Get familiar with the laws and responsibilities before letting your property

First time buyers who intend renting their homes should get well acquainted with the laws and responsibilities to avoid pitfalls in letting at a later date.

Renting out your home due to relocation or buying another property for rental income, makes you a landlord with more responsibilities.

The first thing you must not forget is to notify your mortgage lender about your decision for renting. Failure to notify would amount to breach of contract. The lenders charge higher upfront fees and interest rates for buy-to-let mortgages.

It is very important to inform your insurance provider. Your policy would be invalidated if you do not keep them posted.

If you seek services of letting agent to ease yourself with work of getting references, drafting tenancy agreements etc, ensure that agent is member of the National Association of Estate Agents or Association of Residential Letting Agents and the Royal Institution of Chartered Surveyors which are governed by strict code of conduct and lend more security to letting process.

Even if your property remained vacant for some period, you are responsible for upkeep of property such as DIY maintenance, painting and plumbing.

You are also responsible to put tenant’s deposit into any Government-authorised Tenancy Deposit Protection Scheme. The deposit is held in to the scheme till end of the tenancy contract. If the landlord fails to notify within 14 days, the tenant can obtain a court order directly and make landlord repay the deposit.

Get best returns on your property by letting it to holiday makers

If you have made an investment in a property to let, renting it to holiday makers would be one of the good options for getting the best returns from investment as compared to opting for a long-term tenant.

There are of course merits and demerits in going with this option. Property for holiday letting requires high standard of regular upkeep and maintenance. The biggest advantage is the income you can churn out from lettings for shorter holidays.

The holiday makers would always be looking if your place suited them for the kind of holiday and good time they had wanted to enjoy.

Ensure you furnish your property well so that it meets all the necessities of the holiday makers you want to attract. If you were intending to let your property to families, ensure providing washing machine, fridge, TV etc. Add facilities like hot tub or an open fire place. These may involve bigger investment but would keep your property occupied through out the year and may fetch you higher prices.

Do not hesitate to spend on advertising your property. Be quick in answering to customer enquiries, one who responds quickly gets the customer fast. You must assign somebody to greet your tenant and lend personal touch to their stay for holiday.

Finally request them to give a written feedback about their experience with your letting, which would help you in making improvements and utilising good feed back for future marketing.

How to secure successful re-mortgaging in the credit crunch

Welcoming the downward trend in mortgage interest rates, buy-to-let investors and property owners need to get organised to clinch best deals from lenders and banks during current credit crunch.

Delay could mean that borrower was in position to revert to lender’s variable rate at the time of re-mortgaging. The Property Owners Directory has cautioned that re-mortgage products were very few and delay on borrowers’ part could lead to loss of opportunity in the tough market.

There are around 1.4 million mortgage deals that would end in 2008 and all would be looking for re-mortgage, as reported by the Financial Services authority.

The Bank of England recently reported that number of loans for re-mortgage in July had fallen to 69,000 down from 80,000 in June.

Property owners should hasten up the process for re-mortgage as soon as they come across a good deal while ensuring to complete legal formalities efficiently. If the documentation is readied earlier, the lawyers would be in position to complete legal process quickly and secure the deal with the lender.

A lawyer would need documents like Planning Permission, Buildings Regulations Completion Certificate for already carried out alterations and a copy of tenancy agreement in case of rented property.

Published tips for re-mortgaging are available with Property Owners Directory.

Do’s and don’ts of letting your property

London is witnessing a phenomenal rise in letting of properties due to a slump in the housing sales. More landlords are preferring lettings than selling due to fear of further decline in the housing prices.

It has become all the more important for landlords to know the do’s and don’ts in lettings to avoid problems at a later stage.

1. Make us of services offered by letting agents, who are fully bonded, members of the Association of Residential Lettings Agents. They cover both your rent and tenant’s deposit.

2. Seek references from the tenant to know more who you are letting to. It is vital to know who you are letting to. The tenancy agreement must be properly drawn up and joined to one of the tenancy deposit protection schemes.

3. Draft tenancy agreement properly and register it under one of the tenancy deposit protection schemes. Enclose a list of inventory and photographs key furnishings and rooms.

4. Get an energy performance certificate which is mandatory from October 1 for every landlord. The certificate indicates gas and electricity consumption of the property.

5. You must inform your insurer about letting. Failure to do this would result in negation of contract.

6. It is equally important to inform your mortgage lender. The lender may negotiate with you and charge additional interest.

7 Price your property properly with the help of a good estate agent. Verify credentials of your tenant before agreeing to let your property.

8. Ensure to fix breakdowns of equipment such as washing machines, dish washers, gas connections etc. quickly. This would keep your tenant happy.

9. Get acquainted with laws and guidelines regarding tenancies, deposits and safety requirement of landlords.

Renting to own – a way to realise the dream of home ownership

Many people who had been dreaming of owning a home could not convert it in to reality. Demands of high deposits from lenders, high entry level prices in spite of credit crunch discouraged attempts for buying home.

A professional couple or an individual may be finding it difficult to get on to the property ladder since lenders are unable to provide mortgage on affordable terms. The question arises as to how someone with poor credit history or short residency period can realise the dream of owning a home?

There is a way out; in the renting to own approach, which is now taking hold in the UK.

Renting to own, fundamentally involves a seller, and a tenant willing to buy. By signing an option agreement, a tenant or a buyer can purchase a property after a specified period by exercising the option in the agreement. The tenant or the buyer has to pay up to 5% instead of 15% to 20% deposit for a contract for six months or up to 20 years and more.

The purchase price is mentioned in the beginning of agreement even if the option to buy is not exercised for 5 years. The rent is charged at the market rate along with an additional amount towards deposit, meaning that first time buyer could buy a property with minimal deposit and simultaneously accrue equity over the rent.

The only limitation in this rent to buy approach is the extent of flexibility which the seller and tenant are prepared to exercise. With theses set of advantages, renting to own is poised to flourish in the next few years in the UK housing market.

Government’s tenancy deposit protection scheme for the students

Students opting for rental accommodation have the benefit of a Government-approved tenancy deposit protection scheme.

Under the scheme, a student is given right to seek details about where and with whom his/her cash is being protected. This mandatory scheme is now a part of the legal responsibilities of a landlord.

Though the onus lies on landlords for compliance with the legislation introduced last year, students are expected to inquire about the protection of their deposit and question their landlords if they fail to provide confirmation within 14 days.

The landlords can satisfy the tenants and letting agents by registering with the Tenancy Deposit Solutions Ltd. which operates under the trading name mydeposits.co.uk. It offers a free service in resolving disputes regarding deposit amount at the end of a tenancy agreement.

The mydeposits.co.uk scheme, which was put into action over 16 months ago, has so far protected 200,000 deposits. It is a unique scheme designed to enable landlords to hold on to the deposits during the tenancy. It charges a nominal fee in a pay-as-you-go format.

Students can visit the mydeposits.co.uk website to confirm protection of their deposits.

Tenancy Deposit Solutions Ltd. has entered into contract with Councils and Local Government to deliver insurance-backed tenancy deposit protection scheme.

Tips for landlords to overcome credit crunch

It will be nearly a year since landlords in the UK began feeling the pressure from the adverse impact of economy downturn.

Many professional landlords were helped by the increasing demand for rental properties, which subsequently led to a rise in the rental income.

However, some landlords are still concerned about the future of their financial condition, due to daily reports of crash in the housing prices.

Letting your property is one of the best solutions to overcome present credit crunch. You must undertake a search of the rental market in the respective area. This search would guide you in fixing the right rent for the property so that you do not charge prospective tenant out of the prevailing level in the market. It is better to charge slightly less so that you do not wait long in searching for a good tenant.

You must prevent rental voids. Always search in advance for the next tenant before expiry of the current letting agreement. This would help in keeping your property tenanted throughout, without a break in the flow of income. You can also persuade existing tenant to continue as long as possible.

Careful screening of the prospective tenant can eliminate many problems. A tenant with good credit record would ensure that you receive payments regularly. He would also be taking proper care of property which would minimise your maintenance expenses.

Develop a habit for saving some amount of money every month which could be utilised for replacement of utilities or repair of infrastructure.

Things you must know before letting rooms to five or more students

Families earn lot of rental income by letting their homes to students. But many of them do not know rules pertaining to letting rooms in a house of three or more stories to five or more students. It is necessary to get license from the local authority for a House in Multiple Occupation (HMO).

You are supposed to pay HMO license fees, up to £1,100 in some cases, to the local authorities. You are also legally bound to adhere to standards on safety, health, and room size (6.5 sq. m for single person and 10 sq. m for couples).

When you are letting your home for more students in their late teens or early 20s, you must equip it thoughtfully. The equipment must be durable and should require low maintenance.

The kitchen worktops should be easy-to-replace. Install vinyl floors and cupboard doors. Do not conceal shower units in the walls to avoid breaking of tiles for repair of showers.

Provide locks for windows since student rooms are more prone for thefts. If you intend to provide a garden space, make it a plain lawn which would not require daily care except for the occasional mowing.

You should ensure that you provide broadband internet connection which is a must for students.

If you can afford it, take out specific insurance against fire, flood and theft.

Some tips on tenancy deposit and sharing of rental property

Moving into a rented property some times turns out to be a nightmare if certain precautions are not taken at the time of signing a tenancy contract.

Content inventory and condition of property

The foremost thing you must ask from the landlord is the inventory of contents and a report on the condition of the flat. It is your responsibility to check everything before signing the relevant document. Confirm and report any missing items or damage. Report those items which are present but missed out by the landlord in the inventory list. This will eliminate issues which normally crop up when the landlord is supposed to return your deposit amount. Landlords accept deposit at the beginning of the tenancy contract to cover any damages to contents or the property during tenancy. Charges for unreported damages will have to be borne by you if you fail to list them at the start of tenancy.

Property Sharing

If you decide to share rented property with more people, ensure that all of them sign the tenancy contract. Otherwise, you will be responsible to pay the full rent even if somebody sharing the property decides to leave. It is advisable to allow sharing only with those whom you can trust.

The landlord is not supposed to disturb your privacy and interfere in matters not related with tenancy. During tenancy period, he cannot enter the property without your permission. He is solely responsible for the maintenance of the structure and exteriors of the property. As a good tenant, you are expected to take proper care of landlord’s property contents and interiors.

Precautions you must take while renting your room to students

The soaring cost of living and the severe credit crunch is forcing many families to let a single room in their home to a student. Home owners are earning a good income by adopting this concept which was quite prevalent in olden days.

You can fetch an income of £4,250 per year without paying any tax. If rental income goes beyond £4,250, you can decide to pay tax on the rent amount above £4,250 or on the amount equal to rent income minus expenses incurred on maintenance.

You can let a single room or entire floor of your house provided it is not self content. The room which you would let out must be furnished. It is important to get the support of professionals in pre-screening of the prospective tenant for checking their bonafides. You must enquire in their college and speak to some references to verify the student’s credentials.

Those interested in letting their homes must attempt to get more details about the tenant such as how much time they will spend outside, where will they take meals or whether they would prepare it themselves. It is also important to know about the students’ hobbies, which may not be acceptable to you.

It is better to lay down rules in writing regarding visitors, late hour visits and payments. A formal contract must be signed between the owner and the lodger to avoid conflicts at a later date.