Who should you consult before letting your property?
Before you can let your property, you need to consult a number of parties:
- Your mortgage lender – your lender may ask that you let your property on an Assured Shorthold basis
- Your insurance company – if you don’t let your insurance company know that you have let your property, you may not be covered in the event of damage, fire or theft in the property
- Your freeholder (if you have one) – important if you wish to let a leasehold flat, for example.
You may also find it useful to get advice from a ‘Solicitor’ or an ‘Accountant’.
Identifying your Prospective Tenant
When choosing the decor, the place to start is with the prospective tenant that you are trying to attract. A one-bedroom flat in a smart city centre development is likely to appeal to a youngish tenant. Such a person will probably prefer clean light modern furniture to heavy antiques and clean white and pastel shades to heavy flock wallpaper and patterned carpets. You should decorate accordingly.
A big Victorian house in a university town is likely to appeal to students. They might be intimidated by white carpets and sofas and may reject such a property for fear of future arguments over damage.
Tenants from overseas, particularly Americans, are famous for demanding power showers and the latest fridges, freezers and washing machines. A good letting agent will be able to give advice on what will appeal to tenants in your local area but the place to start must be to visualise the tenant that you have in mind.
Decorating Your Property to Let
In order to appeal to as many prospective tenants as possible, it is usually best to stick to whites and pastel colours. However, when decorating an investment property it is important to decorate with durability in mind. Emulsion is easier to patch up than wallpaper. Patterned carpets show the dirt less than plain ones. Careful choice of decor will help to prevent you becoming embroiled in lengthy arguments about the cost of repairs.
In order to let easily most properties will need a modern kitchen and bathroom. If you are changing a bathroom it is usually best to stick to white sanitary ware in a durable finish. Plastic scratches easily. Enamel is easily damaged by the wrong cleaning materials. Kitchens should be plain and hardwearing. Slate or tiled work tops are much more durable than wood or Formica.
- Don’t get personal. Stick to neutral colours that will go with anything. For example, a red sofa might not match a green carpet. However, all colours look good on beige.
- Stick to a common theme on all your properties, e.g. magnolia walls, white ceiling, white six panel doors etc.
- Carpets – light beige looks great when clean. Light colours make rooms look lighter, brighter and bigger. They also encourage cleanliness and are easy to justify cleaning when a tenant vacates. Look for felt backed bleach cleanable carpets which cost around Ł5.99 per metre and do not require underlay. Replace carpets every 3-5 years and get carpets cleaned every time a tenant moves out. You could consider recovering the cost from the tenant’s damage deposit.
The external view
This is the first view your potential tenants will have of your property, so you should focus on optimising its appearance.
- Tidy up the front and back garden (weed, trim hedges, add some new plants if necessary, clear any dead or unsightly plants, mow and fix any damaged lawn)
- Repair cracks, holes or blemishes in the driveway or walls
- Give the window frames and door a lick of paint if they need it
- Make sure the house number is clearly visible
- Keep rubbish and rubbish bins out of sight.
The majority of landlords now offer their properties on an unfurnished basis. There are two reasons for this. The first is that the cost of furnishing a property is often not reflected in the additional rent received . The second is that recent legislation has placed heavy burdens on landlords. For example, all furniture in a rented property now has to comply with modem fire regulations.
However, certain types of property, such as student properties, will not attract a tenant unless they are furnished. A good agent should be able to advise you on whether your property needs to be furnished and the likely rent that it will command on a furnished versus unfurnished basis. However, my advice in most cases would be to offer your property unfurnished if possible. You will however need to provide white goods, i.e. fridges, freezers, washing machines, dishwashers, cookers, etc. These are quite expensive and awkward for tenants to transport and most tenants expect them to be provided. If you are supplying electrical goods you will need to have them safety tested once a year.
For luxury properties different rules apply. Very expensive properties, particularly those in central London , are often offered on a fully furnished basis and command returns that justify this. If you are letting such a property you need the advice of a specialist letting agent.
The cost of letting your property
While your thoughts may be leaning towards how much you can make by letting your property, it is important that you consider and budget for the costs involved, too. You should budget for the following costs:
- Any monthly mortgage repayments owed on the property
- Any expenses involved in bringing the property up to the required standards, both physically and in terms of the regulatory safety standards of furniture, utility equipment and appliances
- Furniture and furnishings (if required)
- Solicitor’s fees
- Insurance fees
- Contingency budget for ad hoc repairs and maintenance.
Plan carefully and make sure you always have access to funds to make essential repairs if and when required. It will put you in a much better position to retain a satisfied tenant.
A pre-tenancy checklist should help you make sure you’ve ticked all the right boxes before you make the next step in letting your property.
- Update your insurance to take into account that your property is going to be let
- Get the requisite permission from your mortgage lender
- Obtain approval from the council’s planning office (if you plan to make structural alterations to the property or change the property’s use)
- Inform the council’s Environmental Health Department if you plan on letting as a house in multiple occupation (HMO)
- Make sure all furniture and furnishings comply with the latest fire regulations
- Ensure that all gas appliances and equipment have been serviced by a gas safe register (formerly Corgi) engineer and that safety records are kept in a safe place
- Make sure that all electrical wiring has been checked and safety approved by a qualified electrician
- Inform the Council Tax department and utility suppliers that the property will be let (relevant if you plan on being a non-resident of a self-contained property).