COMPLETE GUIDE ON LETTING A PROPERTY
A lot of work needs to be done even before the property is let out. The property needs to look at its best before the potential tenant comes in for a viewing so that there is a good chance of the property being let out at the expected price range.
Educate yourself as to various steps involved in letting out of the property as you need to have some form of understanding as to the amount of your investment, mortgage implications, costs and the rental yields, some of which information would readily be available with your estate agent.
You therefore need to be thoroughly prepared before you begin the process of letting your property. Planning carefully requires assessment of finances involved in preparing the property in immaculate condition for letting.
ASSESS YOUR POTENTIAL INCOME AND COSTS
Try to assess the amount of income that you would derive from the letting out the property, it is important that you know the costs and expenses to bring the property up to the required standards, both physically and in terms of meeting the prescribed regulatory safety standards.
Other elements involving finances would be the cost of normal repair and maintenance, furniture & fixtures to be let and any cost of repair and maintenance of the property, fixtures, utility equipment and appliances, monthly mortgage repayments, insurance fees and advertising if the letting is being done by self and fees of letting agents for managing the property.
PREPARE YOUR HOUSE
You need to prepare your house for letting in a way to ensure that the property potentially adds value and returns with minimal costs so that it can be let out quickly.
Start by cleaning your house thoroughly to make the place more appealing and allow viewers to imagine living there. Tidy up your garden, cut the grass and bushes and have the patio and furniture cleaned.
Get rid of all the excess stuff that has accumulated over the period. Make it easy for people to see all the available living space the house offers them
Give the front door a new coat of brightly colored paint. Try to apply a neutral coat of paint to the walls as it will make your home seem lighter and bigger to appeal the viewers to imagine how they would adapt the rooms to their needs.
Clean windows thoroughly and dress them appropriately with blinds or curtains. Make repairs and replace any broken light bulbs wherever necessary, as buyers want to move in without making lot of changes and incurring expenses. Try to create a good first impression of your house.
Rearrange the kitchen cabinetry in a fresh way and remove excess and bulky stuff from the kitchen, repair plumbing fixtures of bathrooms and kitchens, upgrade kitchen counter tops, if required, which can add quite a lot in value to your house.
Consider removing any bulky furniture that makes the room feel small and replacing it with smaller furniture. Also consider placing wall mirrors that would make rooms look much bigger and lighter.
Ensure that the root cause, if any, of bad smells is eradicated. Clear drains, wash bins, open windows, air the kitchen from old cooking smells, get rid of furniture that is embedded with cigarette smoke and place light colored fresh bed sheets in bedrooms. Ensure that the fireplace is clean.
Feel the difference of a cleaned (House cleaned by C4P Leeds)
Plants and flowers bring color, life and light to a room and also gives a fragrant smell, so does a fruit bowl on your kitchen counter. Ensure these are in place when people come for a viewing. Also consider burning some pinecones for the delicious smell.
This would make the house feel light and airy, make rooms feel bigger and the property more attractive. These steps may seem like a lot of work, but with time, efforts and even a bit of money spent now, it could really make the difference to how quickly you let your property and how much rent you can charge.
LETTING OUT CONSIDERATIONS
Most of the time the property is to be let to one family, however sometimes the nature of the property requires that it is to be let out to more than one tenant, for example, individual rooms will be let to different tenants for example different families, students, professionals, this would be possible through a House in Multiple Occupation (HMO).
A (HMO) will however be subject to further regulations, as well as require registering with your local authority. Normally your property agent would be aware of the regulations however if you are letting the property yourself, you need to read more about requirements for HMO’s on the department of Communities and Local Government website.
Each circumstance will affect how you should prepare and proceed with the letting of your property as also choices available to you in managing it.
LETTING OUT CHECKLIST
A checklist should help you ensuring that all he tasks that were required to be done are now complete and the property is able to be let out. Ensure that:
- Furniture and furnishings comply with the fire regulations
- Gas appliances and equipment have been serviced by a registered and qualified engineer
- Electrical wiring has been checked and approved by a qualified electrician
- If you are non-resident, inform council tax department of the property being let
- If you are non-resident, inform your utility suppliers that the property will be let
- Update your insurance considering that property is being let out
- Ensure permission from mortgage lender is in place for letting of the property
- Inform your freeholder, if the property is leasehold flat or apartment
- If you plan structural alterations, obtain council’s planning office approval
- If you plan change in property’s use, obtain council’s planning office approval
- If the letting is a HMO, inform the council’s environmental health department
CHOOSING A LETTING AGENT
Some of the landlords owing to the fact that substantial work involved in the letting out of a property, prefer selection of a good property letting agent for letting out and management of their property.
As there are several issues in managing or letting of a property for example such as selection of a potential tenant and checking his background, references and credentials to determine his suitability for the property in question, arranging viewing, responding to tenants queries and finally negotiating the terms and conditions of the tenancy, therefore this task needs to be deputed to a dedicated and qualified letting or estate agent. There are several advantages in using a letting agent, who:
- Has good knowledge of the local market, rents, demand, type of properties, target market consisting of tenants interested in the property.
- Demonstrate a thorough understanding of lettings legislation
- Confirm plans to get the property tested and inspected ready to go to market
- Can market the property to potential tenants through his own website and on major portals such as OnTheMarket, Rightmove, Zoopla etc..
- Should be member of National Association of Estate Agents (NAEA), Association of Residential Letting Agents (ARLA), SafeAgents, Property Ombudsman etc.
- Respond to queries of potential tenants arrange viewings and seek their feedback
- Negotiate the terms and conditions with the tenants such as rent, tenor, , etc.
- Has a proven track record in letting properties quickly and efficiently
- Can expeditiously close the transaction
- Provide appropriate advice and guidance
Before you decide to assign the contract for letting out your property to a letting agent, contact a few local agents and ask them for a valuation of your property as to the amount of rent the property is expected to fetch, which service is normally free and without obligation.
You can ask him to advise on the rental value, the nature of lettings services extended by the real estate agent, the manner in which he will market your property for rent, the process, documentation and an idea within which tenants are expected to take the property on let.
Once the services of a letting agent have been engaged, the agent will prepare a comprehensive property details, and prepare to launch the property on their own website and on the major property portals such as OnTheMarket, Rightmove, Zoopla etc. to capture a wide market and contact tenants to begin to arrange viewings.
REAL ESTATE MANAGING AGENTS
After the property has been let out to a suitable tenant, the landlord has the option of either managing the let property himself, or hiring the services of a real estate agent to work on behalf of the landlord.
If you are not fully aware of the legislation relating to letting and rental of properties, and you are managing the property yourself, you need to ensure complete documentation of all the correspondence between you and your tenant, furnishing him with EPC, Gas certificates, statutory information etc. as also steps to protection of his deposit. Failure to follow the required steps could result in colossal loss to the landlord in case of tenant default and handling of the legal technicalities relating to his eviction.
Owing to these reasons, as also due to the fact mostly in cases where the landlords are living abroad or far away from the place where the rental property is located, he may want to employ a real estate agent to make sure his tenants and the property are looked after while he is away. Also in certain cases landlords prefer to have their property managed by a real estate managing agent particularly for example when the landlord has several properties let out to different tenants.
Owing to these reasons most of the letting agents also offer property management services. A real estate managing agent will:
- Conduct credit checks, obtaining bank details, confirm potential tenants by verifying sourcing references from previous landlords and obtain related documentation
- Arrange, communicate with the tenant and the landlord and finalize tenancy agreements
- Prepare inventories at the premises and fulfill deficiencies
- Collect rent from the tenants and arrange repairs during the tenancy
- Inspect the property periodically its condition and state
- Provide professional advice and guidance to the landlord
- Handle whole process of tenancy from beginning to end based on instructions
C4P Estate and Letting Agents can help you and guide you in each and every step of this process.