| There are many places to help you research the possibility of buying a property to let
and we strongly recommend thorough research before pursuing this investment
opportunity. Here are a few links and articles to help start that research.
Good luck!
www.adviceguide.org.uk
http://www.fsa.gov.uk/consumer/pdfs/buy_to_let.pdf
Higher buy to let mortgage interest rates and falling UK house prices make buy to let a
less attractive option than in recent years. Rents are not rising in line with
interest rates partly because there are more properties to rent than in the
past. Not only those owned by buy to let investors but also as people who cannot
sell a property rent it out instead.
See
the BBC News website for an excellent article by Jonathan Moore.
Buy to Let Rules, OK? By Michael Challiner
With the buy to let market gaining in popularity and many new investors coming into the market, here’s
some important information for you.
If you’re considering taking on the role of landlord, you’ll be pleased to hear of some long
overdue changes in the legal relationship between landlord and tenant.
There are currently 22 different types of agreements between landlord and tenant. A great many of them
are now totally irrelevant as they date back 100 years or more and many of the rest are mainly a confusion
of old laws with new clauses. They are extremely difficult to understand and seem full of contradicting
terms. However there is now a final draft of a Law Commission report and if the proposals therein become
law it will result in a total shake up of the system.
At present most private landlords, consisting generally of those who achieve a rental of less than £25,000
from a single property, make use of the “assured shorthold tenancy agreement”. This came into
force in the Housing Act of 1988 and covers rules regarding rent levels, damage liability and rules regarding
pets, etc., this is a basic agreement, easily available from stationers and is often in slightly different
forms and commonly altered by the landlord to suit varying tenancies.
If the new proposals are implemented there will be just one simple, standard agreement between the private
property owner and tenant. Furthermore there will be more protection for the landlord with regard to repossession
of the property should this become necessary for any reason. Under current legislation, tenants have the
right to hold the tenancy for at least six months, if all clauses have been met.
It is not thought that landlords will be legally required to replace the old assured shorthold tenancy
agreements with the new ones, but they will be encouraged to do so. If there is any dispute regarding
the tenancy which results in a court hearing, then there would be more likelihood of the law recognising
the rights of both parties under the unambiguous new contract.
So far we have covered the private standard agreement. The second type will be a “secure contract”
designed to suit the needs of social housing tenants.
These changes should make life much simpler for the private landlord and take away a great many of the
problems commonly associated with the old-style agreements. There is plenty of demand for rented accommodation
and property is traditionally an excellent longer-term investment. Mortgage lenders are offering competitive
especially designed buy- to- let packages and these new laws will make it even easier for you in your
new role as a landlord.
From 6 April 2007, new
Tenancy Deposit Protection regulations came into force requiring that all
deposits (up to the level of £25,000) taken by landlords and letting agents for
Assured Shorthold Tenancies in England and Wales, must be protected by a tenancy
deposit protection scheme.
A specialized buy to let mortgage broker will be able to offer you all the help you need should you decide
to investigate the market. They’ll be up-to-date on all the legislation as the changes are implemented
and will also no doubt be welcoming the simplification which the new clear-cut laws will bring.
Energy Certificates
With effect from 1st October 2008 any property that is rented out will
require an Energy Performance Certificate (EPC). For more information see
Communities and Local Government website.
Buy to Let Mortgages
The credit crunch has lead to may lenders raising interest rates
significantly and also demanding much higher deposits and guarantees for buy to
let mortgages. The days of borrowing 100% of a property's value have long gone.
This is a problem not only to new investors but existing investors seeking to
remortgage at the end of fixed rate periods.
A PDF leaflet about Buy to Let mortgages can be downloaded from the
FSA moneymadeclear website.
Article Source: http://EzineArticles.com/?expert=Michael_Challiner
Buy to Let By Chris Courtis
Round 1 – Finding a Tenant
Letting agents will have a number of marketing initiatives in place and tenants waiting for property,
therefore it is likely that the letting agents will be able to get a tenant into the property quickly.
A downfall, but this is not the case with all letting agents is that they may charge a finders fee. However
in balance if you are a landlord then you will still need to either advertise the property to get the
tenant or use the letting agents tenant finder scheme.
Letting Agents Win the Round
Round 2 – Referencing a Tenant
All tenants that are housed with a letting agency will be referenced and credit checked, this should give
the peace of mind that a tenant will pay their rent in a timely manner. If you are advertising your house
for private rent then you will either have to pay to do the credit reference check or take the risk that
you house a tenant that has not been checked, this is a big risk.
Round Drawn
Round 3 – House Viewings
In order to get a tenant into the property they will have to view the house, this can be a task that takes
sometime, it can be the case that it can take 2, 3 or 4 viewings before a house has tenants. If you are
renting this out as a landlord the time taken can be fairly considerable, especially if you no longer
live in the area where the property is being rented out. A positive as a landlord is that you can meet
the tenants, this can still be done even if you are renting the property out via a letting agents, however
often landlords do not attend the viewings.
Round Drawn
Round 4 – Paper Work
Once a tenant has viewed the property then paper work needs to be drawn up a tenancy agreement needs to
be made and a date that the tenants will move into the property needs to be arranged. If however you have
never had a tenant in a property then the landlord will need to source the tenancy agreement and make
sure that they are aware of what to include in the agreement and any legal side to the agreement.
Letting Agents Win the Round
Round 5 – Safety Checks
Often a good letting agents will take care of the legal requirements of a house, this includes a gas safety
certificate which should be done on a yearly basis, as well as this often an electrical safety check is
completed too. These will need to be arranged if not in place already for when the tenants move into the
house. This again takes time to arrange and cost, letting agents do normally charge for this (Not all
do) and this will be included in the initial charges and could work out more expensive doing this through
a letting agents, especially if they have a mark up on the work. Landlords can provide their own gas safety
certificate as long as it is done via a Corgi registered gas company.
Landlords Win the Round
Round 6 – General Maintenance
Over a period of time a house will pick up problems and require maintenance. Some of the more common issues
include boilers, heating systems, water and general building maintenance. The letting agents will have
emergency contact numbers in place for tenants should any urgent matters need attending too. If you are
a landlord of a property then it would be essential to make sure you have a 24 hour emergency plumber
and electrician that you can call upon. Problems can occur at anytime and you will be the first point
of call if you are privately renting out your property privately, be prepared.
Letting Agents Win the Round
Round 7 – Trouble Tenants
It happens, what appear to be good tenants initially, can become trouble tenants and you are not prepared
for this. You have a house with tenants who are not paying and are not communicating with you, there are
laws that need to be followed and this is where the letting agents should come into their own. They will
know the law (especially the certified agencies) and be able to deal with this problem with the correct
procedures and get the situation dealt with, within the right side of the law. If you privately rent out
a property this is where it can be very stressful and where the letting agents should come into their
own.
Letting Agents Win the Round
Round 8 – Checking the Payments
Checking the tenants have paid their rent, chasing up rent payments, gathering in shortfalls, ensuring
that all rents are up to date. This may not be a problem if you only have one property, however what if
you have 4 or 5? This can be a long task in its self and this will be out of your hands, just wait for
the statements and payments to come into your account from your chosen agent.
Letting Agents Win the Round
Round 9 – Continual Process
When one set move out another set move in, this whole process is ongoing throughout the time that you
have your property rented out. Do you have the time to do everything that is required, sorting the problems,
checking the payments, fixing the problems. There is more to letting a property than it first appears.
Instructing a letting agent to do the work will reduce your rental income as they will charge a fully
managed commission, however this will reduce the uncertainty and the pressure on you as the landlord.
Contest stopped, Letting Agents win after round 9.
Chris Courtis is the co-founder of the Rentright Rental Property Portal and is dedicated to residential
lettings throughout the UK.
Article Source: http://EzineArticles.com/?expert=Chris_Courtis
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