property must be in a thoroughly clean condition, and at the end of each tenancy it is the tenant’s responsibility to leave the property in a similar condition. Where they fail to do so, cleaning should be arranged at their expense.
Unless you have a passion for cleaning, we recommend that you have the property professionally cleaned. This minimises deposit disputes at the end of the tenancy and the cost can be deducted from the rental income. The cost of a professional clean for a one bedroom flat is around £50. Premier Lets and Sales can arrange this service for you.
All personal possessions, ornaments, pictures, books etc should be removed from the premises, especially those of real or sentimental value. If you have to store items in the property some items may be boxed, sealed and stored in the loft at the owner’s risk. Please remember you may not be able to access them as quickly as you desire. All cupboards and shelf space should be left clear for the tenant’s own use.
Make sure everything works and carry out minor repairs including fixing leaky taps, filling any cracks in the walls, replacing broken or crooked tiles and replacing burned-out light bulbs.
Decorate rooms if required – a lick of paint can re-energize the appearance of a room. Ideally the property should always be decorated neutrally so that your property appeals to the largest market. Paint is preferable to wallpaper because it is easier to maintain. Use durable paint that can be wiped clean and paint bathroom and kitchens with mould and water-resistant paint.
If the property has an open fire than the chimney should be swept before the property is let out and then swept at least once a year.
If carpets need replacing then choose reasonably priced, hardwearing carpet in neutral colours, preferably with a speck or multi-colour, which will hide stains. Landlords rarely replace carpets because they have worn out – they are nearly always replaced due to damage or staining.
Don’t buy carpets that appeal primarily to your sense of aesthetics, buy with maximum practicality in mind. There is one exception to this rule, which is when you are letting to professional tenants who will demand up-market furnishings and can be relied upon to look after the house and fittings.
We recommend choosing carpets made of polypropylene as this material is the most stain resistant and is often guaranteed by the manufacturer to be bleach proof. Polypropylene is very easy to clean and is the most moisture resistant type of carpet. It is available in either loop pile or cut pile.
A loop pile, such as a berber or cord, is the best pile to lay unless the property is likely to attract tenants with pets, in which case we would recommend a polypropylene cut pile instead, such as a ‘twist pile’. A loop pile will run or unzip if one of the loops is caught by a pets claw. The only downside to polypropylene is that it is prone to flattening, although much less so with a loop carpet than cut pile.
Choose a carpet with felt backing as this saves on underlay costs.
These are durable and easy to clean, but do check when you own a leasehold property as some leases insist that properties are carpeted to reduce sound nuisance.
We think that an excellent choice for flooring in rental properties is vinyl backed wood effect flooring. It’s as cheap to buy and lay as carpet but can be wiped clean, doesn’t show the dirt and will blend in with any furniture. The tenant can then lay rugs, if desired. This flooring is also suitable in the bathroom and kitchen. Lots of different designs are available which can be matched with worktops or kitchen units to create a good look.