How to add value to a rental property

With the private rented sector continuing to account for millions of UK households, there’s little doubting the competitiveness of this vital part of the British economy. However, whatever corner of the rental market, there are always ways to further bolster the earnings from a property portfolio…

Offer something more to your target tenants

What kind of tenants would likely be attracted to the rental property in its current condition and location? This is a major factor in maximising it’s value. If the property is near a university for example, the surrounding area is probably a desirable hotspot for students – in which case, something as simple as internet access may be a considerably alluring extra for such prospective tenants.

Your property being in a ‘student’ area also doesn’t necessarily force you to cater solely for more cash-strapped tenants. You could increase the amount you are able to charge in rents by targeting wealthier students – as is often the case for those coming from overseas – or even lecturers seeking a nice rental home close to their place of employment. Once you’ve pinned down who you’ll be aiming your property at, you’ll then be able to ask yourself what ‘extras’ will be especially enticing for them.

Ensure the property is in the best possible condition

All tenants are going to want a property that looks and feels nice to live in, so the condition of a rental house or apartment is super important. Even just having a thorough, deep clean once the previous tenant has left can make a major difference to the perceptions of potential tenants who come to see the property, so get those marigolds on or call in the professionals.

If you wanted to step it up a notch, get a lick of paint on the walls. Every little thing you do to enhance your property’s appearance and state of repair could make a prospective tenant more likely to choose it or accept a higher rent when comparing it to alternatives.

Also, remember that there’s a greater tendency these days for tenants to spend years in a property rather than rent on a temporary basis. That heightens the importance of keeping your property well-maintained, including by avoiding or addressing any damp or condensation issues as well.

Prioritise the kitchen and bathroom

There’s no ‘unimportant’ part of the rental house or apartment of course, but when you have only limited time or funds to spend on your property, it makes sense to target those areas that make an especially strong impression on the tenant, which is likely to be where they’ll spend a lot of their time.

In that sense, the kitchen and main bathroom should be at the top of your list. You might want to fit a whole new bathroom or kitchen, but if your budget does not stretch to this then even just a fresh coat of paint, new taps and appliances, a power shower or a glass screen could make a big difference.

Consider a house extension or loft conversion

Many landlords, especially those catering to the student market, opt to rent out individual rooms rather than their entire property to a single tenant. That’s certainly one way to gain more income from a single property, but what if the property isn’t large enough for that?

Why not look at having your property extended? That way, you can add more space that can be converted into rentable rooms. A well-done house extension or loft conversion can offer many possibilities, such as turning a two-bedroom home into a three-bedroom home in an area where there may be a lot of demand for the latter. On the other hand, perhaps a lounge, or something novel such as a home cinema or games room could help to maximise the appeal of your property to your target tenants.

Remember that any changes you make to your property may still need planning permission and to pass building controls. Nonetheless, if you get your changes right, you can look forward to boosting not only the rents you’re able to charge but also the price your property commands if you one day but it up for sale. Win-win!

Make sure you have the right landlord insurance in place

Given all of the time and money you’re likely to have spent on your property, the very least you should do is ensure that your investment is protected. That’s precisely what a suitable landlord policy will enable you to do. What’s more, you can find the ideal policy so much more easily with the help of our independent, whole-of-market comparison service here at Protect Your Bricks.

From buildings and contents cover to specific protection against such common perils as fire, flood and theft, there’s so much that can be covered within a landlord insurance policy – and Protect Your Bricks can guide you towards a policy that meets all of your requirements.

Letting to Students

Some may be daunted by the prospect of letting to students but opening up a rental property to this demographic often proves to be very fruitful. In fact, 14% of landlords let to students and most of them never encounter any problems. Like everything, with pro’s there comes cons but with a good understanding of the market, there’s no reason why student lettings can’t be smooth and stress-free.

If you’re considering renting to students, take a look at the pros, the cons and the processes you should follow throughout in order to avoid any tricky situations…

What are the benefits of renting to students?

The first huge positive in renting to students is the constant demand. There’s around 2.2 million students in the UK, and in most university towns there’s not quite enough student housing to meet the need for it. During term time, there’s often a rush to secure a house within reasonable proximity to the universities and landlords are rarely left short of applicants. Plus, students don’t ask for much. They simply need somewhere that’s functional with affordable rent.

Speaking of rent, students will often rent out a room from you, as opposed to the whole house. This is super beneficial to landlords as it means that you’d be receiving more money in rent payments than you would with a family renting out a house, for example. Think about it; if you have a four bedroom house and each student is paying a decent sum of money for their room, that’s a fair bit of income. Plus, you’re generally guaranteed at least nine months of it during term time and should you have tenants drop out and leave your property, there will always be tenants ready to snap up the newly available room.

Your advertising costs for tenants will be minimal as word of mouth in the student community is super effective. As previously mentioned, everyone is looking for student lets. And if you meet a few possible tenants that you’re unsure of for any reason, you have the flexibility of saying no as you won’t be short of alternatives.

You may think of students and think parties, drinking, accidents and damage. This isn’t an unjustified opinion – students are indeed stereotypically known for their many parties and drunken escapades. Obviously this is not always the case and many students lead a much quieter lifestyle, however if you do end up renting to a group of rowdy good-timers, you do always have the security of their guarantors – usually their parents – to fall back on in the event of any damages or late payments, should it come to that.

What are the downsides of renting to students?

Before rushing off and investing in a student property, it’s important to consider the downsides to renting to students. Again, their lifestyle can be an issue. They are likely to be inexperienced in both living away from home, so may not look after the property particularly well, and inexperienced in managing their own money. Students are famously financially challenged and paying the rent on time may not be their number one priority.

Students will expect their house to be fully furnished with beds, sofas and kitchen white goods as the basics, so this is an extra cost to content with. These don’t need to be frilly and fancy though. Prioritise sturdy and strong furniture that will be able to withstand a bit of wear and tear. Similarly, your decor doesn’t need to be anything special. We recommend neutral walls and dark coloured basic carpets that will hide marks and stains.

Despite the demand being high and always having your pick of the bunch with tenants, it’s important to remember that students do go home during the summer, so you may be left with an empty house for a few months. These days most landlords can get away with a 12-month contract, so if this is the route you want to go down then you won’t be left out of pocket.

What to remember when renting to students?

Once a property is prepped, furnished and ready to take on the world of student lets, it’s time to consider the necessary processes when securing the perfect student tenancy. The process shouldn’t be too dissimilar to regular tenancies but here’s a few things to remember:

  • Screen your tenants well. It’s important to follow the usual screening process, however you may come across issues when running a credit check. It’s not unusual for students to fail credit checks – they have probably never borrowed money, used a credit card or paid bills, so don’t let this put you off a perfectly suitable tenant.
  • Always ask tenants to provide a co-signer or guarantor who will be able to pass a credit check and pay the rent if the student cannot. Ensure you have contact information for these guarantors as they can help to resolve any problems with the tenant that you might encounter.
  • Meet the tenants in person and show them around the property. Show them how to use everything and try and build up a good rapport. The more mutual respect there is within the tenancy, the less likely your tenants are to be reckless with your home.
  • Conduct quarterly inspections throughout the tenancy to check for any maintenance or damage issues. Make sure that your tenants are aware of the deductions that you can make from their deposit for damages or the need for professional cleaners at the end of the tenancy.

Renting to students can be a hugely profitable and great market to be in – you just need to know your stuff. If you’re still wary, look at taking on a letting agent. There are plenty out there who specialise in student lets and can help you through each step of the way and handle the negative situations that might arise.

Be thorough, find good tenants and you’ll be in for a simple and rewarding tenancy.

Pet Policy Agreements

In our previous post we explored the reasons why landlords are resistant in taking on tenants with pets, and the changes on the horizon for pet policies in the UK. If you’re still feeling pretty daunted on the prospect of having to allow pets into your rental, read our clear guide on pet policy agreements below and take note of our tips to avoid accidents and damage from your tenants furry friends…

How to draft a Pet Policy Agreement

An official approach to form an understandable agreement between landlord and tenant would be to create a ‘pet policy agreement’. This is a written and signed document that sets the ground rules regarding pets in the property. It should include the right to arrive at the property for regular check ups and to inspect any damage, details on hygiene standards and what to do in the event of an accident caused by an animal.

It’s also a good idea to have your tenant sign an agreement to cover any cost incurred from damage caused by their pet by charging a subsidy on top of a month’s normal rent. Be sure to approach this in the right way, as you don’t want the extra charges to put tenants off. There’s a risky outcome of either losing a tenant or a property – so what can be done to help avoid both scenarios?

First Impressions Always Count

For a more personable approach, meeting the tenant and their pets is the best informal way to get a feel for their current living conditions and the pet’s characteristics. Here’s a handy guide to the first meeting:

  • Ask the owner about their pet: by letting your potential tenants provide a ‘Pet CV’, you can get to know the pet and make a judgement on whether you think it’ll be a trouble-maker. Maybe request some veterinary records to find out whether the pet has been neutered, microchipped, vaccinated and to see when they were last treated for fleas.
  • Meeting the pet: assess the pet’s persona, behaviour and interaction with new people. This will help you to determine the safety of your property and other tenants.
  • Initiate the pet policy agreement: by setting the ground rules early, it will save time and mean your tenant and their pet will consider long term residency. Create a reasonable outline with terms of inspection and/or cost occurrences, and include the pet’s veterinary information as proof of record. The policy agreement can also state future plans of the tenant bringing in more pets, by suggesting a suitable capacity number of pets that are allowed to be kept in the property.

Happy tenants, happy landlords, and wagging tails

According to MentalHealth.org and Mind, keeping pets provides a healthier lifestyle and a better state of mental health – especially for lonely people – improves depression, anxiety, ADHD and autism. Best of all, happy tenants with pets brings great assurance for landlords that they will stay put in the rental property for the long run, reducing the chances of all those void periods between tenants. Happy pet, happy tenant, happy landlord – a win-win situation!

 

Changes in Pet Policies – how does this affect landlords?

It’s no secret that we are a nation of animal lovers! Pets have become part of our homes and families for years; keeping us company on nights in or protecting our gardens from unwanted guests. They are the embodiment of making a house a home, right? Not according to many landlords. In recent years pet policies have become restrictive for tenants in rented accommodation. Many landlords outline strict rules on allowing pets to live in their properties due to claims of damage, infestation, noise and issues around allergies.

However, things are changing. Many regulations are being introduced to encourage landlords to be more lenient in their policies. Below we outline the updates in these pet policies and the reasons why landlords may still feel uncomfortable in taking on tenants and their furry (or scaly) friends.

How many Pet owners are there in the UK?

As there are nearly 20 million pet owners in the UK, these changes in policies will be applicable to many people and their pets. Let’s break the issue down into numbers:

  • 10.3 million homes currently own a cat, whilst 9.3 million own a dog
  • 78% of pet owners struggle to find rented places that are pet-friendly
  • 21% admit to secretly letting having their pets live with them anyway
  • 7% of UK adverts featured on SpareRoom would consider pets – dropping to 5% in the London area, equating to just one in 20 homes
  • 68% of landlords pet preference was a fish, followed by dogs at 57% and cats at 32%

Due to such a huge amount of UK residents being pet owners, landlords are likely to come across tenants hoping to move in with their pets very often. The answer is very often no. In fact, Battersea Cats & Dogs home state that 10% of their admissions are from landlords banning pets from residing in their rented properties. It is an unattractive prospect for many, however some tenants resort to paying extra to avoid having to give up their pets, with 28% of private rental sector tenants willing to pay an average of £24 more for their monthly rent payment. So is the extra money worth the extra worry for landlords?

Pet problems

According to Letting Agent Today, of 1,261 landlords surveyed, 69% said that they do not allow pets in their properties. Dogs can be noisy and bark throughout the day or night, causing friction with neighbours, many people are allergic to animal fur which may cause major problems for future tenants and there’s always the threat of flea infestations, continuous fouling and terrible odours. It’s enough to put most landlords off.

Arguably the number one issue that concerns landlords is the potential damage to their property. According to the Telegraph, more than £600 worth of damage is caused to homes by pets during their lifetime – a particularly unattractive statistic for a landlord. However, damage to a property by pets is significantly lower than expected in a pet-friendly rental household. The risks that landlords worry about reflect a minority of tenants and pets, as according to Cats Protection, 75% of cat-friendly private landlords report no problems regarding feline friends in rentals.

Change on the horizon

In February 2018, Labour Party’s Animal Welfare Act announced that they aim to strengthen the rights of tenants to have pets in their homes, as they recognise the growing number of people renting well into their 30s. In an attempt to bridge a mutual agreement and balance between tenant and landlord rights, they added under their ‘Domestic Pets’ proposal to “consult with landlords and tenants on the ability for tenants to keep pets as default unless there is evidence that the animal is causing a nuisance.”

Additionally, to help address the lack of pet-friendly rental accommodation in the UK, the ‘Think Tank for Pets’ was launched in November 2018. Made up of a committee boasting economists, charity representatives from Crisis and RSPCA, property professionals and vets, the initiative has put in a suggestion to look into how tenants are affected by pet bans in rentals. Their recent report found that providing lenient restrictions on pet tenants aided the increase of landlord income, with more tenants available to them and tenants more likely to stay with them for longer, and reduced issue of homelessness of animals within the UK.

Despite these events, the National Landlords Association states that a blanket approach towards keeping or refusing pets will be condemned, as ‘landlords should have a right to refuse permission so long as they justify their decision’. Many would argue that as the property owner, the landlord has the right to make their own rules, however on the flipside, it may be unfair to refuse a perfectly responsible tenant with a well-behaved pet before giving them a chance.

 

A Guide to Using a Letting Agent

As a landlord, using a letting agent is completely optional and a personal preference. Many landlords prefer to take control and handle the entire tenancy process themselves, however the use of a letting agent can make life much easier for many. Finding the right letting agent can be a minefield for those unsure of what they are doing, so it’s very important to know what to look for…

What do letting agents do?

Often, the main driver in taking on a letting agent is a matter of convenience. The great thing about letting agents is that they manage many of the tricky and lengthy aspects of tenancies that a lot of landlords dislike. The services that letting agents provide vary in levels and subsequently fees, depending on how much or how little the landlord would like taking care of.

Tenant-find only: As a basic service, they find tenants for your property and arrange the let, usually including collecting references, doing credit checks and collecting the deposit. You can often pay extra for an inventory and check-in on moving-in-day. The one-off fee for a tenant-find only service would usually be equal to around a month’s rent, or as a percentage of the entire tenancy contact.

Tenant find & rent collection: The next service tier up includes the above, as well as being responsible for collecting the rent payments each month and chasing any late payments. The monthly fee for this will usually be around 8-12% of the monthly rent collected.

Full management: With the top tier service, they can take on full management of your tenancy; managing all aspects of the rental including rent collection, dealing with your tenants queries and problems and arranging any maintenance and repair work. The monthly fee for this will usually be around 10-15% of the monthly rent collected.

Who might need a letting agent?

The perfect candidate is a busy landlord who has many properties to manage and who is struggling to find the spare time to keep tabs on everything – particularly if they don’t live locally to their rentals. On the other end of the spectrum, first-time or inexperienced landlords may opt for a letting agent as a bit of a safety blanket. If they are unaware of unsure of all the relevant regulations and legislation, using a letting agent can prevent getting anything wrong or missing important things that could prove problematic in the long-run.

If you want to be a hands-on landlord and be in full control of the tenancy process and be your tenants first point of call, you may be better off without a letting agent and conducting everything yourself. It would also keep your costs down, as letting agents don’t usually come cheap.

What are the pro’s and con’s of a letting agent?

Being a landlord isn’t easy. You’d hope that you can do everything that is expected of you and are able to keep your tenants happy, but unless you’re perfect, that’s not always the case. If dealing with unhappy tenants and solving their problems is your idea of a nightmare, using a letting agent’s full service will mean you don’t have to directly handle your tenants and their woes – the agent will. If you have student tenancies for example, or a flat in a block of other flats, you can go with letting agents that specialise in this remit. For many, this is a huge weight off their shoulders as there’s a few things that come with the territory that a landlord may not be sure how to handle – such as possibly higher levels of damage and deposit issues with students, or neighbourly disputes in blocks of flats.

There are of course a few cons to a letting agent. Firstly, they can be expensive. This is a big turn-off for many landlords that feel that they can handle the process themselves – which, with plenty of research and walking yourself through the process slowly, can easily be done. Something else very important to remember, is that letting agents are unregulated and there are no statutory standards for the service or fee’s. Do your research and ensure that you’re only going with trusted agents that are going to look after your money, your tenants and your tenants money.

Your letting agent checklist

  • Are they a member of a professional standards body, such as The Association of Residential Letting Agents (ARLA), The Royal Institution of Chartered Surveyors (RICS) or The National Association of Estate Agents (NAEA)? If not, it’s probably best to avoid them.
  • Are you able to get recommendations and first-hand accounts about possible letting agents from other landlords that you know? If so, it’s obviously worth trusting those with real experience over anything else.
  • Check all the details about the tenancy deposit protection scheme that the letting agent will use, if you’re asking them to deal with deposits. If the agent for any reason runs off with the tenancy deposit, you will still be responsible for repaying this, and if they run off with the rent payments, you can’t ask the tenant to pay you again. You need to be able to trust them!
  • Read the contract thoroughly and question anything that you are unsure of. Look out for clauses such as being asked to give 6 months or more notice if you wish to cancel the agreement. 3 months is reasonable and recommended. Be aware of clauses which provide the agent to be paid commission on renews of the tenancy with tenants found by them and also look out for charges for when the property is vacant. This is normal and the agent is entitled to a fee in this instance, but it should be less than that charged when a tenant is in place.
  • Will your letting agent be arranging checks such as the annual gas safety checks and keeping all of the necessary records? Will they be checking that the property meets all other standards, such as the furniture and fittings complying with the regulations? Double check so that these things do not get missed.

Letting agents can be a huge help to the right landlord and completely worth the money. Do your research, be well informed and check your contracts for a happy and harmonious relationship with your letting agent!

The Basics of Landlord Tax

Navigating the world of tax can be tricky when you are a landlord as there’s a lot to think about and consider. There’s no doubt about it – it can get pretty complicated and that Self Assessment tax return form can seem rather daunting. However, fear not; legislation around tax is always changing, but we are on hand to break a few things down and make the current situation a little simpler.

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How to Evict a Tenant

Evicting tenants can be a stressful and often complicated process but unfortunately, sometimes necessary. Judges will expect landlords to meticulously follow the proper procedure, have the perfect paperwork and don’t often stand for any mistakes you might make. One thing you don’t want to do is lose your claim, as you could be hit with your tenants expensive legal costs! Potentially depriving someone of their home is nothing to be taken lightly, so it’s really important to stay on the right side of the law.

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Which Iconic TV Tenant are you?

How tidy are you on a scale of Eddie the dog to Sheldon Cooper? Perhaps you’re a Monica and your friends never leave your apartment, or you’ve got more cash than Mr Big or Walden Schmidt… Whatever your tenant tendencies, there’s a famous TV tenant who’s just like you. Curious? We have an awesome new quiz to reveal your TV twin!

Whether you’re a TV sitcom box-set binger or not, it’s common knowledge that Joey Tribbiani doesn’t share food and that Barney Stinson is legen… wait for it… dary! Our Iconic TV Tenant quiz hones in on your spending habits, your cleaning skills (or lack of), and your go-to music choices to match you to one of 70 quintessential great TV tenants of our time from 10 timeless shows, including JD from Scrubs, Jess from New Girl, Carrie Bradshaw from Sex & the City and Frasier from, well, Frasier – to name but a few.

If you are a landlord, the chances are that you may have come across a few of these characters within your time. You may cross your fingers for an intelligent and responsible tenant such as Mark from Peep Show and sigh in despair when you end up with the ultimate slob whose rent is always late, just like Penny from The Big Bang Theory. But could it be that you are more like your nightmare tenant than you might realise?!

There’s only one way to find out… Take the quiz!