Landlord Information

Our guide to property management

 

MISSION STATEMENT:

"To provide an efficient and professional service to our clients from the first meeting through to the successful conclusion of the tenancy.  We strive to do this in a friendly and knowledgeable manner whilst maintaining the - personal touch".

 

 

Landlord guide on how Evergreen Lettings can offer a professional service, tailored to suit your needs.

Benefits of Letting
Preparing Property for Letting
Landlord's responsibilities / Safety and Legal requirements
Taxation
Tenants
Assured Shorthold Tenancy Agreement
The End of the Tenancy
Bespoke Service

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


An Income from Property?

Many people are finding today, that renting a property can be a solution to a problem, or just simply a way of creating the lifestyle they want.  There are many circumstances that people find letting a way of benefiting from:

Investors

Many Landlords invested wisely in a few properties, and as a result have been able to build up a portfolio of flats/houses for rental.

Extract from Financial Times:

WEEKEND MONEY
      INVESTMENT                                   
                                  Buying to Let   -    How to seal a good deal
Competition among lenders has helped, says Claire Gascoigne

One important reason for the expansion in the rented sector is the 1996 Buy-to-Let initiative by the Association of Residential Letting Agents (Arla), which regulates the industry.  The move to increase funds for the sector has been hugely successful.  

Intense competition in the mortgage market has also played its part.  "Lenders were looking for ways of finding better margins," says Ray Boulger, at mortgage broker John Charcol.  "Buy-to-let mortgages have traditionally been offered at 0.5 to 1 percentage points above standard rates, so it was a good opportunity to expand lending without expanding risk."

As with the ordinary mortgage market, more lenders has been good news for buy-to-let borrowers; there are deals at rates not much higher than those available to ordinary borrowers.  The difference between ordinary mortgages and-those for rental properties is that the future income stream is used when calculating how much you can borrow.

Not that your existing income or borrowing is irrelevant; you might still be constrained in how much you can borrow' You will certainly need a deposit, as no one is offering 100 percent mortgages.  The larger the deposit, the' greater your choice of lender, says Boulger.

Some landlords are building mini-portfolios of properties.  This helps to spread the risks, although most borrowers are interested in only one property.  A. growing sector is parents buying a second house for a child at university.  

According to Arla's Malcolm Harrison, the average investor in rented property is a cautious individual in his (or her) 40s or 50s who does not like the stock exchange, and prefers to have more direct control over their investments.

Recent economic events have also made people more interested in property as an investment.  Business at Aria was up about 50 per cent in the six months to the end of January.

"Now we have moved to a low-inflation environment, it is attractive to lock into something where total returns tend to be more consistent," says Mark Chilton, at Savills Private Finance.  "There is a natural hedge between property prices and capital appreciation and, as an alternative to a pension, it is very appealing."  

 

The appeal lies in the magic of gearing, which can outweigh the tax benefits of a pension.  A higher-rate taxpayer investing £60,000 in a pension will have a gross fund of £100,000.  Use the same amount as a 25 per cent deposit on a property and you have an asset of £240,000.  Assuming both investments grow at 10 per cent, you have an extra £10,000 from the pension but £24,000 from the property.  

Of course, you have to take the costs of a property into account something many novice landlords underestimate.  The cost of the mortgage, about 6 per cent on average at the moment, might be the biggest outlay but there ' are maintenance charges and management fees.  An agent can charge between 10 and 20 per cent of the rent.

It means you need to choose your property and do your sums very carefully.  "Make sure you take off your 'residential owner' hat and put on your 'investment property' hat," Chilton advises.

If you plan to rent out an existing property, you must tell your lender., otherwise, you could breach the terms of your mortgage.  However, some lenders will add an extra percentage point to your interest rate if you become a landlord, so it could be worth re-mortgaging elsewhere.

Fixed rates of up to 10 years are particularly popular with landlords; the certainty of constant outgoings usually outweighs the possibility of a marginal rise in yield.  Never invest in property except for the long term; you cannot get your money out quickly.  

You also need to be able to ride out property price downturns so you can sell when you choose, rather than when the market dictates.

When buying a property to rent, make sure it is one that seems likely to let easily, as any gaps between tenants will lower your yield.  A local agent will advise on what type of property is best for your area.  Boulger says a two-bedroom flat is usually a good bet, and former council flats can offer respectable yields.

Remember that you will not be able to claim mortgage interest relief at source (Miras) on a second property.  And there may be tax implications: you will be liable for capital gains tax if you sell, or the property will become part of your estate on your death, which may have inheritance tax implications.  

 

We are able to offer a comprehensive service to Corporate Investors, private, Executors and first time Landlords.


                                   

                                                                                 

 

 

 

 

 

 

 

 


Preparing to Let

              Having agreed a rental figure for the property and as part of a job for property managers here is some advise to ensure a smooth running tenancy.  Our policy of offering a service of quality and care extends also to tenants applications, and we are pleased to recommend properties to rent which conform to certain minimum standards.  Quality properties attract quality tenants. 

General Condition

Electrical, gas oil, pluming, heating and hot water systems must be safe and be in good working order.  Repairs and maintenance are at the Landlords expense unless  misuse can be established.  Similarly appliances such as washing machines, dish washers, fridge freezers and cookers should also be in a usable condition, and it would be advantageous to ensure that you have a service agreement to ensure with these appliances and also the central heating system.  This will save time and money down the road should any problems occur. 

Decorations 

Interior decorations should be in good condition and preferably plain light and neutral.  Any work needing doing should be done by the landlord or Evergreen's approved contractors.  This will enable a higher rent higher calibre tenants. 

Furnishings 

We recommend the following furnishings be left for an unfurnished  property :- carpets, curtains, light fittings ,fitted kitchens and bathrooms,  It is preferable that items to be left are in the property during viewing.

For furnished lets there should be cutlery, kitchen utensils and pots and pans etc.  Also a kettle in addition to the unfurnished list.  In the bedroom, bed linen and clothes storage.  Living areas such as the living/dining room should contain a table a settee and a sideboard.

As far as general items are concerned we suggest a vacuum cleaner, iron and ironing board, dusts pan and bowls .

The landlords legal rights are the same whether the property is let furnished or unfurnished.  Personal items and possessions should be removed from the premises from the premises especially those of real sentimental value.

Gardens 

Gardens should be left neat, tidy and rubbish free, with any lawns cut.  It is advisable to leave a lawnmower and any gardening tools.  Tenants are required to maintain the garden to a reasonable standard, however few are experienced gardeners and if you value your garden you may wish to arrange visits by a gardener.

 


                                                               

 

 

 

 

 

 

 

 

 

 

 


Landlords Responsibilities

 

Safety and the Law

The following safety requirements are the responsibility of the owner (Landlord).  Where we are managing agents they are also our responsibility, and will ensure compliance with the law.

Gas

Under the Gas Safety (installation and use) Regulations Act 1994, all gas appliances in tenanted premises must be checked for safety at intervals of not more than 12 months, by a CORGI registered Gas Engineer, and a safety certificate issued.  Records must be kept of the dates of inspections, of defects identified, and of any remedial action taken.  Recent updates include a new prohibition on the installation of instantaneous water heaters unless they are room sealed or fitted with a shutdown device to avoid the risk of carbon monoxide poisoning.  Copies of all paperwork and contracts must be passed to Evergreen to be held on file.

Electrical Safety

Under the Electrical Equipment Safety regulations, electrical installations and equipment in tenanted premises must be safe.  You should therefore make a visual check to ensure that all electrical fittings, equipment, and leads appear completely safe and undamaged, and arrange for a qualified electrician to rectify any faults which are found.

Consumer Protection – Fire

The Furniture and Furnishing (fire safety) Regulations Act 1988 (amended 1989 & 1993) provide that specified items supplied in the course of letting property must meet minimum fire resistant standards.  The regulations apply to beds, headboards, and mattresses, sofa-beds, futons, and other convertibles, nursery furniture, garden furniture suitable for use in a dwelling, scatter cushions, pillows and non-original covers for furniture.  They do not apply to antique furniture or to furniture made before 1950.  Bed clothes including duvets, loose covers for mattresses, pillow cases, curtains, carpets or sleeping bags.  Items which comply must have a suitable permanent label attached. 

Smoke Alarms

The building Regulations Act 1991 states that all properties built since June 1992 require mains operated interlinked smoke alarms fitted on every floor.  Although these regulations do not apply to older homes Evergreen insists that smoke alarms are fitted in all properties.  We will arrange for this to be done if they are not already fitted.


                                                                

 

 

 

 

 

 

 

 

 

 

 


Taxation

When the Landlord is resident in the UK it is entirely his responsibility to inform the Inland Revenue of rental income received and to pay any tax due via the Self Assessment Return.  Landlords should keep Evergreen’s monthly statements and copies of any invoices.

Landlords resident overseas come under rules effective from 6 April 1996, unless an exemption certificate is held, we as :Landlords agents are obliged to retain and forward to the Inland Revenue on a quarterly basis an amount equal to the basic rate of income tax from rental received, less certain expenses.  An application form for exemption for such deductions is available from Evergreen, and further advice may be obtained from the Inland Revenue.

Tax Deductions 

UK and overseas Landlords are entitled to the following deductions from income before calculating profit:


                                                        

 

 

 

 

 

 

 

 

 

 

 


Tenants

Finding the right tenants is profoundly one of the single most important aspects of hassle free letting.  Evergreen pride ourselves on straight tenant selection.

Advertising 

Professional marketing is the starting point to finding quality, high calibre tenants.  Every property available is marketed through our internet site at www.evergreenlettings.co.uk.  We are available for e-business anytime and from anyplace!

We also use the local press and display boards outside properties.  

Appointments

All viewings are conducted by Evergreen for tenants wishing to see a property.  Prospective tenants are never allowed to view alone or with a key.  If the property is occupied all appointments are at the convenience of the current tenants. 

References / Vetting

All applicants are thoroughly vetted by references taken from current employers and previous Landlord.  We will also do a credit check to ensure financial competence.  In certain situations a guarantor will be required and the appropriate checks will be made. 

Inventory

Evergreen will prepare the all important Inventory of Contents and Schedule of Condition prior to the tenants occupying the property.  This is done in order to avoid misunderstandings or disputes at the end of the Tenancy.  Without such safeguards it will be impossible for the Landlord to prove any loss, damage or significant deterioration of the property or contents.


                                                               

 

 

 

 

 

 

 

 

 

 

 

 


Assured Shorthold Tenancy Agreement

This is the most commonly used letting Agreement which complies with the letting Act 1988 (and 1996 amendments), or where a company let is arranged, to adhere to contract law.  All agreements have been checked by our expert lawyers and will protect the Landlord's rights and interests.

 

The End of the Tenancy

Advice - Notices - Evergreen will advise you and your tenants (via section 21 notice) approximately 2 months before the end of the tenancy, and will issue the appropriate notices under the Housing Act 1988.

Fast track

Recent legislation has meant more peace of mind to Landlords, as fast track repossession ensures that you will always be able to recover your property when needed.

Extensions

If you and your tenants wish to extend the tenancy for a further term, Evergreen will prepare an Agreement stating the fixed term, charges in rent and any amendments so that the new tenancy is fully documented.  Extensions can also be done by way of a Statutory Periodic Tenancy where the tenant is required to give one months notice to leave.

Check out

At check out Evergreen will run through the Inventory and Schedule of condition with the tenants and compare them to the property's current condition.  We will also collect remaining keys, lock the property, read the meters and advise the utility companies accordingly.  The property will then be available for re-letting providing there is no maintenance that needs to be carried out.

Wear and Tear

Generally the better the condition of the property the higher the market rent that can be achieved.  These properties are also less likely to suffer from expensive vacant periods.  A space of one month is equivalent to a loss of  8.3% of one years rent.


                                                           

 

 

 

 

 

 

 

 

 

 

 


A service to suit your needs

All Landlords have varying periods of time to input into the letting of their property.  Our full letting and management service is ideally suited to those who don't have the time to ensure the smooth running of the tenancy.

Other Landlords who live near to their property and are prepared to invest more time into letting  may wish to manage the property themselves.  We also offer a service which is aimed at purely providing a suitable tenant.

We will of course review each individual Landlord's situation.

We are a small family run business, using traditional values and ethics, combined with a modern flexible approach such as embracing 'e-business'.  We can tailor our service to suit your exact requirements, and provide advice on every aspect of letting.

We pride ourselves on focusing on our Mission Statement to ensure that we live up to and exceed our clients expectations.

As part of the complete management service we will provide: Rental valuation, marketing of property, tenant selection and referencing, draw up Tenancy agreements, collect rent and forward via BACS, regular property inspection visits, property maintenance service, check in / check out, and informing utilities.

                         We can provide Landlords with complete peace of mind.