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Do you own a residential property and wish to let it?
Do you know how you are going to let it?
Would you like to let it without using an agent?
The Bright Property website hopes to offer you a straightforward approach to letting residential property. The key to successfully letting is ensuring that it is marketed appropriately, which can be difficult. This is where Bright Property can help. To assist you in this process we have produced this step-by-step guide to the key points you need to consider when letting.
STEP 1 - CONSIDERATIONS
- Check with your mortgage lender than you are permitted to let out the property.
- If you live in a Leasehold property you will need to check with the Freeholder that you can
sub let.
- Your insurance cover may need to be increased if you let your property
- If you are going to let your property on a multiple occupation basis - several
independent Tenants sharing one property - then you may need to register your property
with the local authority as a House in Multiple Occupation (HIMO).
- You will be liable to pay tax on your gross income from rents.
The type of property and its condition will have an influence as to the Tenants you will attract.
As a Landlord you will need to ensure that the property is in a reasonable condition. Therefore it
is advisable to ensure these are in good working order at the start. You will be responsible for the following:
- Repairs to the structure and exterior of the property,
- Heating and hot water installations, basins, sinks, baths and other sanitary installations
- All gas appliances and systems must be safe and regularly maintained. A Landlords Gas
Safety Certificate needs to be obtained from a Corgi Registered Installer and renewed
- All furniture supplied with the letting have to comply with the Fire Safety Regulations.
All furnishings that are covered by the regulations should display a permanent label stating
they are Fire-resistant.
- Ensure that the property is fit for habitation
- Repairing and keeping in working order the room and water heating equipment
- All electrical appliances should be serviced, in good working order and the supply safe.
It is advisable to supply Instructions for the use of all electrical items. A Periodic
Inspection Report for an Electrical Installation by an approved contractor is strongly
recommended.
- All properties built since June 1992 must be fitted with mains operated linked smoke alarms
on each floor. Older properties are not covered by the regulations, but it is strongly recommended
that smoke alarms are installed in all let properties and regularly checked to make sure they are
in working.
STEP 2 - RENT & MARKETING
Rent
This will be dependant on the condition of the property, whether you are offering it furnished
part furnished or unfurnished and what amenities it has to offer.
Looking in the local property pages this gives you an indication as to the rental value of
similar properties.
Be realistic when pricing your property, if you undervalue it you could be inundated with people
looking for a bargain and then you could be disappointed when you don’t achieve the price you
want. Or alternatively by overpricing you may detract potential Tenants.
Marketing
The purpose of Bright Property’s website is to give you the best tools to market your property.
All you need to do is decide which package you think will be most appropriate for your property,
take photographs, measure the rooms, decide what is to be included and identify the key features.
Once this information has been entered into your Bright Property advert then you are ready to
go.
As soon as the board is received make sure that you put it up straightaway as apart from the website
this is one of the most effective ways of potential buyers identifying your property.
STEP 3 - VIEWINGS
As soon as your advert is live, be prepared to respond to enquires quickly, as a delayed
response may result in a lost Tenant.
As with most Letting Agents you will be expected to conduct the viewing. Usually viewings are
by appointment so that you can ensure that your property is presentable and that you are available.
Things to bear in mind:
- Be aware that you are allowing strangers into you property and therefore make the
necessary provisions.
- Think of questions that you may wish to ask your prospective Tenants such as:
- Do they smoke?
- Do they have pets?
- For how long do they want the property?
- Will they be claiming housing benefit?
- Demonstrate the best use of a space – e.g. the spare bedroom with a bed in it rather than boxes.
- Print off Bright Property’s online details so that you can give to potential Tenants.
- Focus on the positive aspects of the property, e.g. the beautiful views from the bedroom, proximity to local services
- It is worthwhile getting feedback from viewers as to what they liked disliked about the property
so that you know what changes you can make. Follow up the viewing with a phone call or email.
STEP 4 – TENANTS CHECKS
It is advisable to make some checks as to the identity of your prospective Tenants.
The following provides a guideline of the checks to be made:-
- Personal references – verification of character
- Names of employers – their employment status, how long they have been employed, verification
of character
- Former Landlords – rent payment history, any breach of tenancy
- Verify bank information.
- If self employed contact their Accountant or Solicitor for a referee.
- Order credit reports from a major credit reporting company
- Check to see if the prospective Tenant has any County Court Judgements, or been Bankrupt.
- Contact an agency that specialises in screening Tenants, such as:
http://www.tenantverify.co.uk/
http://www.rentchecks.com/
- It is not unknown for administration charges to be made in respect of obtaining references
which may be passed on to the prospective Tenant.
STEP 5 – TENANCY
It is important to ensure that you document the letting to a Tenants setting out the rent and
parties responsibilities. The most common tenancy agreement used is an Assured Shorthold Tenancy.
This type of tenancy offers the most flexibility to both Landlord and Tenant; has straightforward
notice procedures for bringing the tenancy to an end and a special Accelerated Possession court
procedure should Tenants fail to vacate.
“Joint and Several” Responsibility
If there is going to be one (adult) or more persons living in the property, the tenancy
should state “jointly and severally” responsible. Therefore each Tenant is equally responsible
and liable for the payment of all rents, all liabilities falling upon the Tenants during the
tenancy and any breach of the Agreement.
There are a many ready made tenancy available to purchase if you do not want a solicitor to draft one.
http://www.clickdocs.co.uk
http://www.lettings-landlords.co.uk/info/tenancy_agree.html
“Assured” Tenancy
There are other tenancies such as the “Assured” tenancy. This gives Landlords very
limited circumstances in which possession can be obtained and the Tenant may be able to obtain
long term security tenure
Tenancy Deposit
It is usual for a deposit of between one and two months’ rent to be held during the tenancy. The purpose of the deposit is if the Tenant does not comply with the obligations of the tenancy agreement such as keeping the premises clean, paying the rent, the Landlord can use the money to remedy the breach. The Tenancy Agreement should set out:
- who is to hold the deposit (e.g. Agent or Landlord)
- whether interest is to be paid or not
- what the deposit can be allocated for
- the end of tenancy procedures and timescales for its refund
With effect from the 6th April 2007 all deposits, up to the level of £25,000, taken
by landlords for Assured Shorthold Tenancies in England and Wales must be protected
by a tenancy deposit protection scheme. Tenancy Deposit Protection has been introduced
to ensure good practice in deposit handling, so that when a tenant pays a deposit,
and is entitled to get it back, they can be assured that this will happen. It will
also encourage tenants and landlords to have in place, from the outset, clear agreement
on the condition of the property through the use of inventories.
The landlord not the tenant – will have the option to choose whether to safeguard
the deposit in the custodial or insurance-based scheme. A landlord will have 14
days to safeguard a deposit from the day he receives it. The landlord will have
to provide the tenant prescribed information about the scheme safeguarding the deposit
within 14 days. To avoid disputes having to go to the courts, both schemes
will be supported by an Alternative Dispute Resolution (ADR) service, although
the use of this will not be compulsory. When the landlord and tenant agree how the
deposit should be returned, in full or in part, it must be paid back within 10 days.
The Government awarded contracts to three companies to run the tenancy deposit schemes:
Landlords that
fail to use the scheme could be faced with a fine of three times the deposit if
the tenant takes the matter to court or the landlord is unable to use ‘notice only’
possession procedure for regain possession of the property if there is a breach.
For further information go to http://www.tenantdepositscheme.co.uk
Inventory
If you are letting the property part or fully furnished it is important to list all the
items included even down to the last teaspoon! You may even wish to record the condition of
the premises with photographs. By having a full inventory this will hopefully eliminate any
misunderstandings at the end of the tenancy. Both parties should agree and sign the inventory.
Rent Payment
Decide how you wish the rent to be paid – standing order, direct debit etc. If using either of
these methods ensure this is place. Usually the first months rent and the deposit is paid on the
day the tenancy commences. Agree how this is going to be paid and it would be advisable to give
the Tenant a receipt.
BOTH PARTIES MUST SIGN THE AGREEMENT IN THE PRESENCE OF A WITNESS.
STEP 6 – PRIOR TO LETTING
- Read all meters.
- Advise utility companies, TV licence and the council (Council Tax) that payment will be
received from the Tenant
- Redirect your mail
- Clean and tidy the property is as clean and tidy, mow the grass etc.
- Leave instructions for all appliances.
- Show the Tenant where all the vital connection points for gas, water and electricity are.
- Label stock cocks, fuses, switches in boiler, etc.
- Provide sufficient keys for all doors, windows alarms etc. Demonstrate how to use them.
- Provide contact telephone numbers in case of emergency.
- Advise what to do in an emergency, fire, flood, boiler break down etc and who to contact.
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