SUCESSFUL RENTING AN ABC GUIDE

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SUCESSFUL RENTING AN ABC GUIDE

• Nikki Pope, Solicitor Landlord

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Is Investment Property still a good buy?

• Residential Property -leverage to purchase with
  85 other peoples money, capital growth good
  since 1066 doubled approximately every 10 years.
  Dont expect gains in short-medium term.
  www.nationwide.co.uk/hpi/historical htm
• To avoid exposure to downturns buy to keep.
• Buyers market, negotiate best price
• Consider factors supporting demand eg good
  schools, quality location
• Avoid overhyped off plan newbuilds Inside Track
• Must be cashflow positive

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MY STORY

• PERPETUAL STUDENT/TRAVELLER/SKINT
• ON TURNING 30 ANNOUNCED WANTED 10 PROPERTIES BY
  40
• STARTED BY LIVING IN OWN HMO REMORTGAGE 2
  EXPAND PORTFOLIO
• ACHIEVED GOAL IN 3 YEARS THEN SLOWED DOWN NO
  GOAL
• CHALLENGE EXPAND IN DOWNTURN KEEPING POSITIVE
  CASHFLOW

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WHAT IS YOUR GOAL?

• WHERE ARE YOU NOW?
• WHERE WILL YOU BE IN 1 YEAR?
• WHERE WILL YOU BE IN 3 YEARS, 5 YEARS, 10 YEARS?
• MOST PEOPLE CAN DO LESS IN A DAY THAN THEY THINK
  AND MORE IN A YEAR

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POSITIVE CASHFLOW TO SURVIVE THE CREDIT CRUNCH

• Refinance/big finance issues
• Other big planning purchase/development
• Available to rent
• Rents to collect/arrears

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MAXIMISE INCOME?

• MAXIMISE RENT SEPTEMBER LETS?
• DEVELOP TO MAXIMISE RENTAL SPACE
• RENT APPLIANCES tv? Microwave? Dvd? Washing
  machine?
• ELECTRICTY CARDS - Airmiles?
• FREEHOLD NOT LEASEHOLD NO SERVICE CHARGE
• VIEW PROPERTY BEFORE TENANCY ENDSREDUCE VOIDS

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MAXIMISING PROFITS REDUCING LOSSES

• FREQUENTLY REVIEW BEST MORTGAGE DEALS
• REDUCE ADVERTISING COSTS TENANTS INCENTIVE
• SOURCE TRADE DISCOUNTS TRADE ACCOUNTS, OR TRADE
  SUPPLIERS EG STAX
• GOOD TEAM OF TRADESKILLS CONSIDER REDUCED RENT
  TO SKILLED PLUMBER! etc

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MAXIMISE ALLOWABLE EXPENDITURE

• CLAIM 10 OF RENTAL FOR FIXTURES FITTINGS
• FORM YOUR OWN LETTINGS COMPANY TO HANDLE FINDING
  TENANANTS/LETTINGS THEY CHARGE YOU 10-15 -TAX
  DEDUCTABLE
• MANAGEMENT CO MAY ALSO CHARGE YOU FOR OTHER
  SERVICES EG REPAIRS, MAINTENANCE, GARDENING ALL
  TAX DEDUCTABLE

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GETTING THE BEST TENANTS

• WHO? STUDENTS? PROFESSIONALS? FAMILY?
• WHAT DO THEY WANT?.
• BAD PROPERTYPROBLEM TENANTS?
• DEVELOP TO ATTRACT THE TENANTS YOU WANT
  SUSTAINABLE, EASIER TO MANAGE, GOOD LONG TERM
  CAPITAL INVESTMENT

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FINDING GOOD TENANTS

• GUMTREE/ SPAREROOM.CO.UK
• CLASSIFIEDS ADs MEN/LOOT.
• SIGNAGE ON PROPERTY.
• LOCAL ADS, NEW.
• Referrals tenants incentives?
• Letting Agent.

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CONVERTING VIEWERS TO CUSTOMERS

• TARGET SELLING TO TENANT.
• LOCAL KNOWLEDGE, TRANSPORT, AMENITIES ETC.
• OPEN HOUSE BLOCK LIST WITH SLIGHT
  OVERLAPVISIBLE DEMAND.
• CREATE INTEREST _ YOU CHOOSE BEST ONE.
• TIP AVOID TENANTS IN HURRY WANTING TO PAY CASH

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CHOOSING TENANTS

• TELEPHONE INTERVIEW? WHY DO THEY WANT TO RENT?
  HOW LONG FOR?
• RLA APPLICATION FORM. DoB NI No last 3
  years residence
• CREDIT CHECK ANALYSE RESULTS.
• REFERENCES

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RETAINING TENANTS

• AVOID VOIDS RELET COSTS
• GOOD COMMUNICATION
• SORT REPAIRS PROMPTLY
• TIP VISTA PRINT FRDGE MAGNET!
• AGREE REASONABLE REQUESTS BUT MANAGE EXPECTATIONS
  BUSINESS NOT FRIEND
• RESPECTS YOUR TENANTS ENSURE TRADESMEN DO SAME

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A MATTER OF LAW

• MOST USUAL FORM OF CONTRACT ASSURED SHORTHOLD
  TENANCY AGREEMENT
• RLA.ORG ONLINE TO MEMBERS
• LICENCES TO OCCUPY LESS RESTRICTIVE BUT COURTS
  LIKELY TO FIND THEM UNLAWFUL IMPOSE AST

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DEPOSITS

• DO YOU WANT ONE?
• MAY SORT CHAFF FROM WHEAT
• GIVE SOME FINANCIAL PROTECTION
• ARE THERE ADVANTAGES IN NOT CHARGING? WHO WILL
  THAT APPEAL TO?
• ARE THERE ALTERNATIVES? EG SELL FURNITURE PACK
  OR USE GUARANTOR?
• 2 MONTHS RENT IN ADVANCE

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DEPOSITS OPTIONS

• 1) YOU COLLECT DEPOSIT KEEP MONEY PAY TO
  INSURE VIA TENANCY DEPOSIT SOLUTIONS LTD 30 per
  property or THE TENANCY DEPOSIT SCHEME 40 per
  property
• 2) YOU HAND MONEY TO CUSTODIAL SCHEME ie DEPOSIT
  PROTECTION SCHEME landlord pays over deposit,
  can be 24/7 online, TDS notifies L/Lord tenant,
  at end of tenancy agree what should be paid over
  money received within 10 days, if cant agree
  Alternative Dispute Resolution, with only the
  disputed share held back

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IF DONT COMPLY

• S21 notice will not be valid ie you lose
  control of v important method of controlling
  tenancy.you could not get rid of tenant unless
  they breached agreement in some way (ie can use
  s8).
• Fine of 3 times the amount of the deposit held
• May be deemed unfit for HMO licence (Councils
  discretion).

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Other law regulations

• Gas Checks criminal liabiltiy
• Electricty regs
• PAT tests
• HHSRS

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MANAGING RENT ARREARS

• FAIR SYSTEM IN ADVANCE
• 3 DAYS LATE CALL/TXT/E-MAIL
• 5 DAYS ANOTHER CALL/TXT
• 7 DAYS - LETTER
• 14 DAYS LETTER BEFORE ACTION
• .... S8 NOTICE OR COURT FOR DEBT RECOVERY

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RECOVERING RENT ARREARS

• Is your goal to get your money? Or do you want
  possession? S8 Notice faster than s21 notice
  but judge has discretion
• Debt recovery action look _at_ www.moneyclaim.gov.u
  k
• Early action debt likely to be more manageable
  for tenant. Difference between the drifter
  the dodger.
• May get some tenants back on track, may get Court
  Order which can be enforced at any time in future
  if you can find tenant.
• The Dodgers likely to vacate faster more
  cheaply than with other forms of possession
  proceedings.
• NB RLA MEMBERS HAVE FREE DOCUMENTS ONLINE

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SUMMARY

• YOUR PROPERTY GOALS?
• CASHFLOW POSITIVE TO KEEP GOING IN TOUGH MARKET
• MINIMISE EXPENDITURE/LOSSES
• CLAIM ALL ALLOWANCES
• MAXIMISE INCOME INC ADD VALUE TO PROPERTY
• KEEP FOR LONG TERM