Archive for the ‘Reference’ Category

It’s time to get checking the boilers in your rental properties, as full details of the new government boiler scrappage scheme have been announced.

The Chancellor first put forward the idea of a boiler scrappage scheme in his pre-budget report in December 2009 and the full details have been quickly put together. The idea is that landlords and homeowners in England trade in their old, inefficient boilers and receive a discount of £400 towards the cost of a new boiler.

To qualify for the scrappage discount, the boiler must be a G-rated or worse. Also, if you’re under 60, then the boiler you’re scrapping must be in working order and the main boiler used to heat the house.

The scheme currently only applies to properties in England and landlords who rent homes and home owners are eligible; social landlords, housing associations and boiler installers aren’t.

However, British Gas and npower have recently launched their own versions of the boiler scrappage scheme, in competition with the government, and these both cover properties in Scotland and Wales.

If you’re not sure if your boiler is G-rated, then the Energy Saving Trust suggest:

• If it’s a gas boiler and has a permanent pilot light, then it’s likely to be a G-rated boiler.
• If it’s gas fired and over 15 years old, it’s likely to be eligible.
• If it’s oil fired and over 20 years old, it’s likely to be eligible.

You could also check your boiler eligibility on the Government Boiler Efficiency Database or the SEDBUK Boiler Efficiency Database.

The downside of the scheme is that it will only be available to the first 125,000 people to apply – so get your skates on if you think you’re eligible.

You can find more information about applying for the scheme on the Energy Saving Trust website.

As our previous post discussed, landlords never know when problems will occur with their rental properties. The cold, wet and snowy winter weather can trigger off problems though and some of them can be avoided by making time of maintenance.

Blocked gutters

It’s easy for gutters to become blocked, with leaves, moss and other debris and, whilst they may be fine left like this for a while, if the weather turns and brings sudden heavy rain or snow showers, it can pose a problem.

If there’s nowhere for the rain water to drain, then it will end up overflowing. As well as being an initial inconvenience to have water flowing where it shouldn’t, it can cause serious long-term damage to your property too, causing fascias, soffits and windows to rot and encouraging dampness.

The problem isn’t always helped by tenants not immediately noticing the issue, for example, if the gutters are overflowing at the back of the house.

Of course, the chances of this happening can be reduced by regularly having the gutters cleared out. It’s a good idea to do it in the autumn or early winter, after leaves have fallen and before the weather turns and to give them another clearout in the spring. 

Loose tiles

In heavy rain, snow and wind, it’s not unusual for tiles to become loose on the roof or even blow off. No landlord wants to be left with tiles that have blown off their properties, but it’s sadly not always something that tenants notice.

To check no tiles are loose, or have disappeared, an annual or twice annual maintenance check could help notice tile issues before they become too much of a problem. So get your maintenance check booked in before the weather turns and such services are in even more demand.

If you do experience problems at any of your properties, then your tenants will appreciate it if you help sort out the problem quickly. One of the benefits of using a property management company is that they should have a list of reliable maintenance engineers handy and should deal with problems promptly.

Problems with rental properties can occur at any time of year, but during the cold, wet or snowy winter months, they’re particularly common. Although some maintenance problems will always occur randomly and when you least expect them, some of the issues can be pre-empted and reduced by a bit of forward thinking.

Broken boilers

Boilers have a tendency to break down when you least expect them, but it usually seems to happen when the weather is cold and your tenants need heat.  If the heating hasn’t been on for a while, when it’s turned back on, problems can surface, or the boiler can breakdown if its old, being overused and is coming to the end of its life.

Not all boiler issues can be predicted, but if you schedule in an annual boiler service at the beginning of the winter, then some problems could be avoided. In case boiler engineers can’t come out immediately, or have to order parts, then it’s a good idea to have some emergency heaters available for your tenants, so they’re not left without any heat, especially during the coldest months of the winter.

Frozen pipes

With below zero temperatures and decidedly chilly weather, it’s not unusual for pipes to freeze. This isn’t a good scenario for property owners, as when water freezes it expands – and if pipes freeze, this can result in them bursting and causing all sorts of damage to your property.

During the winter months, frozen pipes are a risk, but there are things you can do to minimise the risk. All vulnerable pipes, especially those in the loft or any areas liable to freezing, should be adequately lagged – the thicker the better – as this can help prevent the pipes from freezing.

Problems can often occur when tenants go away, for example for Christmas or on holiday, and turn the heating off. In severe weather conditions, it can be helpful to leave the heating on to help prevent pipes from freezing. Alternatively, you could suggest they leave the loft hatch open, as this can help warmer air from other parts of the house circulate.

If you know your tenants are going to be away for a while and the weather is bad, then you could always schedule in a property visit to check that the pipes are okay in their absence and that nothing untoward has occurred.

We previously looked at whether or not you’d consider letting a property to pet owners. If you’ve weighed up the pros and cons and decided that you’d like to give it a go, then here are five top tips for helping a tenancy to a pet owner go smoothly.

1. Check what pet it is

Before you agree to the tenancy, make sure you know exactly what pet, or pets, the tenants have. All pets have different needs and, ideally, you should decide on whether you’ll agree to the pet on a case by case basis. For example, small pets like goldfish or hamsters have very different needs and effects on a property than dogs or cats.

If a tenant has a particularly large type of dog or several pets, then it’s not out of the ordinary to ask to see the pets in advance so you can judge the situation properly.

2. Obtain a pet reference

It may sound a bit strange, but it’s honestly not that odd to ask for a reference for the pets. For example, the reference could come from a previous landlord who’s rented a property to the owners and pets, or from a vet.

As well as giving you reassurance that the pets will be well behaved, it’s also good to know that the pet owner is responsible and willing to cooperate to reassure you.

3. Get a pet policy clause

If you have tenants with pets, then you should insert a pet policy clause into your standard tenancy agreement. It needs to refer to keeping pets and should cover what pets are allowed or not.

4. Charge a pet deposit payment

All tenants should pay a damage deposit and, if there are pets involved and you’re worried that they could cause damage to a property, then you could add an extra deposit charge to cover this.

5. Do regular checks

If you’re still a bit nervous about letting your pride and joy to a pet owner and, especially if it’s an animal that could potentially cause damage, then you can check on the situation by doing regular landlord checks.

Just remember to keep your tenant fully informed as to when the checks will be and don’t turn up unannounced.

Pets or no pets? That’s the question facing many landlords these days as they decide whether or not they want to let their properties to tenants who have pets.

It’s not uncommon for landlords to specify that they don’t allow tenants to have pets. Some of the key reasons for not allowing animals are concerns about the property or furnishings being damaged, or worries about pets being noisy for neighbours. There’s also the issue that, where flats are concerned, pets such as dogs or cats are often impractical.

But many people do own pets and, according to research conducted by The Dogs Trust, 54% of pet owners are unable to find suitable rented accommodation due to landlords being wary of renting to them.

In the worst case scenario for landlords, tenants may ignore your wishes and smuggle pets in anyway. Not all pets are troublesome though and, if you’re finding it slow to let a property, then is it worth considering the potential benefits of a pet owner renting your property?

Benefits for landlords of letting property to pet owners

Although they may not seem obvious initially, there are some benefits to be had for landlords who allow tenants to have pets.

From a business and financial point of view, good properties that allow pets are often in demand and, as tenants have less of a choice available to them, they may be more likely to pay a higher rent for the right property.

It’s not just the inside of the property that matters to pet owners, but also the outside too. If there’s a garden, or the property is away from busy main roads, then it may be particularly suited for dog or cat owners.

Plus, as properties that allow pets are thin on the ground, existing tenants may be more likely to renew their tenancy, rather than having to worry about finding somewhere else suitable for their needs and their animals.

Before you take the plunge and decide pets are fine for your rental properties, don’t forget to double-check that it will be okay. For example, if you have a leasehold property, then you’ll need to ensure the lease does allow pets.

If you want to invest in property costing under £175,000 and take advantage of the reduced stamp duty fees, then time is running out.

The stamp duty holiday applies to property valued at under £175,000 and means that buyers don’t have to pay any stamp duty on their purchases. This can make a significant difference and save a good chunk of money.

The stamp duty holiday was came into effect on 3rd September 2008, originally running until April 2009, but it was subsequently extended until 31st December 2009. No further extensions have been announced, so it looks likely that it will finally come to a halt at the end of the year.

Assuming it does all end, from 1st Jan 2010, buyers will again be faced with paying 1% fees for stamp duty on all properties with a value of over £125,000.

According to organisations such as the Home Builders Federation, the Building Societies Association and the National Association of Estate Agents, the stamp duty holiday has had a significant effect on the number of property sales this year, which has helped stop the market from becoming too stagnated. They’re concerned that reinstating it could have further detrimental effects and are calling on Chancellor Alistair Darling to extend the scheme until the end of 2010.

For property investors choosing to buy distressed property, they may not be affected by the change, as many properties are available at a greatly reduced price and fall into £125,000 or under price bracket anyway.

But if you’re an investor who likes to have a range of different properties in your portfolio, perhaps by balancing out rental flats or smaller properties with larger homes, and are likely to buy in the higher price range, then you need to get cracking with your purchases now!

When you’re renting out a property, one of the tasks you need to do before you get a tenant is to create an inventory of everything that is in the property.

Not only does this help give the tenants an idea as to what is included in their rental, and what isn’t, but it’s also useful to have at the end of a tenancy, so you can identify any missing items, items that have changed, any damage caused to items or any extra items left behind that don’t belong there.

Creating Your Inventory

It may seem a bit tedious having to create an inventory, but it’s a worthwhile task, especially if any disputes occur further down the line.

Go through the property room by room and make a note of everything that is included in the rental for your tenants – curtains, kitchen equipment, furniture etc.

Make a detailed list of all the items, including:

* Details of the manufacturer, model and serial numbers.
* A good description of the item.
* Details of any bumps, scraps or defects the item currently has.

Many landlords are now choosing to photograph the inventory items too, as photos can be used at a later date if any issues arise over what was included or what condition it was in.

If you are going to photograph items, it’s a good idea to date printed photos. If you have any items of particular value, or simply want to be extra careful, then you could even sign and date them and get them counter-signed by the tenant at the start of the tenancy.

In addition to photo, you could also video the property, highlighting which rooms certain items are in.

A copy of the completed inventory should be given to your tenant, as well as the original being kept by you or your letting agent. Hopefully problems won’t occur, but if there are any minor – or major – quibbles, then the inventory can be highly valuable to have.

First-time and would-be property investors may think the property investment world is easy to break, but all too often they don’t do their homework and make silly mistakes.

Here are five of the common mistakes made by first-time property investors.

1. Not choosing the right location 

Getting the location right for your property is crucial if you’re going to rent it out.

But new investors often assume they should buy property in an area they know, or get distracted by the look of a particular property.

However, there’s no point in owning a lovely property in an area where no-one wants to rent it, so you should abandon any pre-conceived ideas about where you should buy, and look to the market to find areas where people want to rent.

2. Not treating property investing as a business

If you’re going to succeed as a property investor, then you need to treat it as a business from the start.

Your key focus should always be on which property investments will give you the best capital growth and rental yields, and won’t cost you an arm and a leg in the first place.

3. Getting too emotionally involved in the property

If you’re going to make a go of it as a serious property investor, then you need to leave your emotions about a property behind.

It’s not going to be a house that you’ll live in, so there’s no point in getting carried away with interior decorating ideas or wanting to stamp too much of your personality on the property. You’re buying it to rent out, so it’s best to stick to neutral interiors and colours that will appeal to everyone, not just you.

4. Not using a property management company

Many first-time investors look at property management options and see it as an expense which they could save on.

However, it’s usually only a small fee, it’s tax deductible and you gain the huge benefit of having experts to handle tenant problems. With the best will in the world, not all rentals run smoothly all the time and it offers great peace of mind to have a company handling the rental business side for you.

Not only will they be experienced at dealing with tenant problems, but they’ll also have a maintenance team ready to handle leaks, repairs and unexpected problems.

5. Buying an expensive property

Would-be property investors may think that buying an expensive property automatically means they can charge higher rent and make more money.

Although high end rentals can work well when the economy is buoyant, it certainly doesn’t mean that you can make more money. You may well have to work harder to find the right tenants and they’re not a good option during an economic downturn.

In the long run, it’s better to invest in an average property, where they’ll be far more potential tenants, than splash your cash on a high end investment.

How have you found it getting a buy-to-let mortgage recently? Is it still easy to find options, or have you experienced any problems?

According to research carried by The Paragon Group, professional landlords are reporting that buy-to-let mortgages are becoming difficult to obtain.

The findings arouse after Paragon’s recent Trends research, which involved a panel-based survey of UK landlords. Over half of the professional landlords taking part in the research (54%) had attempted to obtain a buy-to-let mortgage in the three months leading up to the end of August 2009, either for buying a new property purchase or for remortgaging purposes.

Of those 54%, nearly nine out of 10 commented that it was more difficult to secure a buy-to-let mortgage than it previously had been.

Nearly one in 10 (8.4%) people said they’d not noticed any change in the availability of buy-to-let mortgages and 2.8% said they’d found it slightly easier to get a mortgage.

The number of buy-to-let mortgage options available has dropped slightly from May 2009, from 218 to 196, but they’re certainly not unobtainable.

One of the advantages of buying property from HBF Investments, compared to on the open market, is that there are dedicated panel brokers at hand to help you get the best mortgage deal.

If you’re going to purchase an investment property with HBF Investments, you’ll be registered with a panel broker, who’ll quickly and efficiently check out the latest mortgage deals and help you find the best option for you.

At a time when the number of available buy-to-let mortgages seems to have decreased, it’s even more helpful to have such an individual, tailored option available.

One of the biggest difficulties for landlords is finding themselves faced with problem tenants, especially when they’re not paying rent and refuse to move.

With the case of Thanos Papalexis in the news (an example of how not to deal with a problem tenant), here are five useful tips for avoiding tenant problems.

1. Use a property management or lettings company

Although you may be tempted to go it alone and avoid the extra cost of using a professional property management or lettings company, they do have their advantages. They’re especially useful to have on board if problems occur, and if you’re new to letting out properties, as they should be up-to-date and experienced with dealing with problem tenants.

2. Credit check your tenants

Either you, or your letting agent, should carry out credit checks of your prospective tenant. There are various credit reference agencies available to use and this will highlight any debt issues or any previous County Court judgements against them.

If they don’t have good credit references, or if you discover they don’t have a bank account, then avoid renting your property to them.

3. Check tenant references

When you’re first letting out your property, it’s crucial that a range of references for your tenant are thoroughly checked out. This includes their employment references, so you can check their current and past jobs, and their personal references, for example from a previous landlord, so you can find out about their tenant track record.

4. Sort out maintenance problems quickly

Some tenant problems can occur due to landlords not fixing problems soon enough, and tenants then getting stroppy about not paying rent until things are put right.

So, if any maintenance issues arise with the property, ensure they’re fixed and sorted out quickly (if you’re using a management company, then they should have established contacts with maintenance workers).

5. Carry out regular landlord visits or property checks

Regular landlord property checks can highlight potential problems in advance and give you time to sort them out before further issues occur. Do remember to give your tenants notice if you’re going to be calling around (negotiate a convenient day and set time), as unexpected visits will not go down well.

Source: David Coughlin – HBF Investments