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  • In the Spotlight

    Smart Landlord Guide 2019



    Property Tribes is celebrating its 10th anniversary with the publication of our “Smart Landlord 2019 Guide”.

    This has been produced in association, and with the input of John Howard, property investor and developer with over 4 decades of experience.

    Property Tribes has been championing and promoting the concept of the "smart landlord” since its inception in February 2009, as we believe that smart landlords are the ones who will survive and thrive despite the many challenges facing the private rented sector.

    Just as importantly, smart landlords realise that they are a “service provider” to their tenants and are legally obligated to provide a safe and compliant home.  Therefore tenants who let from smart landlords will have a better experience of renting and ultimately smart landlords will be instrumental in raising standards in the PRS.

    You've heard of smart phones, smart highways, smart meters ... well, the idea of a smart landlord is based on the same concept.

    Smart things are adaptive to change, problem solving and always seeking out efficiencies to operate more smoothly and the smart landlord is no different.

    The other quality that sets smart landlords apart is that they put their tenant’s well being at the very heart of everything they do.

    Here are the top 10 traits of a smart landlord which we will be bringing to the fore throughout this campaign:

    >  Adapts to change and actively seeks out the best intel to help them adjust to change.

    >  Treats their property portfolio as a business.

    >  Operates in "prevention" mode rather than "cure" mode to mitigate risk.

    >  When problems do arise, actively seeks to resolve them immediately, rather than allowing them to escalate (which causes additional stress and expense).

    >  Regularly reviews and audits their business/portfolio to ensure they are operating efficiently and to maximum performance.

    >  Seeks out the most reputable and trusted products and services to help them move forwards.

    >  Seeks out the most trusted and reputable professionals to work with.

    >  Is fully networked in the industry and makes a point of networking with other landlords and property professionals at both on-line and at off-line events.

    >  Makes it their business to be an expert at due diligence and research.

    >  Wants to constantly learn and grow and become a smarter landlord by taking sustained and intelligent action on a daily basis.

    John Howard joins us in this video to launch the guide:


    For the “Smart Landlord 2019 Guide”, we have put together a selection of top tips that we believe will help smart landlords be even smarter.

    1.  Boiler - ‎Install an 'A' rated gas boiler with a long warranty. Ideally a minimum of 10 years from Ideal or a similar manufacturer and with immersion. Therefore the tenants will always have hot water, even if the boiler breaks down.

    2.  Use smoke alarms with a minimum of 10 year battery warranty.

    3.  Purchase appliances/white goods with a 5 year parts and labour warranty.  This means the landlord is guaranteed not to have any further expenses for 5 years.

    4.   Take out a rent guarantee add-on to your landlord insurance.  This protects you if your tenant goes into arrears.

    *Property Tribes insurance partner, Alan Boswell Group, offer all forms of landlord and property insurance, including RGI.

    5.   Stay ahead of the market by understanding your tenants need - such as providing super fast broadband and allowing them to keep a pet.

    6.  Treat tenants as customers and think about customer “experience” not just customer “service”.

    8.  Listen to their needs and make their tenancy enjoyable.

    9   Exceed tenants' expectations.

    10. Focus on your niche.  Understand your client/tenant profile.

    11. Keep an eye on your numbers at all times to protect your margins.

    12.  At the start of the tenancy, educate your tenants about ventilation of the property to ensure that damp and mould do not form.

    13.  At the start of the tenancy, show the tenant where the stop-cock is, so that they can turn the water off if there is a burst pipe.

    14.  Be proactive about maintenance and pre-empt problems, as this ultimately reduces costs.

    15.  The best tenant isn't necessarily the one who will pay the most rent.  Rigorous tenant referencing will mitigate the risk of taking on a rogue tenant but also add your “gut instinct” into the mix as it will guide you!

    16.  Having a chat and a cup of tea with the tenant reveals small issues that can easily be rectified before they escalate.

    17.  Thoroughly understand the cost of expanding your portfolio - taking into account such costs as Section 24, 3% stamp duty, and acquisition and legal fees.

    18.  Landlords need a clear set of values, business plan, and strategy.  Start with your end goal in mind and work backwards from there.  Regularly review and audit your portfolio and tweak your strategy as necessary to remain on track.

    19.  Landlords need to be on top of the finances and work closely with a reputable broker who understands their property ambitions.

    20.  Stay on top of regulation by joining a Landlord Association.  Getting accredited shows you are serious.

    21.  Network with other landlords for knowledge and contacts and to be exposed to what others are doing, as this in turn helps you see a way forward.

    22.  Take advantage of new technologies to help you work smarter - such as heating controls and tenant management software.  Tenants are digitally minded and expect a digital experience.

    23.  Ascertain at the start of the tenancy your tenant’s preference for contacting them - whether that be via email, text, phone call, or whats app.

    24.  Put your prospective tenant’s name into google as part of your due diligence checks.  You may ascertain some useful information about intangible aspects of their lifestyle that will not be found via traditional referencing - such as they are a party animal, they play the drums, or they own a 20 foot python snake that they didn’t mention!

    25.  If planning up-grades for high value items like carpets, furniture, kitchens, and bathrooms, plan to buy on “Black Friday” in November, where you will be able to make up to 40% savings on both products and having them installed.

    26.  Landlords should put a price on their own time and should use a reputable lettings agent if they have a busy day job.

    27.  Landlords should research all the latest Government consultations and contribute to them, as these help shape the future for private sector landlords.

    28.  Landlords baulk at spending money - the smart landlord will recognise the value of paying for professional services, and also ensure that suppliers are properly regulated and accredited, and, in necessary, insured, for the work they are undertaking.

    29.  Landlords need to invest in maintenance in order to attract good quality tenants.  There should be a regular programme of up-grades approximately every 5 to 8 years.

    30.  Landlords will have to raise their game in order to compete with Build to Rent operators, so, if they arise in your area, go and visit the scheme and see what they are offering tenants and how you can improve your offering.

    31.  Always get a tenant’s “next of kin” details.  This can be a line of enquiry if they stop paying the rent and/or stop communicating, and also if they are taken ill or have some kind of accident.

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    32.  When considering any property investment be it to resell or to retain you must always have three possible options at your disposal

    1. On purchasing of the property, being able to re-sell it immediately at a profit.

    2. To refurbish the property and be able to sell it on at a profit.

    3. To refurbish it, let it , and refinance it allowing you to re-cycle a significant portion of your original cash input, in order to purchase another property

    If you can’t do all three of these then you need to question whether you should be buying the property in the first place!

    And remember it doesn’t matter how successful you’ve been in the past you are only as good as your next deal!   - via John Howard.

    See - My 3 unbreakable property buying rules
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    33.  When looking at a prospective investment property, always pop next door to speak to the neighbours if you can.  Neighbours are a wealth of information about the property’s history, the area, and the local community.  They can also be your eyes and ears if you live remotely.

    ____________________________________________________

    34.  Look at sold house prices to see if there are frequent changes of ownership in nearby properties and the interior condition in photographs where they exist.

    Look at the external condition of the properties and the condition of the cars.

    Google an address to see what comes up, scroll past all the house sale data, this has occasionally revealed an interesting result.

    -  Via Property Tribes member SteveO.

    _____________________________________________________

    35.  If you have your property managed, do not go for the cheapest management/lettings company. Research and choose a successful one that has also voluntarily committed to professional standards by joining a trade body such as ARLA, SAFEagent, or RICS.

    A good property management company should get you more rent than you can personally and help pay for themselves, not to mention that lettings and management fees are tax deductible!

    See - How to vet a lettings agent ... 12 questions to ask

    _________________________________________________________

    36.  Auction tips

    Always ask the Auctioneer why the property is in the Auction.

    Go next door and ask the neighbour for the history of the property.

    Always assume there is a problem with the property and endeavour to find out what that problem is.

    Make sure whatever the problem with the property is it is something you are able to solve.

    Don’t tell someone what you’re going to bid at the auction.

    Don’t bid on the phone if you can help it - always be present in the room.

    If you’re selling at the auction always try and make sure you can be there.

    Don’t  purchase a property at auction that you have not looked at inside.

    Don’t  purchase a property at auction if you have not got all the money already arranged ready for completion!

    Don’t buy a property that has structural problems without seeing a structural report on how to put the problem right.

    Don’t  buy a property that you haven’t read and understood the legal pack on or taken advice from your solicitor.

    Make sure you can insure the property after you have signed the contract and that that is not un-insurable or un-mortgageable.

    Always get a price from a builder to put the work right prior to the auction.

    Never believe what other people say about the auction lot you’re interested it - make your own opinion and stick to it.

    Always make your own mind up what the property is worth once modernised . Take a guide from the Estate Agents but you make final decision.

    If for any reason you can’t complete the purchase, don’t leave it till the last minute before you tell the auctioneer. Tell them soon as you know there is a problem and try and negotiate a longer completion so you can are able to eventually complete.

    Always go back for second internal look at the property make sure you feel the same about it second time round.

    If the property requires planning permission to develop always speak to a planning officer at the Local Authority prior to the Auction.

    Ask the Auctioneer how many Legal Packs have been downloaded on the Lot you are interested in you can then gauge then how much interest there is in it .

    Make sure you’re not just buying the property for the sake of it and that there is a really decent profit in it whether you’re letting or selling it on.

    Always stand at the side of the Auction so you can see who else is bidding . 

    Always set yourself a limit on what your going to pay and stick to it .

    Never get carried away and keep Bidding just because someone else is , let them have it if it’s over your budget.

    There’s always another Auction and always another deal !



    _________________________________________________________ 

    37.  Top tips discussions on Property Tribes for creating longer tenancies and avoiding voids:

    My property won't let! 6 tips to get it let! 

    12 tips to ensure good tenants stay 

    TIPs: Six tips for landlords to reduce void rental periods

    Six cheap and quick "fixes" to improve your property's rental prospects

    Offer a Zero Deposit option.  Property Tribes is partnered with FlatFair for this.

    38.  Make sure you use the correct SIC code when registering your limited company for property activity.

    There are two main SIC codes you should use when setting up a limited company or SPV and they are:

    68100    Buying and selling of own real estate

    68209    Other letting and operating of own or leased real estate

    Property SIC codes - which to use?

    39.  Use google street view to check out an area surrounding a property before you invest time and transport costs in going to visit it.




    40.    Always put your offers in writing!  This makes you look professional and it also makes your offer more memorable.

    Take advantage of Vanessa's famous template letter - Put it in writing! Offer Letter - Template 

    41.  If you are going to seek to refinance after refurbishment of a property, and want to improve your chances of getting the valuation you need, then be sure to document the refurb with photographs and also create a schedule of all monies spent to add value to the property.  You can then present this information to the valuer to assist with his decision.

    42.  The smart landlord is always looking how to improve their bottom line.  If your fixed rate BTL mortgage period is coming to an end, check whether or not your lender has an on-line mortgage switcher.  If they do, it is very quick and easy to log in and change to a new product within a matter of a few minutes.  This could save you several hundred pounds per month, so well worth doing!

    43.  Think carefully before selling a property!  It is not necessary to sell a property to get at the equity within it.  You can consider remortgaging, a further advance, or a second charge, provided that loan to values permit equity release.

    There are significant costs and risks in selling a property (especially in the current market conditions where properties are taking up to 7 months to sell and there are big discounts being achieved).

    Selling a property is akin to slaughtering a cow, when you could keep that cow, breed from it (release equity), and continue to milk it. (cash flow), while enjoying potential further capital appreciation over time.

    44.  Always ask tenants for a home-owner guarantor.  This gives you extra security should the tenant stop paying the rent.  It is also someone to speak to if there are problems during the tenancy, such as the tenant shutting down communication.

    45.  In a negotiation, the person who mentions the price first usually loses.  Never mention a price, as it might be less than you were thinking of paying!  Get the person to mention their best price.  It is statistically proven that someone will usually drop a further 5 to 10% from what they claimed was their best price.

    46.  One of the most powerful phrases in negotiation are the seven golden words - "Is that the best you can do?" - followed by silence.

    47.  Always look at a deal or a transaction from every angle to ensure you are not missing something.  A property developer favourite saying is "There is a mug in every deal.  If you cannot see who it is, it is probably you!".

    48.  Keep digital records of everything - monies spent, receipts, invoices, mileage, subscriptions, event fees, etc. and landlord/tenant communications.  These are needed for your tax return or if issues arise with your tenant.

    49.  Cash flow is the lifeblood of a property business and you should actively manage it. Make sure you set up your tenancy agreement to ensure your tenant's rent comes into your account before your mortgage payment goes out to create positive cash flow.

    50.  Make sure you have a "rainy day" cash buffer fund to cover voids, maintenance, repairs, etc.  You cannot leave your tenant without heating or hot water because you cannot afford to replace a boiler, for instance.

    51.  Be organised. Keep a list of all serial numbers for appliances and register them for the guarantee, have a diary or on-line property management system and input all key dates such as gas checks, insurance renewals, boiler service, end of fixed rate mortgage etc.

    52.  Keep a file with contact numbers of tradesmen including those who will respond to emergency call-outs.

    53.  Always pay builders and trades-people promptly.  Firstly, they are often self-employed and its the right thing to do and secondly it assists in building loyalty with them and keeping them on-side should you need them for something urgent.  I also believe in writing positive reviews for trades who have done a good job for you as it assists them in getting more work, and its important to appreciate good service.

    54.  Respond promptly to tenant concerns.  If it is an urgent matter like heating issues in the winter, you should endeavour to get a tradesperson out within 48 hours.  Always respond to the tenant to let them know you have received their communication, and the time-frame you are working to.  Good communication is everything in any business relationship, so be open and transparent, and have empathy with your tenant and understand that a situation may be stressing them out, so bear that in mind.

    55.  Part of your tenant vetting procedure could be to visit your tenant in their current property.  You can then see first hand how they are treating that property.  If they are wanting to move in with a pet, you can also see if the pet has had any impact on the current home.

    56.  Do not hand over any keys to the property until a tenancy agreement has been signed and the first month/week rent in advance and security deposit has been received.

    57.  Use Property Tribes community-generated "Tenant Moving In Check List" to make sure you have everything covered:

    Moving in check list for tenants. 

    58.  You must always visit any potential property to fully understand the area.  There are intangible things that you cannot research on-line.  For instance, is there heavy traffic noise or smells from a nearby factory?  Are there parking problems on the street?  Are other properties in the street well maintained?  Visit at different times of the day and night to get a true picture of the area and what your tenants might experience when they live there.

    59.  Many experienced investors believe that a house is a better buy than a flat.

    10 reasons to buy a house rather than a flat .... EVERY time. 


    60.  If you are purchasing a flat, be sure to check the service charge, ground rents, and if there are any sub-letting charges as you will need to factor these into your calculations.

    61.  Before spending money on expensive training and mentoring, get yourself checked out by a mortgage broker that you qualify for BTL finance (unless of course you are a cash buyer).  To access the most competitive products, you will typically need to have a salary of £25K per annum, own your own home, and have a clean credit rating.  You will also need circa a 25% deposit, stamp duty, legal fees, and other acquisition costs.

    62.  One of the safest and lowest risk ways to get started in property is to buy a property that is already tenanted.
    This gives you income from "day one" of ownership, you can see how the tenant is treating the property, and you can check if the tenant pays the rent on time.  You can also ascertain from the tenant if they are looking to stay long term.

    63.  ALWAYS undertake a photographic (or video) inventory at the start of a tenancy.  This documents the condition of the property at the start and will be important evidence if a dispute arises at the end of the tenancy.  The tenant should sign and date the inventory to confirm that they agree with it.

    64.  Undertake mid-term property inspections - two to three times a year is the recommended frequency.  This allows you to monitor the wear and tear on the property, see if there are any unreported maintenance issues that need dealing with, and also see if there are any problems developing, such as tenant hoarding, or having an unauthorised pet, or there are additional people living at the property who are not on the tenancy agreement.

    Five very good reasons to instigate mid-term property inspections

    65.  Whilst less expensive properties, particularly in the North might appeal for investment purposes, remember that a property costing £50K costs the same to run as a property costing £500K.  Therefore, a low value property with lower value rent could have a whole year's rental profit wiped out if a new boiler is required, for instance.

    66.  It is generally recommended to purchase investment properties within your local area.

    10 reasons to buy investment property within a 10 mile radius of where you live. 

    67.  Rental demand is always the number one metric to research for any prospective investment property.  A theoretical ROI does not pay any bills!  Buying a property at a deep discount is not the be all and end all - it's not a good deal if no one wants to rent it from you.  Check with several local agents as to what demand is like for different property types in the area.  For instance, there may be an over-supply of flats to rent, but an under-supply of family homes available.

    68.  When referencing tenants, be sure to get an application completed by the tenant(s) with the last 3 years residence, with their date of birth, national insurance number and next of kin details.  Their ability to afford the rent is an important consideration and most agents deem that the rent should not be more than 30% of their salary or 40% of their take-home pay.

    69.  Prioritise health and safety up-grades over cosmetic ones.  For instance, if the property needs re-wiring or there is a loose and worn carpet on the stairs, these are more important than a cosmetic up-grade if your budget is not endless.

    70.  Fit a key safe to your rental property with a spare set of keys inside.  This can be accessed via a code.  These keys can be used in an emergency, such as a tenant loses their keys, and they can also be used for trades to gain access to the property if the tenant has agreed for them to do so while they are out.

    71.  Set your rent carefully.  It is better to have 80% of something than 100% of nothing!

    72.  If a tenant appears to have abandoned the property, you need to be very, very careful about re-entering the property and also disposing of any items that they have left behind.


    73.  It is generally agreed by experienced landlords to let a property unfurnished.  A tenant who moves in with a set of furniture is likely more committed to staying long term than a tenant who moves in with only a suitcase.  Any furniture that you do put in the property needs to meet safety standards and you will also be responsible for replacing it - an added expense.

    74.  If you are struggling to rent or sell a property, then there is only EVER one reason, and that is PRICE!

    75.  If you are purchasing a flat, and there is no lift in the building, do not buy an apartment above the second floor.  No one wants to traipse up numerous flights of stairs with shopping, kids, suitcases, etc.

    76.  When viewing potential investments, take a few moments to look up and down the street and see how other property owners have developed or improved their properties.  For instance, you may see loft conversions, or side and/or rear extensions already completed, which means that you should not have problems obtaining planning permission to do the same.

    77.  When looking to force the appreciation of a property, take advantage of Permitted Development Rights which do not require planning permission.

    This means that you don't have the hassle and time delays of going for, and waiting for, planning permission.

    Improvements that can be made under PD:

    • You can extend a detached property by up to 8m at the rear if it is a single storey. 3m if it is a double storey.
    • A single Storey extension can be up to 4 m high to the ridge and eaves, but not higher than the existing building.
    • PD extensions cannot go in front of the build line at the front of the property.
    • It must be of the same or similar material to the rest of the building.
    • 2m extensions should not be closer than 7m away from the rear boundary.
    • Side extensions can be up to half the width of the building, single storey and no more than 4m in height.
    • Build a porch 3m2 or less.
    • Convert and occupy the loft space
    • Install solar panels and satellite dishes.
    • Put in roof lights and dormer windows (not facing the highway.
    • An extension cannot cover more than half of the garden.
    • The property footprint (including outbuildings) can be no more than 50% larger than the property footprint in 1948.

    20 things to do under PDR 

    78.  Fit removable bath panels to baths so that plumbers can access the hot and cold feed and waste if you have any leaks or plumbing issues.

    79.  Install A rated double glazed windows which include trickle vents and request that tenants keep the trickle vents open at all times to improve air flow in the home. This can help reduce condensation.

    80.  Paint the walls with washable paint so that they can be touched up when the walls are scratched or marked.  Wipes are good for removing marks and WD40 can get rid of crayon and pen marks made by kids.

    81.  When viewing a potential investment property consider the following:

    Could you extend?

    Could you transform an ugly exterior?

    Can you create off-road parking?

    Is there potential for a loft conversion?

    Could you remodel?

    Is there scope for further development?

    21 questions to ask at an investment property viewing.

    82.  Take advantage of the many free and low cost resources available to you so that you can learn and grow!

    Directory of all Property Tribes' free guides 

    Best property podcasts? 

    The Property Tribes Essential Book and Reading List 

    83.  Make sure you file your tax returns on time.  There are penalties and interest payable for late filings.

    Paper tax returns need to be filed by 31 October. So, for tax returns relating to the year 6 April 2018 to 5 April 2019, for example, all paper returns should be submitted by 31 October 2019. The deadline for filing online is three months later – 31 January.

    84.  Once you have built a solid portfolio of standard BTLs, that is the time to consider more advanced and higher risk/higher yielding strategies such as HMOs or holiday lets.  Get some experience under your belt first, before attempting more risky strategies.  Otherwise, it is somewhat akin to putting a learner driver in a Ferrari - its likely you will crash!

    85.  Google is your friend.  Whatever you are researching put the name into google and see what comes up. Go beyond page 1.  Dive deeper into lower ranked results and you may be amazed by what comes up.

    86.  Taking some time away from your business to attend property networking events is a great way to keep your knowledge up to date, get some fresh inputs and thinking, and meet your potential business contacts.

    Property Tribes is partnered with the Landlord Investment Show which runs very popular day events around the UK throughout the year.  They are also FREE to attend.

    Find out your nearest show and book your free ticket

    About our sponsor, John Howard

    As mentioned in the video John is a property investor of over 4 decades of experience.  His current development is 150 flats on the waterfront in Ipswich (his home town) which he has undertaken in association with the Government's Homes England scheme. 

    John has decided to share his extensive knowledge through a series of seminars around the UK.

    Find out more and book here.

    This day with John costs £247.00 and you can find a reviews of the course here on Property Tribes.

    John has recently launched his bespoke mentoring programme:

    Launch of John Howard mentoring programme

    John has recently joined Property Tribes as a commercial partner and started sharing his knowledge across our various discussions.  You can find his contributions >>> here.  He also has a fantastic youtube channel sharing tips and insights which is well worth subscribing to.

    We are absolutely delighted to have someone of John's calibre, experience, and reputation as a supporter of the Property Tribes community and don't forget that he also as a book available to purchase.



    You can buy John's book >>> here.

    There is also an audio version of the book available for purchase >>> here.

    You can find out more about John and his property investment world by visiting his website:

    John Howard Property Expert 

    We hope you have enjoyed the "Smart Landlord Guide 2019" and, as mentioned in the video, please feel free to add your own tips!

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    87.  Do not hide cisterns in walls! Or use cheap bath panels that will break. Over time you may need access to the plumbing, make sure it’s accessible and that any panels you use to hide it are robust. - via @landlordvision on twitter.

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