In Bristol on July 1, in time-honoured fashion, it’s the great student changeover day. Thousands of students career around the city, changing accommodation. As a Bristol letting agent and for letting agents all over the city, it’s a busy and often fun time for all – not just the students but agents alike – as we meet new faces and personalities, and have to say goodbye to the great and some not so great student tenants.
Landlords at times shy away from hiring letting agents to manage rental properties, assuming they can look after it themselves and save money.
However, despite what some landlords feel, property management is more than just an insurance policy, the occasional phone call to or from a tenant, and a quick lick of paint every so often. Many landlords often realise at a later stage just how much is involved.
When a tenant gives you notice that they’re leaving you certainly have the right and obligation to start marketing your property rent.
Please just do your tenant a favour and work with them to block out some time on specific days to bring people to view.
Showing up day after day at random times is not only inconvenient and annoying for your tenant but it’s inconvenient for you.
If your tenant is leaving on a bad note, you don’t want to make a bad situation worse.
If they’re leaving on a good note, you want your soon to be former tenant to send you more good tenants when they have friends looking for a place to rent.
As I try and stress over and over again…it’s all about Customer Service, Relationship Management, whatever you want to call it…
At the close of 2010, the Royal Institution of Chartered Surveyors (RICS) predicted that house prices in Britain could fall more than 2% in the next year. Although, while this is bad news for homeowners, the fall in house prices could spur an increase in the level of interest in investing in property. Could, therefore, 2011 be the year of boom for Buy to Let?
At the end of the day, it pays to look at the long term in regards to investment in property. While housing prices are low now, they can only grow in the long term, which means that your property will gain positive equity.
Of course, renting property isn’t for everyone. Not only is it a long term commitment of hard work and dedication but it is also expensive. For most Buy to Let properties you will be required to pay at least 25% in way of an initial deposit. Similarly, there are various other costs to consider such as legal fees, letting agent fees and landlord insurance, just to name a few.
However, if you have the money to make that initial investment (and let’s face it, the rates of return on other types of savings and investments are hardly attractive at the moment), then Buy to Let could be the ideal solution. As lenders stick to tighter underwriting criteria than ever before – particularly for first time buyers – more and more people are driven to renting.
If you are interested in dabbling in the Letting Market but are unsure whether or not it will be a long term benefit for your personal circumstance, then you are advised to weigh up the following specifics. First, determine your projected rental income, this, above all, will highlight if the investment will be worthwhile in the whole. Also, calculate how much you’d intend to charge in rent and compare this with current rental costs on the market. Finally, you must predict what your ongoing spending will consist of, for example maintenance, insurance etc.
In order to work out these exact figures, it is advisable to seek help from an independent financial adviser. However, if you would like to try it out yourself, the basic calculation is as follows: Total projected rental income minus Total annual costs divided by Total initial costs. So these include all of the factors mentioned above such as the initial deposit, the mortgage repayments, letting agent fees and general maintenance and repair fees including initial decoration and furnishing required at the beginning of a tenancy.
These calculations are important as they allow you to determine whether or not investing in property will be worthwhile. Additionally, organising your figures and paperwork will prove to your mortgage lender that you are serious about the decision to rent property, so they will be much more likely to lend to you. Also, as the calculations are all based on estimates, you are given a certain degree of flexibility with your figures, over compensating or under compensating to ensure that you will be able to cope in a fluctuating market.
The specialised nature of Buy to Let finance means that the best value for money will not be found on the high street. Looking for a mortgage broker is the advisable route to take in this instance, as they really do know their stuff regarding the Buy to Let market.
It is even more important that you approach a broker if this is the first time you have looked into renting property. Independent brokers who work on a ‘whole of market’ basis will be able to help you find the best rates and deals on the market. They will additionally be able to understand your personal circumstance and exactly what form of mortgage or financial assistance would suit you best.
So, is 2011 the right time to Buy to Let? With the housing market as it is at the moment, now has never been a better time to enter the letting market. The environment is favourable for landlords and demand for rented property is increasing almost daily. So, if you are looking for a new adventure as we enter the New Year, then consider buy to let as the biggest and best investment of your lifetime.
If your considering investing in property in Bristol, why not give me a call, I have been a specialist in the private rented sector in Bristol for over a decade.www.igloolets.com or you can contact me 24/7 on 0845 652 1428
Follow me on twitter @kevinigloo – for topical tips, tricks and ideas for Landlords.
Interesting news for the South West Landlords today rents bucked the national trend with rents increasing across the region in December 2010, according to research from LSL Property Services. Average rents were £637 for the month – 1.7 per cent up on November. Rents were 2.3 per cent higher than at the same time during the previous year.
Nationally, rents averaged £684 – a 1.2 per cent drop on the previous month but 3.8 per cent up on a year ago. It was the first time that the cost of being a tenant fell in nearly a year.
The highest average rents remain in London at £969, with the North East being the cheapest place to live at £519.
The biggest month-by-month drop in rents happened in Wales with an average of £537 – reflecting a decrease of 2.6 per cent.
David Newnes, estate agency managing director of LSL property services, said: “December is traditionally a slower month for the rental market.
“Many prospective tenants are either away from home, or prioritise Christmas spending over budgeting to move. This year, the added Arctic weather temporarily dampened demand, deterring many renters from hitting the streets and viewing properties.
“Nevertheless, with the supply of mortgage finance to both first-time buyers and would-be landlords still constrained, we are likely to see rents restart their upwards march before the spring.”
Unfortunately many people lose money because they tend to fall victim to common landlord mistakes. In order to protect your assets, you want to make sure that you do your research and obtain all of the helpful advice and tips that you can get. Those who jump in head first without doing a little research are generally the ones shaking their heads in despair after a tenant leaves them with a trashed home and no rental income. Do not make that mistake.
Even though you may be anxious to get a tenant in the home, do not sacrifice the security deposit. If the person cannot afford the security deposit, they cannot afford to rent from you, plain and simple. The best thing to do is to collect a security deposit that is equal to at least month’s a rent.
That security deposit will help cover the behind rent that you are missing out on and for any repairs you have to make once the tenant leaves.
The more time you invest into getting your property ready and selecting just the right tenant, the better chance you will have at being a success with your rental property. There are plenty of people in Bristol that need a place to rent. Your goal is to make sure that you are selecting only the best so that you maximize your investment and protect your assets.
If you looking for further FREE information or advice on renting out your property in Bristol, I have over 15 years experience in Letting and Property Management in Bristol, letting all various properties from studios to Penthouses. Call me today on 0845 652 1428 or contact me via our site www.igloolets.com
So there is a shortage of property so were told , by just about every other agent out there. Sure your property will rush out of the door, if you instruct us today.. With over 15 years of experience as a Bristol Letting Agent. I know that’s often not the case even with a shortage. There is still potential for a void period, or remedial to be done, with the changeover of tenants, which will no doubt often outweigh any increased rental gain
So is now the right time to increase the rent?
Recent figures released by the Paragon Group indicate that higher levels of tenant demand were reported throughout the third quarter of 2010, with four out of ten investors in real estate across the UK seeing strengthening interest in rental properties. It’s likely that some landlords will increase the level of rent in response.
However, increases should be modest, as many landlords should want to avoid the hassle and expense of tenants leaving a property, after being priced out by rising costs.
The object of the exercise is to retain the existing tenants by keeping them happy and secure.
If the tenant, was going to leave anyways, you can naturally increase the rent to market levels, but in my experience you are best to offer your property at just below market levels. Thus making yours more appealing.
The recommendation comes in light of tough economic conditions largely caused by the recently unveiled Comprehensive Spending Review (CSR).
Bear in mind that at this time the cuts have not taken place, it is all talk. But when applied, things will no doubt be a whole lot different for many people. There will be belt tighten, and some will lose their jobs, along with the changes to numerous benefit changes, now is the time to KEEP the existing tenants in situ if at all possible.
Better the devil you know that the one you don’t.
I wanted to share this recent blog posting by my co professional Sally Asling – with over 20 years experience she knows here stuff. Whilst one of a lots of Bristol Lettings Agents, my experience is similar to Sally’s if you have any questions regarding anything you read in one of my blogs please feel free to contact me, at igloolets.com
The Lettings market is now, most certainly, in the favour of the Landlord.
The change from previous years over supply has now turned. Many Landlords have taken an exit from the Buy-To-Let market to free up equity. Reluctant Landlords took advantage of the brief rise in sales prices earlier in the year to finally sell, and overseas Landlords who rented whilst moving with their career have been posted back home.
The facts in the rental market her are now are:
The reduction in supply to the rental market is ever increasing
Demand from tenants is rising
Void periods are falling
rental levels are slowly increasing, though this is still more significant in the smaller units and family homes market
Yields are increasing
sally says the following and offers this sound advice
I think without a doubt, we are heading for the largest shortage of property in the rental market that I have ever experienced spanning a 20 year career. Its a worrying situation, and whilst rents have gone up and agents are pushing for the best rentals for their clients, its important to keep it in perspective and look at the whole situation.
Some Landlords are cashing in on the news, making it a nightmare for potential tenants. I have read about Landlords serving notice to get an extra £100 a month in response to these news headlines. For an extra £50 – £100 is it worth serving notice to get new tenants if your current tenants can’t afford the hike? Is it not “better the devil you know? Is it worth the risk of a 1 week “turnaround” void that eats into the increase, and when you add in the costs involved in getting a new tenant in, inventory fees etc, is it all really worth it?
My advice to landlords is to keep it fair, keep it reasonable and look at the quality of the tenant, the longevity of the let and the stability that you have with your existing tenant before imposing rental hikes at renewal stage. If you are getting in new tenants, do quality reference checks to ensure the rental is affordable so you dont run into problems if a tenant has a change of fortune and do take out rental and legal cost insurance.
There is still a lot of job insecurity out there, inflation is affecting the daily lives of everyone, so whilst there may be a shortage of property that you can cash in on, it is worth balancing that out with ensuring the rental is sustainable with the tenants that are placed and they are not overstretching themselves.
That said, for some Landlords who took significant rental drops in the previous years, now may be the time to look at getting a higher rental if the property comes naturally up for reletting.
