How do I know that my paperwork is correct?
In recent years the government has tightened the legislation surrounding tenancies and landlords must be aware of their responsibilities. Recent changes introduced on 1st October 2015 require landlords to provide tenants with the most recent version of the How to Rent Booklet, as well as copies of the gas certificate and EPC on signing the contract. They are also required to provide working smoke alarms on all floors and show that they have been tested as well as installing carbon monoxide alarms in all rooms with a solid-fuel burning appliance. In addition, landlords can no longer serve a Section 21 at the start of a tenancy and from February 2016 they must ensure that their tenants have the right to rent in the UK. The regulations and requirements can be confusing and this is where South & Co can help. We ensure that all of our tenancies adhere to current legislation and we are happy to advise you if you have any queries.
Who is responsible for the bills and council tax?
Unless specifically stated in the tenancy agreement, the tenants will be responsible for paying all bills and Council Tax for the duration of the contract. However, be aware that you will be responsible for paying the bills and Council Tax during any void periods; gas and electricity suppliers often have a daily standing charge which is owed even if no energy is used and the council still charge a discounted rate for empty properties. Failure to pay these charges can result in legal action being taken against you which could lower your credit score and affect your ability to secure future finance. When we manage a property South & Co write to the utility suppliers and council every time a tenant moves into or vacates your property and we will deal with any correspondence from them on your behalf.
Do I need an inventory if my property is unfurnished?
Whether your property is furnished or unfurnished, a detailed inventory is essential to document the condition of the property at the start of the tenancy and to protect you in the event of any damage at the end. The condition of every wall, floor covering, window and appliance should be documented with supporting photographic evidence where necessary. South & Co create a video inventory prior to tenants moving into every property that we manage so that we have irrefutable proof of the condition at the start of the tenancy. The video inventory is included FREE OF CHARGE in our managed service.
What sort of insurance do I need?
When you rent out a property you must ensure that you have landlord’s insurance instead of your standard household cover. This will cover your building against all insurable risks up to the full replacement cost and will usually include Public Liability Insurance of at least £2,000,000 to protect you against claims made by tenants for personal injury or damage to their possessions arising from incidents connected with your property. Unlike owner occupied properties, landlords do not normally need full contents cover (unless the property is let on a fully furnished basis). South & Co work closely with Landlordsure, a local insurance broker in Crewe, who provide specialist landlord’s insurance at a very competitive rate. Call them on 01270 416264 and quote South & Co to obtain a quote.
Should my property be furnished?
Flexibility is the key but this obviously involves additional involvement or expense. Flats and smaller apartments benefit greatly if there is an option to let on a furnished basis and can command a higher rent level. On the other hand a furnished three bed semi without an unfurnished option can very much deter tenants and prove difficult to secure a quick let; the exception to this is if you are targeting a specific tenant market such as hospital workers or a company let as they often require larger furnished properties. Flexibility is also advantageous regarding white goods, which can be used as a bargaining tool. Don’t forget however that if you provide appliances you are also responsible for the maintenance or replacement of them should they fail.
How long is a tenancy for?
Our standard procedure is to draw up a six month Assured Shorthold Tenancy agreement (AST). If South & Co manage the property we will liaise with you and the tenant regarding renewing the agreement for a further six months prior to the initial agreement expiring. We do NOT charge you or the tenant for renewing the contract. There is also the option after the initial six month term of opting for a periodic tenancy which allows the tenancy to run on a month-by-month basis. The tenant would need to serve a one month notice period whilst you would have to give two months’ notice, both in writing.
When should my property be advertised?
We recommend marketing properties six weeks before the time you would like a tenant to be moving in; this takes into account the fact that most tenants have to give one month’s notice when they find a property they like.
Will my property rent?
We believe in a totally honest approach and will advise you whether your property is in a condition for letting during our initial visit to the property. Generally, there are only two reasons why a property will not rent: either the rent is too high or the condition of the property is not suitable for letting. We promise to provide you with a realistic rental valuation and inform you of what, if anything, needs doing to the property prior to marketing. If your property doesn’t let it’s our job to find out why: we monitor interest levels and internet portal click-through rates and if things aren’t working we’ll come back to you with solutions. Our pro-active approach means that properties aren’t sat empty for long.
Will I have to pay tax on the rental income?
As a landlord you must submit a self-assessment tax return each year and you should inform HMRC of your property income no matter whether you are making a profit or a loss from the property. However, you pay tax only on your net rental profits – that is, your rental income, less the allowable expenses (deductions) of letting, so if you have no profit, you will have no tax to pay.
You can currently use the interest you pay on your mortgage each year to offset your tax bill; landlords can claim relief at their personal tax rate. However, in his July 2015 budget, the Chancellor introduced new reforms which mean that landlords will no longer be able to deduct the cost of their mortgage interest from their rental income when they calculate a profit on which to pay tax. This change is being phased in from 2017 and landlords are advised to seek professional advice as to how this will affect them.
How do I know my house will be looked after?
There is always an element of risk when renting out a property; however, we successfully reduce this risk to the absolute minimum through our thorough and stringent tenant referencing process. Unlike most agents we do not outsource this vital element to a third party as our in-house referencing achieves results which cannot be bettered. In addition to this we manage properties very tightly: we carry out property inspections on a three monthly basis and send the landlord a copy of the report. Our pro-active approach and hands-on management means that potential problems are dealt with in the early stages and do not escalate at a later date.