Renting your property
By Ian Cox
In today's difficult market many home owners who are unable to sell will be looking to rent out their homes until the market becomes more buoyant.
Here is some guidance which might assist.
1. Get an agent who is a member of The Association of Residential Letting Agents "ARLA". Such an agent will be fully bonded. This will cover both your rent and your tenant's deposit.
2. Take references. It is vital to know to whom you are letting your property. The Tenancy Agreement must be properly drawn up and joined to one of the Tenancy Deposit Protection Schemes.
3. Have a complete inventory prepared and photograph key furnishings and all the rooms.
4. You must have a GasSafe Gas Certificate. As from the 1st October you also need an Energy Performance Certificate.
5. Be properly insured. Tell your insurers that you are letting otherwise you will negate the whole contract.
6. Tell your mortgage lender that you are letting or you will be in breach of contract. This could also affect your insurance terms. The lender may want to charge you an additional ½ a per cent in interest. During difficult periods lenders are more likely to me amenable.
7. A good agent will correctly price the property. You may not let it quickly or for the highest price but it is just as essential to rent it to the right person.
8. Most agents will charge you about 10% of the amount received but if they are performing properly and are fully compliant with ARLA they will incur costs.
9. Good management is critical. If the washing machine breaks down it has to be fixed quickly. As a rule a happy tenant is a good tenant.
10. Owners should be aware of laws and guidelines for landlords, regarding deposits, tenancies and responsibilities on safety.
11. Owners need to do their sums carefully before renting out. It usually means leaving equity tied up in the property in order to get a yield of 6 to 6 ½ %.
12. Don't expect capital growth. A property investor poll showed that 70% of investors were planning to buy this year but would look for rental yield rather than capital growth.
13. Remember that if you let your property it may be occupied by a tenant when the market picks up again.
14. Renters are in a good position to make offers as owners are willing to take less than they are asking in current market conditions.
For further information see:-
http://www.landlords.org.uk/ - Regarding deposit, tenancies and responsibilities