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Friday, December 30, 2011

2012 property forecast

The 2012 property forecast in the Financial Times predicts an increase in buy-to-let mortgage finance with the continued trend of more banks and building societies looking to increase lending to the sector in direct relation to increasing rental demand.

Savills predicts the trend towards renting will lead to 20 per cent of households in England will be renting by 2015/16 – up from 15.6 per cent of households in 2009/10.

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Thursday, December 29, 2011

New years Resolution/ Revolution!

Christmas is over. Pies sunk and drink quaffed.

A landlords thoughts turn to the inevitable New Year resolutions.

Mine are too numerous to mention fully:
  • I must get control over my keys. Over the years they have bred and now occupy a plastic bowl lurking un-identified in a twisted metal morass
  • I must sort out one of my gardens/ development site which is rapidly turning into something that you are likely to find a yeti in.
  • I must ascertain what is one of my tenants doing with one of my garages. There has been a car in there as a restoration project for the last 7 years! Surely that cant be right.
  • I must do my TAX, TAX, TAX Return!

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Sunday, December 25, 2011

Merry Christmas Landlords




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Saturday, December 24, 2011

Landlord manslaughter of tenant

A 16-stone landlord killed a tenant’s boyfriend.

The landlord Wayne Anthony Larson was jailed for two and a half years after pleading guilty of manslaughter.

The tenants boyfriend, James Way had flooded the basement of the Cardiff rental property after sawing through a water pipe after a row with his girlfriend.

When the landlord was called he jumped on the boyfriend to restrain him causing serious abdominal injuries that later killed James Way.

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Thursday, December 22, 2011

Blackpool rock landlords


Sorry about the lazy awful pun in the title.

Blackpool landlords could be about to face a £935 licence fee from March after councilors approved plans that will effect 751 rental properties in the South Beach area. ( sounds exotic but I doubt its as Miami as it sounds )

A council representative supported the licence scheme by saying “This is a flagship policy for us. The scheme will support the work of the vast majority of landlords, while also clamping down hard on a significant minority who feel they are above the law and fail to manage their properties appropriately.

“This is just a start – in the future we hope to introduce the scheme, where appropriate, in other parts of the resort too.”

I bet you do, £935 a licence, surely you could almost buy a property in Blackpool for that.


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MH leading mortgage rate

The Market Harborough Building Society has come to the market with a leading discounted rate of 4.15% (1.34% discount from lenders SVR) for the term of the buy-to-let loan.  There is also an incentive package with a refunded valuation (max £300) and a relatively low fee of £895. This product is only available for direct business. The mortgage is awarded a 4 star rating by Moneyfacts.

The downside for landlords is the loan to value (LTV) which has a maximum of 70% some way short of the most generous ratios.

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Wednesday, December 21, 2011

Manchester Landlord Given £41,000 Fine

This week, a Manchester based landlords called Lay Heng Chhung, has been charged over claims of renting out flats with potentially deadly flaws and has been fined over £41,000.

According to reports, Chhung’s properties had missing fire extinguishers and smoke detectors, which will definitely have been needed as many of the electrical sockets were overheating and even letting off smoke in some cases.

The conditions were so bad that the tenants have had to be re-housed until a time at which the properties are in a suitable living standard and not potentially lethal to the inhabitants. In total Mr Chhung admitted to 13 offences in court, the majority of which were in relation to housing standards, but he also faced charges on the grounds of not having the correct licenses for owning the rented properties.
 


When faced with the defendant, District Judge, Jonathan Taaffe, told Mr Chhung “This is not an isolated incident. You took a cavalier attitude to the properties, which could have lead to or have contributed to death or serious injury.”

The Judge then issued Mr Chhung with the £41,000 fine and issued payments of £2,000 per month.

Given the state of the properties and the grounds of the fine, Mr Chhung will not be able to claim on his landlord insurance for any of the money and will most likely be unable to rebuild his property business in the future.

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LHA predictions

The government predicts that three quarters of a million tenants will see a reduction in their Local Housing Allowance. They estimate that the average reduction will be £9 a week. This figure could be a lot higher for some tenants with an estimated 21,000 losing as much as £74 per week from their LHA payments.

Shelter commented that "Next year looks set to be even more difficult for private renters,"

Landlords could find their LHA tenants struggling more than usual post Christmas.


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Tuesday, December 20, 2011

BTL mortgages - most popular

Max LTVInitial RateTermCompletion feeBooking feeIncentivesOverall Cost for Comparison
85%5.99% Fixed2 Years1%£130.00No6.6% APR
80%5.49% FixedJan 31 2014 2.5%£0.00Refund of valuation to a maximum of £500 and free legals for remortgages only.5.8% APR
80%4.99% Disc.Tracker2 Years£2995£0.00Refund of valuation to a maximum of £500 and free legals for remortgages only.5.7% APR
75%3.74% Disc.Tracker2 Years£1999£250.00No5.4% APR
75%4.19% Fixed2 Years2.5%£130.00No6.6% APR
70%4.25% Disc.Tracker2 Years0%£199.00Free valuation up to £335 for purchases and remortgages and free legals on remortgages only.6% APR
65%3.99% FixedSep 30 2013 £1295£250.00No5.5% APR
60%2.99% FixedOct 31 2013 £2495£250.00No5.2% APR
60%4.99% Fixed2 Years2.5%£130.00No6.8% APR
IMPORTANT! Due to current market conditions, lenders are withdrawing and replacing products with little or no notice.
Please check our website regularly to see the most up-to-date products available.
Tel: 029 2069 5446

Your home may be repossessed if you do not keep up repayments on your mortgages.
The Financial Services Authority does not regulate some forms of mortgage.

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Monday, December 19, 2011

A Chrismas Carol for landlords

At Christmas we should all look to help those with less. To think about those less fortunate than our selves to help the wider community, help those who are struggling to keep heads above water to share in our fortune. Look out for the 'Tiny Tim's'.

Is it not right that society should be more equal, closer to some kind of socialist ideal, do we not have a morale obligation? Surely, things can only get better?

I mean is it right that one of the architects of the new fairer society Peter Mandelson, moved into an eight million pound house this year yet no one seems able to fathom out where the money came from to buy it?

I question whether the bankers are the ones we should really be bleating on about.

What about he politicians who manufactured the framework for the bankers to exist within and sanctioned that riotous unsustainable spending spree. The ones who have made the gap between 'those with' and 'those without' wider than at any time since Dickens was scribbling his story.

'Tony four mansions' and the ultimate in self serving socialism 'John fish and chips two jags'. (Have you seen him on that insurance commercial?) Did their morale barometers crack over time or were they always just self serving opportunists out to rip off the unsuspecting voters right from the start.

Socialism. Bah, socialism? That's what I say.

Enjoy your turkey, whether that be a bronze organic free range norfolk or a Bernard Matthews vacuum packed roll for one. Whether you're royalty, celebrity, a millionaire or in a homeless shelter it all ends up in the same place.................the toilet.

Merry Christmas

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Increase in accelerated possessions.

There has been a 22% increase in the number of accelerated possessions this year compared with last year.

Nothing more to say.

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Leaseholders Lease Extension Fund

Landlords who are looking at extending their lease may be interested in this charity to offer assistance on the Leasehold Valuation Tribunal (LVT) process.

The fund set up by leasehold reform campaigner Melissa Briggs who has established an organisation www.carlex.org.uk to promote leasehold reform including the greater use of common hold.

The Department of Communities and Local Government also funds the organisation LEASE which provides advice on leasehold matters.

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Saturday, December 17, 2011

First rent jitters

I've just got a new tenant.

For me as a landlord there is nothing more nerve racking than waiting for a new tenants first monthly rent to pop into my rental account.

The fact is; however nice and plausible a tenant appears to be there is always a possibility that you may have just entered into a rental contract with a professional scammer. One that pays the first months rent and deposit and then never pays another bean whilst you have the expensive and laborious process of getting possession.

It's always a relieve when the first rental payment arrives. So far so good!

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Wednesday, December 14, 2011

Rent Arrears

Shelter have stated that they expect tenants to default on rent payments this month in the run up to Christmas.

What can you do if your tenant does default?

If this is the first time your tenant has defaulted the best way to approach this would be to discuss this with your tenant and come up with a monthly payment plan to ensure the arrears are repaid.

However, you may feel that now is the time to bring the tenancy to an end. Non-payment of rent is a breach of the tenancy agreement and if you seek possession on these grounds you need to serve your tenant with a Section 8 Notice. There is information contained in the Legal section of the Landlord's Bible about Section 8 Notices and possession proceedings.

If you would like advice on Section 8 Notices or any other landlord legal matter please either telephone me on 01623 448331 or email me at rbrough@fidler.co.uk.

Rebecca

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Housing association goes BTL

Sovereign Housing Association has moved into the market rent sector after it bought 84 homes in the south west. The housing association is looking to rent the properties for full market rents on the open rental market.

‘We identified a gap in the market and these homes have been let very quickly, due to the increasing demand in the private rented market and the high quality of the units we purchased,’ said James Gibson, regional development director at Sovereign.

Mr Gibson added that he expected the association to make more similar purchases in the coming years as an increasing number of tenants moved into the private rented sector

An interesting move and maybe an indication of things to come. I'm not sure whether it is fair that a subsidised organisation is allowed to move away from its remit to compete in the private rented sector?

Seems to me that this housing association is getting the big fat chocolate cake and eating it too. Lucky puddings.

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BTL mortgages - most popular



Max LTVInitial RateTermCompletion feeBooking feeIncentivesOverall Cost for Comparison
85%5.99% Fixed2 Years1%£130.00No6.6% APR
80%5.49% FixedJan 31 2014 2.5%£0.00Refund of valuation to a maximum of £500 and free legals for remortgages only.5.8% APR
80%4.99% Disc.Tracker2 Years£2995£0.00Refund of valuation to a maximum of £500 and free legals for remortgages only.5.7% APR
75%3.74% Disc.Tracker2 Years£1999£250.00No5.4% APR
75%4.19% Fixed2 Years2.5%£130.00No6.6% APR
70%4.25% Disc.Tracker2 Years0%£199.00Free valuation up to £335 for purchases and remortgages and free legals on remortgages only.6% APR
65%3.99% FixedSep 30 2013 £1295£250.00No5.5% APR
60%2.99% FixedOct 31 2013 £2495£250.00No5.2% APR
60%4.99% Fixed2 Years2.5%£130.00No6.8% APR
IMPORTANT! Due to current market conditions, lenders are withdrawing and replacing products with little or no notice.
Please check our website regularly to see the most up-to-date products available.
Tel: 029 2069 5446

Your home may be repossessed if you do not keep up repayments on your mortgages.
The Financial Services Authority does not regulate some forms of mortgage.

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Tuesday, December 13, 2011

20k fine for harassing tenants

Wimbledon-based estate agents Spudnic Ltd has been fined £20,000 for harassing tenants.

Spudnic were found guilty of turning off water and electricity supplies, damaging a toilet, and sealing up letter boxes in an attempt to get out the tenants of a five-bedroom rental property in Ibsley Gardens, Roehampton.

One tenant on returning home found that the front door locks had been changed and all their belongings packed up and removed from the house.

Paul Ellis, Wandsworth Council member for housing, said: ‘This was a truly shocking and relentless campaign of harassment and intimidation carried out against innocent tenants.

‘The tenants were paying their rent on time and were not causing any problems to their neighbours. Yet this company seemed determined to drive them out. Its behaviour was totally unacceptable."

‘If you are a landlord and you would like a tenant to leave then you simply must go through the proper legal channels. Any tenant who is threatened with an illegal eviction or harassment should contact the council’s housing department straight away.’

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Santander enters BTL market

Santander has joined in the buy-to-let mortgage market. It is going to start by offering BTL products aimed a new and non -professional landlords, with a portfolio of up to just two rental properties.

Search the whole market for BTL mortgages - free search tool

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LHA Discrimination

In these days of equality where at the merest hint of bias or unbalanced treatment could result in you being dragged in front of a judge. It's good to know that private landlords are safe from discrimination.

Well unfortunately this is not true.. One Property Hawk regular Kevin makes the point in relation to the Local Housing Allowance changes that:

"What hasn't been mentioned is this only affects tenants in the PRS. Housing associations and local authority housing tenants aren't affected.

So yet another nobbling to private landlords. Seems we are singled out in the rental market for special treatment. Some times it feels like victimisation. Aren't there laws on that?"

Again it looks like the State looks after their own and private landlords are left to fend for themselves!

Landlord insurance - are you fully covered?

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Monday, December 12, 2011

RICS sees rising yields

The RICS produce some strange survey metrics resulting from asking a panel of surveyors on their opinion on a range of topics affecting the lettings market.

In their latest covering the three months to October, 15% more chartered surveyors reported rental yields rose rather than fell. This is the seventh consecutive quarter that yields have increased and reflects the imbalance between rental demand and supply which is continuing to push rents higher.

Turning to rental prices, 19% more surveyors reported rents rose rather than fell, but the pace of growth was more moderate than earlier in the year.
Reference my tenants for less
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Saturday, December 10, 2011

Landlords need to be sharp

Landlords it's a jungle out there!

My new tenants have just moved into my terrace house buy-to-let. The boiler - a Worcester 24i fires up and produces hot water but no heat in the radiators.

A call to the my regular plumber. His subsequent diagnosis was that the PCB had gone. No surprise there. It's a common problem with the 24i. He then gave me a quote for the replacement £340. A lot cheaper than replacing the entire boiler.

"Ok go ahead and do it"

As soon as I came off the phone I thought £340 that's a lot. I checked a recent article. Then it was on the internet and I found a site theheatexchange and the same part was available at £125 online direct from Worcester.

It's a jungle out there - stay sharp!

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- professional rates

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Thursday, December 08, 2011

Property price twitter - props

Potential property price pitfalls peter on precariously positioned props.

Saving for a deposit will take 31 years - Mail

Housing market props could soon collapse - Moneyweek

North south divide ever wider - This is Money
House prices fall 0.9 percent in November - Guardian

House price slides report Halifax - Telegraph
House price confidence flags - This is Money

See all the property price tweets

Discounted landlord insurance from Alan Boswell

DPS makes repayment improvements

The Deposit Protection Service (The DPS) has made some long needed improvements to it's website and has added an enhanced SMS service.

The most important aspect for me is that tenants will be able to request their repayment ID reminder and get their deposits returned from their phone. Lets face it now we all live on our smartphone. I don't know what I do without my iphone.

Kevin Firth, director of The DPS said: “Whilst repaying deposits only takes two days once we have agreement from both parties, the biggest barrier is misplaced repayment IDs by both tenants and landlords each month – without these, they cannot start or complete the deposit repayment process.”

“Our new SMS service is the fastest way for tenants to receive repayment ID reminders to claim back their deposits.”

The DPS introduced the SMS service last year to notify landlords and tenants of key deposit protection milestones to encourage faster deposit repayment.

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Wednesday, December 07, 2011

BTL mortgages - most popular

Max LTVInitial RateTermCompletion feeBooking feeIncentivesOverall Cost for Comparison
85%5.99% Fixed2 Years1%£130.00No6.6% APR
80%5.49% FixedJan 31 2014 2.5%£0.00Refund of valuation to a maximum of £500 and free legals for remortgages only.5.8% APR
80%4.99% Disc.Tracker2 Years£2995£0.00Refund of valuation to a maximum of £500 and free legals for remortgages only.5.7% APR
75%3.74% Disc.Tracker2 Years£1999£250.00No5.4% APR
75%4.19% Fixed2 Years2.5%£130.00No6.6% APR
70%4.25% Disc.Tracker2 Years0%£199.00Free valuation up to £335 for purchases and remortgages and free legals on remortgages only.6% APR
65%4.5% Tracker2 Years2%£150.00No5.2% APR
65%3.99% FixedSep 30 2013 £1295£250.00No5.5% APR
60%2.99% FixedOct 31 2013 £2495£250.00No5.2% APR
60%4.99% Fixed2 Years2.5%£130.00No6.8% APR

IMPORTANT! Due to current market conditions, lenders are withdrawing and replacing products with little or no notice.

Please check our website regularly to see the most up-to-date products available.
Tel: 029 2069 5446

Your home may be repossessed if you do not keep up repayments on your mortgages.
The Financial Services Authority does not regulate some forms of mortgage.

Bookmark and Share

Warning to Landlords of HMOs

I recently wrote a blog advising landlords of the requirements if you have a property that is classed as a house in multiple occupation (HMO).

I have just come across a Court Judgment in which a landlord ignored the planning rules, he converted 3 properties into 16 rooms to let, charging £800 per room per month.

At Kingston Crown Court the landlord was fined £21,000 for not complying with planning requirements, had rent in the sum of £112,500 confiscated and was ordered to pay costs in the sum of £9,973.

If you are unsure whether your HMO property complies with the planning regulations contact your local authority.

If you would like any further advice about HMOs or any other landlord legal advice please either email me at rbrough@fidler.co.uk or telephone on 01623 448331.

Rebecca

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Cashflow vs Profit & Loss

I've had a recent enquiry from one landlord using our property management software who wanted to do a profit and loss account for each property.

I emailed to explain that our software doesn't do this. There is a reason.

Commercial property companies do have to prepare annual accounts and part of this is their profit and loss statement. As we all know any property business involves two aspects. The revenue and capital. The former relates to the net outcome of revenue and outgoings and is generally reflected by the cashflow. The latter relates to the capital value of the property investment. As most residential landlords are only concerned with this aspect of their property investment when they sell or possibly remortgage their property we have not put a great deal of store on a profit or loss feature. Should we have done?

The other reason is that for tax purposes the HMRC view the entire property portfolio as a landords letting business and don't concern themselves with separate rental units.

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Tuesday, December 06, 2011

My tenants are hassling me!

Generally, I'm one of the lucky landlords. Reasonable tenants. No major tenant arrears (so far...I am keeping everything crossed as I write this!)

However, despite this apparent trouble and care free relationship with my tenants and the buy-to-let portfolio I have notice recently I'm getting a steady stream of small niggling issues.

The result.....my tenants are hassling me!

Could it be my middle aged disposition or are tenants getting more demanding?

On the 'TO DO" LIST this week.

1. A tenant who is still insisting she needs her full quota of 4 thousand channels available on Freeview ( a new digital aerial!)
2. Another tenant who keeps having blockage issues with his upstairs sink (a single man living on his own - best not think too much about this!)
3. A new tenant couple who have sent me an essay of an email pointing out things that need doing (in a very nice way).

I did finally get one of my tenants deposits returned from the Deposit Protection Service. RESULT and despite my earlier frustrations.

There is only one thing for it. Practice my yoga breathing. Rise above it and work my way the through the list and hope next week it will be shorter!

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Monday, December 05, 2011

Landlords are not architects

"The design seems woolly."
Landlords in Manchester are facing fines for extensions to student properties in the Fallowfield area.

Twenty properties in three streets in the student area have had UPVC box extensions bolted on the rear at first floor level. The craze hasn't gone down too well with the local planners who are now threatening fines of £20,000 a property if the architectural zits aren't popped.

I'm not sure what Kevin Mccloud would say, but in terms of aesthetics I'm with the planners. It's dangerous when landlords start to knock up bright ideas on the back of beer mats with their mates.

Check out the photo and more of the story here

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Fixed rate BTL mortgages

The FT evaluates the savings to be made by landlords taking out flat fee BTL mortgages avoiding the costly percentage fee products.

The Godiva Mortgages offers a 3.29 per cent on a 65 per cent LTV with a fee of £1,249.

There is even a arrangement fee free mortgage from Principality Building Society on a two-year tracker at 3.89 per centon a 6o per cent LTV.

Read FT article here

Visit Property Hawk BTL mortgage search to find these and other deals


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Seasonal rents move down

The seasonal fall in average rents is well under way with average rent falling towards the £600 pcm mark after peaking at just over £615 in October according to the Rentindex.

Landlords should not worry though. This reflects the seasonal slump in rent levels that continues from late October through to March before rents pick up again in April.

Studying the long-term graph shows that rents are still on an upward trend.

The moral of the story is if you are going to relet or propose a rent increase do it from July to October. If you do it then; on average that works out at an additional £20 pcm or over 3% more per month on the average monthly rent. From peak to trough the seasonal variation is more like £35. Not to be sniffed at with a seasonal differential from peak to trough of almost 6% pcm.

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Saturday, December 03, 2011

Property Investment Gurus

Any aspiring property investor who might think that property investment may be a passport to unlimited riches and wealth should watch this BBC program on Money. Fascinating in it's coverage of the American evangelical approach to property investing.

What is interesting is how much money these Gurus make from preaching as a posed to investing?

Like a modern day church. The industry thrives on exploiting the basic human frailties of: greed, insecurity, need for a purpose.

As always the church and the preacher seems to get rich when the vast majority of the congregation stay materially poor but maybe 'spiritually enriched'!

My advice - go do it yourself and leave the flock to their own devices.

Mortgage Search - finance my investment
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Thursday, December 01, 2011

Referencing tenants

From the landlords point of view what you want is a long term tenant who treats the property as if they owned it. There is no way to be 100% sure of your tenant before they move in, but you can greatly increase your chances of getting it right with a few simple checks.


Ask for last three Payslips and / or Employer ref

a) Call the employer and confirm details - but get the number from the phone book or website – so you are not just calling their friend in the pub.

Get 3 Months Bank Statements and look for

a) Spending habits

b) Confirm their address

c) Confirm income and match payments with pay slips

Ask for both the current and prior landlord details 

a) Check the landlords details via Land Registry website (£4 well spent) to make sure you are talking to the right person - Just be aware the current landlord may be trying to get rid of them. So don’t put a lot of trust in these references, but still worth doing.

Do a Credit check on them – (a google search will bring up a number of providers) 
a) Check for County Court Judgments?

b) Listed on electoral roll at the last address?

c) Do they use any other names?



Get copies of their Id

a) Photocopy of driving license or passport - compare with original, are they really that person?

b) NI number

c) Google their name? Were they in the news? Search Facebook.

d) If they drove car what is the reg. number?
e) Get next of kin details.

Be extra careful….

a) If you have a group of young couple or single male renting a large house, take extra care as they may be looking to grow drugs.

b) Groups of males on average tend to be more of an issue.

c) Do not accept cheques (especially from overseas) as the funds can appear clear in your account but your bank can take the funds back up to six months later.
d) Have they given notice? A danger sign is if they say they don’t need to give notice or the notice period is zero.
e) When doing the viewing, ask questions, are the answers consistent and make sense?
f) Groups with females tend to be more stable.



And don’t be rushed

a) Do all of the checks – if the tenant is saying I need to move in now and is really pushing to move in quickly without providing all of the paperwork – view this as a danger sign.

a) Can take over 9 months to evict tenants

If you are a little unsure of your tenant you can ask for a guarantor and get them to sign a deed of guarantee in front of you. (other wise you can get a cases where the guarantor will say ‘that is not my signature’) Also get a copy of the guarantors ID, bank statements and land registry deeds of the property they own.

So take your time and do it correctly. It can be temping to cut a corners but the extra work done upfront can save many hours of rent chasing and heartache.

I hope this has been useful. Tulloch Priest

Priest Properties is one of the few letting agents in Nottingham who do the referencing in house instead of outsourcing it.

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