Lots of replies to the weekend introductions – we are sending out information today. Have you read our UK and international property newsletters for October? Email back for those if you have missed them.
This HMRC tax amnesty, of sorts, for BTL investors, applies to ‘accidental’ landlords as well as professional landlords. HMRC says that all sorts of BTL investors are responsible for underpaying almost £500 million in tax a year. ‘Whether through misunderstanding of tax rules or deliberate evasion, both novices and specialist landlords who have not declared all their rental income have to come forward and settle up.’
The Let Property Campaign runs to February 2015. ‘Any penalty they (BTL investors)pay by coming forward voluntarily will be lower than if HMRC comes to them first – which can be up to 100 per cent of the tax due and a possible criminal prosecution. Any landlord who may not have declared all their rental income may be contacted by HMRC. They will not then be able to make use of the opportunity offered as part of this campaign.’
The Happy Tenant Company works on behalf of landlords to manage their properties and improve their yields and has put together this list of 10 top tips for buy-to-let landlords.
Leave it to the professionals – Whether a tenant or landlord, choose a letting agent that is a member of a recognised professional body, such as Association of Residential letting Agents (ARLA) or National Approved Letting Scheme (NALS).
Check the agency fees – Typically, agents charge around 8 per cent for finding a tenant but many charge considerably more. Most agents will charge a renewal fee, often at the same level as the prior year’s fees.
The Happy Tenant Company believes you should not pay renewal fees as it is effectively charging again and again for finding the tenant.
Take one year at a time – Agents may manipulate the situation so that the landlord and tenant both think the other wants a long term tenancy of, say three years, enabling them to charge huge fees on commencement of the tenancy. This places the landlord at great risk should the tenant leave prematurely.
Shop around – Find a company that represents a large number of landlords so is able to negotiate ratings with reputable letting agents, whereas most landlords generally have a single investment property and have little negotiation power. That said, shopping around may lead to savings on the letting and renewal fees.
Safety first – Ensure you are compliant with current letting legislation and safety regulations. Non-compliance in most areas can result in hefty fines and in some cases imprisonment. Consider using a reputable property management company that is independent of a letting agent.
Check for mark-ups and secret commissions – Many agents mark up by asmuch as 300 per cent for tenant referencing, cleaning, inventory andtenancy agreements. The Happy Tenant Company charges at cost, supplying landlords directly with the contractor’s invoice.
Confirm who is paying for what – Before signing-up get the costs confirmed in writing, as some rogue lettings agents double charge the tenant and landlord for the same service, such as for inventory when a tenant moves in, referencing and setting up a tenancy agreement.
Understand who will be managing the property – If you contract your agent to manage the property as well as find the tenant then it is important to ensure you meet the relevant property manager, as many agents simply outsource the work to third party companies and simply
make a margin on the fees you pay them. Even if they do have in house managers, make sure they have the relevant experience and the capacity to manage your asset.
Seek transparency – Most agents take commissions from contractors they engage to undertake the property management services such as maintenance, cleaning and inventory and it is generally without the knowledge or consent of the landlord, who ultimately foots the bill.
Deal fairly with your tenant – A happy tenant is simply good for business and is far more likely to pay their rent on time and stay longer, thereby, reducing void periods. Equally, if they are on side, they will act as your eyes and ears and report issues at the early stage, preventing the small things becoming big problems.
Want to know more. Google The Happy Tenant Company!
According to recent research from Zoopla, Glasgow tops the student buy-to-let investment league table. It offers an average gross yield of 4.95 per cent on a typical four-bedroom student property. Next? Hull (4.80 per cent), Manchester (4.59 per cent), Cambridge (4.54 per cent) and Bristol (4.29 per cent).
Lawrence Hall of www.zoopla.co.uk comments, ‘The largest number of students or most prestigious university clearly isn’t necessarily best for investment returns. Landlords need to do their research and take into account the student demand, property supply, average property values and average monthly rents. There is no apparent North/South divide when it comes to student buy-to-let investments and a number of towns in the North are showing higher gross yields than the South as a result of property values having remained lower over the past few years whilst rental demand has increased.’
All for now. I am meeting some of you at the cemetery in Kent later today and look forward to seeing you then. A report will follow for those who wanted to come but could not make it today.
All for now, see you tomorrow.