It’s an important first decision for all new buy to let landlords
Public interest in buy to let property investment has never been higher.
Tumbling mortgage rates, a shortage of housing stock, increased tenant demand, all boosted by the recent liberation of some people’s pensions savings, are continuing to tempt more and more investors into the sector as a way of protecting their financial future.
According to the Council of Mortgage Lenders, private residential buy to let mortgage funding has increased by 11 per cent year on year with nearly 16,000 loans, representing £2.2 billion, issued at the start of 2015.
However, Belvoir, one of the UK’s largest property letting and management specialists, says that new landlords should take a long look before they leap into this booming market – and fully consider the pro’s and cons of either ‘going it alone’, or employing an agent to advise on what can be a daunting process for novice investors.
Phil Pinkney, Director of Belvoir Andover which is part of a national network of over 160 offices, says: “Deciding to manage a property yourself or paying for an agent to do it on your behalf is a big decision.
“Even after taking all the essential first steps, such as researching the local market, identifying the right kind of property, checking its condition, its likely appeal to a particular tenant group and its potential yield or ‘return’ on investment, there is still a lot to consider.
“Landlords need to carefully assess their available time, skills and abilities, so as to ensure the safeguarding of a property and the people who will live in it, and importantly, make the whole process as stress free as possible.”
“Renting out a property for the first time can feel daunting because of the amount of legislation, health and safety considerations and overall commitment to the on-going maintenance and security of your investment.
“Professional agents, recognised and accredited by the UK’s industry bodies, not only have in place a wide range of client protection mechanisms, but a thorough understanding of your local market, technical knowledge of the sector and up to date information on trends and statistics to help you make informed decisions”.
“Fees charged reflect the depth of knowledge, expertise and up to date training required to keep on top of a constantly changing property landscape. When considering the cost of employing an agent you should always be aware of the cost of NOT employing one should things start to go wrong.”
Belvoir says there are three principal points to consider:
Belvoir says there are three principal points to consider:
- Being a ‘do-it -yourself’ landlord means having the time and patience needed to care for your property and its tenants. Would you be able to deal with any issue at a moment’s notice, to the satisfaction of all concerned?
- Do you have the manual and organisational skills to maintain the property to the required standard, or would you need to employ someone to do this for you?
- Are you confident about handling all the legalities? Changes to Landlord and Tenant law are frequent and often complicated. Again, this demands time, research, a thorough understanding and great attention to detail.
- All well-established, reputable agents will offer a range of services to suit the particular circumstances of a landlord client. Landlords may require all of them or just specific ones, following a detailed assessment of the need.
- They can help find, and then screen and reference, suitable tenants. This is an important first step and is often overlooked by ‘DIY’ landlords.
- A thorough knowledge of local property prices, achievable rent levels and investment ‘yields’ will help new landlords to set a realistic, fair and competitive rent for their property.
- An agent’s full inventory check at the start of a tenancy provides a valuable record of the property’s internal ‘assets’ – appliances, furnishings etc. – that can be checked against when the tenant leaves.
- In addition to the legal ‘basics’ of understanding tenancy agreements and deposit legislation, professional agents such as Belvoir are required to have comprehensive, up to date knowledge of rules on gas and electrical safety, energy performance ratings, fire regulations, legal furnishing standards and landlord/tenant insurance matters – to name just a few.
- If property maintenance forms part of your management agreement, an agent will provide round the clock protection in the event of a burst pipe, broken appliance, weather damage or any other problem. They will provide a professional assessment of the cause and or liability for repair and fix the problem on your behalf.
- All landlords have a legal obligation under the Landlord and Tenant Act 1985 to ensure that their property is safe and that repairs are carried out to the correct standard, so quality of workmanship is essential. A professional agent will ensure compliance with these regulations.
- If problems arise during a tenancy – for example slow or non payment of rent – the agent will pursue this on a landlord’s behalf and take any appropriate steps to manage the issue.
Established for 20 years and multi-times winner of the UK property industry’s top awards, Belvoir offers the following advice on the advantages of using a letting agent to guide you through the lettings process:
“When a considerable amount of your own money is put into a buy to let investment, it is critical to understand the advantages, the restrictions and indeed some of the pitfalls involved”.
“It is inevitable that many new landlords’ circumstances and expectations can vary, so we provide an initial free, no obligation meeting to fully explain how we can make the management of your property work, not just for you, but for anyone who chooses to call it their home.”
“Above all, a successful landlord/agency relationship is built on trust, transparency and recognised high standards of professionalism and respect for landlord and tenant clients alike.”
Belvoir is a founder member of the ‘SAFE AGENT’ Kite mark scheme, supported by the independent National Approved Letting Scheme (NALS). This promotes client money protection and provides consumers with a clear message on those agents with whom they should do business.
The company also follows The Property Ombudsman Code of Practice for Letting Agents. Belvoir Andover, established in 1997
If you are interested in entering the residential buy to let market, why not give Phil a call on 01264 366611 or email firstname.lastname@example.org.