Smarten up your act and reap the re­wards

Rentals spe­cial­ist and sea­soned in­vestor Gra­ham Bates re­veals how to make the most of the mar­ket and be­come a bet­ter land­lord.

Yorkshire Post - Property - - PROPERTY -

LAND­LORDS will look back on 2012 with a mix­ture of op­ti­mism and de­spair.

Op­ti­mism be­cause never be­fore has the pri­vate rented sec­tor en­joyed such buoy­ancy with high de­mand from good qual­ity ten­ants and de­spair be­cause at no time has it been more dif­fi­cult to raise fi­nance to ei­ther keep es­tab­lished res­i­den­tial prop­erty port­fo­lios to­gether or to ex­pand, which frus­trat­ing when the op­por­tu­nity ex­ists to buy bricks and mor­tar in­vest­ments at such low prices.

So what is this new year likely to bring and how can you be­come a more suc­cess­ful land­lord in 2013?

The good news is that the ren­tal mar­ket is ex­pected to re­main ex­tremely busy ev­ery­where.

In my patch, de­mand both in Leeds city cen­tre and its sub­urbs re­mains strong to the ex­tent that we ex­pect de­mand to out­strip sup­ply.

A strong in­come flow is the start­ing point for any land­lord and crit­i­cal both in terms of meet­ing loan re­pay­ments and main­tain­ing the con­di­tion of the prop­erty.

So with all the signs point­ing to the num­ber of prospec­tive ten­ants ex­pected to out­num­ber avail­able prop­er­ties, if you are ex­pe­ri­enc­ing voids (the pe­riod when your prop­erty is va­cant) of more than a few weeks be­tween ten­an­cies, you need to ask a few key ques­tions to help iden­tify and rec­tify the prob­lem:

Is there a prob­lem with the con­di­tion of the prop­erty? If you are not ad­dress­ing small re­pairs, it will start to stick out like a sore thumb and your prop­erty will give the im­pres­sion that it’s not cared for, which is not a good sign for a prospec­tive ten­ant who wants to rent a nice home

Is it well-pre­sented? For ex­am­ple, is the fur­ni­ture or dé­cor shabby? In times when fi­nances are tight, it’s more dif­fi­cult to bite the bul­let and spend money on what may seem to be non-es­sen­tials but ten­ants have high ex­pec­ta­tions and a poorly-pre­sented prop­erty with a shabby sofa or marked walls can be in­stantly off-putting. It can also drive down the ren­tal value so a lit­tle money spent wisely can of­ten reap re­wards.

Do you have the right let­ting agent? How your agent presents your prop­erty is cru­cial so look at their web­site, re­view the pho­tog­ra­phy and ask them for an ac­tiv­ity report – how many view­ings have taken place and what feed­back has been re­ceived? Are they ad­ver­tis­ing your prop­erty on key web por­tals such as Right­move and Zoopla.

Not all agents use sites such as Right­move be­cause of the costs that ap­ply but this is a big dis­ad­van­tage to a land­lord and you shouldn’t hes­i­tate to switch agents who are not fully mar­ket­ing your prop­erty.

Are you ask­ing too much? If you have the right let­ting agent they should have given you sound ad­vice on how much your ren­tal prop­erty is worth per month but some agents will tell you what you want to hear rather than what is real­is­tic and some land­lords have ex­pec­ta­tions that are sim­ply too high.

Price is of­ten a key fac­tor when a prop­erty is stick­ing but it’s equally im­por­tant to max­imise your in­come, so you don’t want to go in too low – the an­swer is to ask your agent to look at com­par­isons with other sim­i­lar avail­able prop­er­ties so you have a real un­der­stand­ing of where the mar­ket is at (re­mem­ber prospec­tive ten­ants are do­ing th­ese com­par­isons them­selves).

For most land­lords, ten­ants should be in plen­ti­ful sup­ply and those look­ing to get onto the buy-to-let lad­der for the first time should not be overly con­cerned about find­ing some­one will­ing to pay the rent, with the caveat be­ing that you need to buy the right prop­erty in the right lo­ca­tion (more of this in fu­ture col­umns).

So what other steps can land­lords take to im­prove their po­si­tion in 2013 and main­tain a suc­cess­ful in­vest­ment strat­egy?

It may sound ob­vi­ous but just as you pe­ri­od­i­cally re­view your per­sonal in­come and ex­pen­di­ture, it’s im­por­tant to do the same for your rented prop­erty. Just like run­ning a busi­ness, you need to an­a­lyse your over­heads to see if there are ar­eas where you can make sav­ings:

If you think you are not get­ting the best mort­gage deal, ask a bro­ker to check out the deals avail­able (es­pe­cially if you have at least 40 per cent eq­uity). Is your agent charg­ing too much – re­mem­ber the cheap­est is rarely the best but you need to en­sure you are get­ting fair value?

Ask an en­ergy bro­ker to see if you can re­duce the cost of util­i­ties (some land­lords of­fer rents in­clu­sive of bills where this is es­pe­cially rel­e­vant).

Other costs to re­view in­clude build­ings in­surance, re­pairs and sup­pli­ers of items such as fur­ni­ture.

Bricks and mor­tar in­vest­ments can be fraught with dif­fi­cul­ties if you don’t man­age the prop­erty well but if you keep your ren­tal prop­erty look­ing good, mon­i­tor ex­pen­di­ture closely and work with an es­tab­lished and cred­i­ble let­ting agent to max­imise your ren­tal in­come, it should turn out as safe as houses.

Gra­ham Bates is chief ex­ec­u­tive of Ed­dis­ons Res­i­den­tial. Ed­dis­ons City Rentals is one of York­shire’s lead­ing let­ting agents. www. ed­dis­ons.com/cityrentals.

IN­STANT AT­TRAC­TION: Pat and Dennis Loft­house fell in love with Church Cliff House and its sea­side lo­ca­tion when they saw it eight years ago. The house has been ren­o­vated and over­looks Fi­ley bay. It has a walled garden and fenced pad­dock and out­build­ings that house garages and store rooms.

OP­POR­TU­NI­TIES: Gra­ham Bates, who has a wealth of ex­pe­ri­ence in res­i­den­tial let­tings, says de­mand will con­tinue to out­strip sup­ply.

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