Benefits of Using a Letting Agent

Fully managed or let only?

When landlords use letting agents to rent out their properties, they are usually presented with the choice of going ‘Fully Managed’ or ‘Let Only’. Making the right choice depends on the individual needs of each landlord, and expert guidance from an experienced letting agent.

At Merrick Binch, we take the time to find which service is right for each landlord. If you have any questions about the difference between fully managed, let only, or a combination of the two, call the Merrick Binch Lettings Team on 02476 578888.

Presenting your rental property

The quality of the interior decoration, and the way the property is presented may substantially affect the level of rental achieved. By following the following 4 golden rules, maximum rental yield can be achieved.

Colour

Carpets and walls should be neutral. White, cream, and light pastel shades make a cleaner, fresher impression. Nowadays, paint finishes are much easier to maintain than wallpaper. Good quality, hardwearing curtains and carpets should be provided as they will have a much longer lifespan, and attract quality tenants.

De-clutter

Make sure the property is clean, and that there are no dirty washing up items about.
Bathroom areas should be clean and make sure the toilet seat is down. Beds should be covered.
Go through the property’s contents and ask yourself the following question- Does this item have a definite benefit to a tenant, or does it add beauty to the home.
If the answer is no, then get rid, or store in the loft or garage.
Make sure that the garden is tidy and inviting. There is nothing more off putting to a potential tenant, than an overgrown lawn, or out of control hedges.

Lighting

Even in the summer we can have some very dull days, so turn the lights on when doing viewings.
Lights make a property welcoming. If the viewing is taking place after dark, make sure the front door outside light is working and is switched on.
Ensure that all blown light bulbs are replaced.
Consider using downlighting in kitchens and bathrooms.
In furnished properties, consider providing table lamps, and don’t forget the security features of outdoor lighting connected to movement sensors.

Odours

The smell of a property is the sense most remembered by tenants viewing properties.
If the previous tenant has kept pets, ensure that the carpets are professionally cleaned and neutralized. Make sure there are no food smells, and that toilets and sinks are cleaned and disinfected.
Let some fresh air in, and avoid using overpowering air fresheners to mask bad smells.
Consider brewing a pot of freshly ground coffee. This will aid the tenants in imagining what it would be like to live in your property.

If your property is vacant or you are having trouble finding a tenant, it could be down to the decoration or presentation of the home. For more free advice, call the Merrick Binch Lettings Team on 02476 578888.

Referencing

The cost in time & money to evict an unsuitable tenant from your property can run unto the thousands. The average solicitors fees to get a tenant to court is above £500, plus potential damages to the property, plus missed rent payments, can mean that the costs soon rack up.

THIS CAN BE AVOIDED BY FINDING THE RIGHT TENANT, AND ENSURING A STRINGENT REFERENCING PROCESS IS CARRIED OUT.

A professional letting agent will always undertake the following as a minimum referencing process

Credit check

A credit check will show any adverse credit information such as CCJs, and also confirm if the tenant is registered on the voters roll.

ID and proof of residency

Original photo identification should always be taken to establish the tenant’s true identity.

If the tenant is not registered on the voters roll, then an original utility bill showing the tenant’s address should be seen. Bad tenants try and hide their true whereabouts to avoid any rent arrears or bad credit being shown, so seeing a proof of residency is essential.

Employers reference

To make sure a tenant can physically afford the monthly rent commitment, then an employers reference should be taken. This will confirm if the job is permanent, if there is any threat of redundancy, & how much the earnings are. Professional letting agents will have an affordability guide to assess if a tenants salary can comfortably afford the monthly rent.

Previous landlords reference

Although previous tenancy history is no guarantee of future payments, it is a very good indicator. A previous landlords reference will confirm if rent is paid in full and on time. It will also confirm if a tenant has kept the property in good condition and if there were any damages incurred.

In conclusion, once all the relevant information has been gathered, a landlord can make an informed decision whether or not the tenant is suitable. At Merrick Binch Lettings, we can give advice to new & experienced landlords on the right way to go.

For more free advice, call the Merrick Binch Lettings Team on 02476 578888.

Tenant’s deposits and the importance of professional inventories

The return of deposits has long been one of the main causes of disputes between tenants & landlords.

Since 6th April 2007, deposits must be held by an independent scheme that protects the money, and arbitrates when tenants & landlords disagree about whether the deposit (or how much of it) should be returned. It also ensures that tenants will be able to get their money back if the landlord goes bust, or cannot be contacted.

There are 2 types of tenancy deposit protection schemes available for landlords.

The first is an insurance based scheme where the landlord retains the deposit and pays a premium to the insurer. The insurance arrangement will ensure the return of the deposit to the tenant if they are entitled to it. The second is a custodial scheme where the landlord pays the deposit into the scheme. Interest accrued by deposits will be used to pay for the running of the scheme.

Both schemes provide a free dispute resolution service, and this is where the importance of a professionally prepared inventory is vital. The inventory should show a list of all the contents of the property including curtains, carpets, kitchen appliances and will also state the condition of walls, windows, light switches etc.

It should be checked in with the tenant at the beginning of the tenancy, and at the end when the tenant is moving out. At move out stage, the landlord should assess the condition and prepare a schedule of dilapidations (damage, missing items) taking into account any general wear and tear. In the event of any disputes about how much deposit is to be returned, the detail of the original inventory is vital, when being assessed by the dispute resolution service.

If you need any advice on preparing a professional inventory, or have any questions about tenant’s deposit, please call the Merrick Binch Lettings Team on 02476 578888.

Coventry Accredited Property Scheme (CAPS)

As part of a strategy for tackling poverty, the Coventry City Council committed their Housing Department to introduce a scheme to recognise and publicise decent residential accommodation.

This has resulted in the Coventry Accredited Property Scheme to recognise privately rented residential property which is of a good physical standard and is well managed.

What is accreditation?

Basically it is a set of standards relating to the management and physical condition of the property. Landlords apply (free of charge) to join the scheme and in doing so agree to abide by the standards. The properties are then accredited when these standards are met.

The standards amongst others include:

• General fitness for habitation

• Gas, electrical & furniture safety

• Security & fire precautions

• Repairs & complaints procedures

• Energy efficiency

Benefits for landlords

Landlords that have achieved the quality mark of accreditation can expect the following benefits:

• Marketing advantages in attracting the right tenants

• Help with letting vacant properties

• Lower turnover of tenants

• Enhanced standing with potential mortgage lenders

• Decrease in damage & misuse of your properties
  
  Merrick Binch Lettings strongly support the CAPS scheme.

For more information and to take things further, call the Merrick Binch Lettings Team on 02476 578888.

Working with and accountant

Worth his or her weight in gold, your accountant needs to understand your financial goals as well as your financial circumstances.
You are liable to pay tax on any rental income you receive from your properties, and yet there are a number of allowances you can claim before computing the final tax figure. You can deduct the cost of interest payments on your mortgage, the cost of the letting agents, property maintenance and also an amount for wear and tear if your property is furnished.

The cost of furniture bought expressly for the property is allowed and items such as carpets, the shower curtain, kitchen accessories, crockery & cutlery are all legitimate costs. Also, when you make trips to the property to decorate it, incur the expense of an electrician or a decorator, you can claim this cost. You should record all costs incurred in setting up a property portfolio because the accountant may not regard them as eligible to be claimed if you cannot provide receipts.

You can also make use of offsetting the tax against your personal tax allowance. For example, if you are buying a property with your partner and they are not making use of their personal tax allowance as they are not working, the rental income tax liabilities can be offset significantly if the property is in joint names. It is prudent to make detailed notes of your income and expenditure, and keep any relevant receipts. Your accountant will have a preferred method of keeping records which you should discuss with him.

At Merrick Binch, we can give general advice of tax matters when renting properties, and can also introduce you to a range of experienced accountants specialising in tax matters of landlords.

For more information, call the Merrick Binch lettings team on 024 7657 8888.