Description
Book SynopsisEverything potential landlords need to know about the UK rental market Renting Out Your Property For Dummies is the essential roadmap to successful property letting.
Trade ReviewThis book is ideal for someone considering becoming a landlord and who has never let a property. (Landlord Focus, March 2013)
Table of ContentsIntroduction 1
About This Book 1
Conventions Used in This Book 1
What You’re Not to Read 2
Foolish Assumptions 2
How This Book is Organised 3
Part I: So You Want to Be a Landlord? 3
Part II: Renting Your Property 3
Part III: The Brass Tacks of Managing Rentals 4
Part IV: Techniques and Tools for Managing 4
Part V: Money, Money, Money! 4
Part VI: Only for the Daring 4
Part VII: The Part of Tens 5
Part VIII: Appendices 5
Icons Used in This Book 5
Where to Go from Here 6
Part I: So You Want to Be a Landlord? 7
Chapter 1: Do You Have What it Takes to Manage a Buy-to-Let Property? 9
Recognising the Advantages of Owning Rental Property 10
Being Honest with Yourself about Your Skills and Experience 11
People who need people: Putting your interpersonal skills to the test 11
Making sure you have good management skills 13
Chapter 2: Deciding Whether to Manage Your Property Yourself or to Hire an Agent 15
Managing Your Rental Yourself 16
Recognising the advantages of self-management 16
Paying attention to the drawbacks 17
Managing your property from a distance 17
Exploring Professional Management 18
Knowing what to look for in a letting agent 19
Telling the good from the bad and the ugly 20
Paying your letting agent 23
Making sense of management agreements 25
Knowing the tax consequences of using a management company 26
Chapter 3: Becoming an Accidental Landlord 27
Deciding to Rent Out Your Own Home 27
Needing to move but unable to sell 28
Recognising your home’s limitations 28
Setting the price 29
Finding a tenant 30
Knowing the law 30
Seeking Consent-to-Let 31
Staying on your existing mortgage 32
Paying a premium 32
Switching to a buy-to-let mortgage 32
Remembering your insurer 33
Part II: Renting Your Property 35
Chapter 4: Finding the Perfect Rental Property 37
Knowing What to Look For 37
Deciding on size 38
Setting your budget 39
Finding the ideal location 39
Considering dilapidated properties 41
Letting out a basement in your home 41
Sourcing Your Rental Property 42
Using an estate agent 42
Buying at auction 43
Using the Internet 44
Checking Out the Tenant Pool 44
Chapter 5: Preparing Your Rental Property for Prospective Tenants 45
Coming Up with a Plan to Handle Vacancies 46
Considering renovations and upgrades 46
Paying attention to the exterior or common areas 48
Making sure the interior of the property is up-to-scratch 49
Deciding whether to furnish 51
Preparing Your Rental Property the Right Way 52
Keeping up appearances 53
Making sure everything’s ticking over 53
Getting out the paintbrush 54
Applying some elbow grease 55
Sorting out flooring 56
Introducing Energy Performance Certificates 57
Inspecting Safety Items 57
Facing up to fire 57
Checking the electrics 58
Taking sensible precautions 58
Using Outside Contractors 59
Chapter 6: Rent, Deposits and Tenancy Agreements: The Big Three of Property Management 61
Setting the Rent 62
Examining the return on your investment 62
Conducting a market analysis of the rent in your area 64
Coming Up with a Fair Deposit 65
Protecting your tenant’s deposit 66
Setting a reasonable deposit 67
Avoiding non-refundable deposits 67
Increasing deposits 68
Using a Tenancy Agreement 68
The Rent Assessment Committee 70
A standard tenancy agreement 70
Chapter 7: Generating Interest in Your Rental Property 73
Developing a Marketing Plan 73
Determining your target market 74
Knowing what your tenants stand to gain from your property 75
Understanding the Importance of Good Advertising 76
Rifle versus shotgun: Picking an advertising approach 77
Kerb appeal: Getting your property to rent itself 78
Looking at Your Advertising Options 79
Word-of-mouth 80
Property signs 81
Newspapers 83
Internet 89
Flyers 90
Rental publications 92
Local noticeboards 92
Local employers 92
Letting agencies 93
Advertising without Discriminating 93
Chapter 8: Handling Prospective Tenants and Showing the Property 95
Making the Most of Technology 95
Using your phone’s special features to your advantage 96
Preparing for Phone Calls 99
Having the basic tools ready 99
Answering the phone 103
Providing and obtaining the basic information 104
Convincing the prospective tenant to rent your property 106
Checking the prospective tenant’s suitability over the phone 107
Handling phone objections 109
Converting phone calls to rental showings 109
Planning Ahead for Open Houses and Individual Viewings 111
Holding an open house 112
Scheduling individual appointments 113
Providing directions to the property 113
Showing Your Rental Property 114
Showing a vacant property 114
Showing an occupied property 115
Checking if the prospective tenant is suitable during the property viewing 116
Resolving objections 117
Convincing the prospective tenant 118
Inviting the prospective tenant to rent your property 118
Persuading the prospective tenant to complete a rental application 119
Holding a deposit 120
Using waiting lists 121
Handling Hazardous Materials and Environmental Issues 122
Lead-based paint 122
Asbestos 123
Radon 125
Chapter 9: Eenie, Meenie, Miney, Mo: Selecting Your Tenants 127
Understanding the Importance of Screening 128
Establishing Tenant Selection Criteria 129
Verifying Rental Applications 131
Verifying the identity of all adults 132
Reviewing occupancy guidelines 132
Checking rental history 133
Verifying employment and income 134
Reviewing the applicant’s credit history 136
Talking with all character references 138
Dealing with guarantors 138
Notifying the Applicant of Your Decision 139
Avoiding Complaints of Discrimination 140
What it is and what it isn’t 140
Steering 141
Children 142
Disabled tenants 142
Reasonable accommodations 143
Guide dogs 144
Sexual harassment 145
Part III: The Brass Tacks of Managing Rentals 147
Chapter 10: Moving in the Tenant 149
Establishing the Move-In Date 150
Meeting with Your Tenant Prior to Move-In 151
Going over the rules with your new tenant 151
Reviewing and signing documents 153
Collecting the money 157
Inspecting the property with your tenant before the move-in 158
Giving your tenant an informational letter 161
Distributing the keys 162
Setting up the Tenant File 164
Preparing a Welcome Pack for Your New Tenant 165
Chapter 11: Collecting and Increasing Rent 167
Creating a Written Rent Collection Policy 168
When rent is due 168
How rent is paid 170
Dealing with Rent Collection Problems 173
Collecting late rent 173
Charging late fees 174
Handling bounced cheques 175
Dealing with partial rental payments 176
Serving legal notices 177
Increasing the Rent 177
Deciding when and how much 178
Informing the tenant 178
Sweetening the pill 179
Chapter 12: Keeping Good Tenants – and Your Sanity 181
What Tenants Want 182
Timely and effective communication 182
Quick responses to maintenance requests 183
Respect for your tenants’ privacy 184
Enforcement of house rules 184
Fair rent and increases 185
Renewing Tenancy Agreements 185
Tempting your tenant to stay 185
Better the devil you know 186
Chapter 13: Dealing with Problem Tenants 187
Recognising and Responding to Common Tenant Problems 187
Late payment of rent 188
Additional occupants 188
Inappropriate noise levels 189
Unsupervised children 190
Exploring Alternatives to Eviction 190
Negotiating a voluntary move-out 191
Using mediation or arbitration services 191
Taking your tenant to court 192
Evicting a Tenant 192
Serving legal notices 192
Enforcing County Court Judgements 194
Knowing What to Do in Unusual Tenant Situations 195
Bankruptcy 195
Sitting tenants 195
Broken tenancy agreements 196
Subletting 196
Departing housemates 197
Domestic problems 197
Death of a tenant 198
Chapter 14: Moving Out Tenants 199
Requiring Written Notice 200
Giving Your Tenants a Move-Out Information Letter 201
Inspecting the Property’s Condition at Move-Out 202
Noting damages 202
Using a Deposit Itemisation form 205
Handling Special Move-Out Situations 206
When damage and unpaid rent exceed the deposit 206
When disputes arise over the deposit 207
When the rental property is abandoned 207
Part IV: Techniques and Tools for Managing 209
Chapter 15: Maintenance 211
Recognising the Importance of a Maintenance Plan 212
Being Prepared for the Different Types of Maintenance Issues 213
Emergency repairs 213
Preventive maintenance 214
Corrective maintenance 214
Custodial maintenance 215
Cosmetic maintenance 216
And what if I don’t? 216
Handling Rental Property Maintenance 217
Responding to a tenant’s request for repairs 217
Keeping tenants from fixing things themselves 218
Purchasing maintenance parts and supplies 219
Chapter 16: Safety, Security and Insurance 221
Tackling Crime in and around Your Rental Property 221
Participating in your local Neighbourhood Watch scheme 222
Paying attention to tenants’ questions and complaints about safety-related issues 223
Responding to crimes when they occur 224
Taking Security Precautions 225
Keys 225
Lighting 226
Addressing Environmental Issues 227
Fire safety 227
Carbon monoxide 229
Natural disasters 229
Cover Me, I’m Going In! Making Sure You Have the Insurance You Need 230
Choosing a company and getting the coverage you need 230
Understanding the types of insurance cover available 232
Determining the right excess 234
Encouraging your tenants to get home contents insurance 234
Handling potential claims 235
Part V: Money, Money, Money! 237
Chapter 17: Raising the Cash to Buy Your Rental Property 239
Making Sure You Can Afford to Buy a Rental Property 240
Buy-to-Let Mortgages 240
Generating enough rental income 241
Raising a deposit 242
Finding the right buy-to-let mortgage 243
Remortgaging to a better deal 247
Releasing equity 248
The more the merrier 248
Renting Out in Order to Buy Again 249
Using a Mortgage Broker 249
Chapter 18: Avoiding Property Taxes 251
Knowing Which Taxes You’re Responsible for Paying 251
Avoiding Income Tax 252
Allowances on Furnished Property 253
Avoiding Capital Gains Tax 254
Steering Clear of Council Tax 255
Minimising Stamp Duty Land Tax 256
Advanced Tax Avoidance Tips 256
Share and share alike: owning property with someone else 257
Thinking about Inheritance Tax 258
Chapter 19: Using a Company to Hold Your Property 261
Understanding the Pros of Using a Company 261
Beneficial tax regime 262
Limited liability 262
Flexible ownership 263
Status 263
Spotting the Cons of Using a Company 263
Setting Up a Property Company 264
Deciding on private or public 265
Choosing a name 265
Registering to pay tax 266
Placing Existing Property into a New Company 266
Chapter 20: Financial Management and Recordkeeping 267
Organising Your Files 267
The property ownership file 268
Separate files for each rental property 268
Tenant files 268
Insurance file 269
Maintaining Property Records 269
Taking Care of Business: Rental Property Accounting 270
Creating a budget and managing your cash flow 271
Using technology for financial management 272
Hiring a professional number-cruncher 273
Part VI: Only for the Daring 275
Chapter 21: Government Programmes 277
Housing Benefit 278
Housing Associations 279
How they work 279
Which properties are eligible 280
Pursuing this option 280
Chapter 22: Working in Niche Markets: Students, Pets, HMOs and Smokers 283
Taking another Look at Your Pet Policy 283
Renting to Students: Is It Really Like the Young Ones? 285
Getting a rental property in a university town 285
Preparing for the challenges involved 286
Houses in Multiple Occupation (HMOs) 287
Establishing whether you need a licence 287
Taking health and safety onboard 288
Changing an HMO: when to notify the local authority 288
Smoking or No Smoking? Tapping into Potential Markets 289
Catering to smokers 289
Designating your rental properties no smoking 290
Part VII: The Part of Tens 291
Chapter 23: Ten Reasons to Become a Rental Property Owner 293
You Can Diversify Your Investments 293
You Don’t Need Much Money to Start 293
It Can Be a Second Income 294
You Gain Tax Advantages 294
Property Holds Its Value 294
You Get Leverage 295
It Beats Inflation 295
You Get a Positive Cash Flow 295
It’s an Alternative to a Pension 296
It Can Make You Wealthy in the Long Run 296
Chapter 24: Ten Ways to Get and Keep Full Occupancy in Your Property 297
Maintain Kerb Appeal 297
Keep the Property in Rent-Ready Condition 298
Establish a Competitive Rent 298
Offer Prospective Tenants a Rent Guarantee 298
Stay Ahead of the Technology Curve 299
Offer Referral Fees 299
Accept Pets 299
Offer Move-In Gifts or Upgrades 300
Contact Big Companies or Corporations 300
Accept Housing Benefit 301
Chapter 25: Ten Ways to Increase Cash Flow 303
Increase the Rent 303
Decrease Your Operating Expenses 304
Reduce Your Turnover 304
Remortgage Your Rental Property – Perhaps 304
Upgrade Your Rental Property 305
Pre-Let to Minimise Void Periods 305
Buy Freehold Rather than Leasehold 306
Avoid Gas Appliances 306
Do Your Own Repairs 307
Manage Your Rental Properties Yourself 307
Part VIII: Appendices 309
Appendix A: Resources 311
Professional and Trade Organisations 311
Government Organisations 312
Further Information 313
Mortgage Brokers 313
Credit Reference Agencies 314
Appendix B: Forms, Templates and Standard Letters 315
Index 361
