Can anyone recommend...?

Discussion in 'Finance, Property, Law' started by Hells_Heels, Jan 14, 2010.

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  1. A decent lettings agent?

    I part own a house that isn't worth selling, so we've decided to let it instead. Due to the fact that I'm hopefully joining up this year, (and co-owner is already in) the location of the property and likelihood of either of us living there is next to nothing for the foreseeable.

    Can anyone recommend/warn us off a lettings agency or offer any advice?

    At present I'm looking at the Northwood UK option as it seems to be the least hassle

    http://www.northwooduk.com/guaranteed-rent-52-weeks-of-the-year.html

    (Sorry, unsure how to do a proper link!)

    The figures they've quoted are £500 pcm rental, giving us £360 pcm for 11 months and £180 for one month due to fees etc. This basically guarantees us that we'll get some money even if it's empty, which does appeal. Have considered doing the DIY option but as we're new to this I thought this comes with least hassle?

    As it's some distance from each of us, it's not entirely practical for us to keep popping back for any repairs, but equally I'm not sure that I'd feel comfortable leaving a letting agent with a blank chequebook, and with that in mind the non-negotiable issue would be that I arrange any repairs.

    Thanks for any suggestions.

    HH
     
  2. I own a couple of properties in the UK which are rented out for me by my accountant. The only advice I can give you is not to try to do it yourself, as being a landlord these days is not for the faint hearted. For example a recent change in the law means that people on benefits now get their rent allowance paid to them directly by the local council or whoever. This means that for some, if there is choice between going to the pub and paying the rent, the landlord loses out. Getting rent defaulters out of your house can be a nightmare if you dont have a cast iron contract with the tennant and even if you have, the process can take months unless you take exactly the right steps. So do it through an agent and make sure that your contract with the agent is water tight. I strongly suggest that you get a solicitor to assist you with the contracting.
     
  3. As eod has said it already,all i can do is reiterate the two most important things. It is a nightmare trying to remove those that think your property is their rent free accommodation,and,as you will be away,you dont want that hassle.The main point to that is to find a contract law solicitor. Use the solicitor to draw up a watertight contract with a well-recommended letting agent.
    Many letting agents will have their own contracts,but these invariably say they will collect your money,but do bugger all else.
    If you already know a few tradesmen who can do repair work while you are away,then you have a slight headstart.
    Good luck fella,with your property empire and the mob.
     
  4. I agree whole heartedly.

    HH, you and your co-owner have careers to follow and as you will be posted all over the place neither of you will have the time or the inclination to get involved in the detail. To take it on yourselves would be very foolhardy.

    Letting agents have far more experience in judging potential tenants than you have so there is less risk of getting a lousy one.

    Furthermore, they will administer the property for you – fix the plumbing etc – and actually market the property for you – ads in newspapers, website or match your property with someone already on their books who wants to rent.

    Don’t forget also that it is against the law for a tenant’s deposit to be held by the landlord so you are going to have to find a third party to do this for you. You could use a solicitor but they never come cheap however simple the task.

    Regarding getting a solicitor to produce a contract, that is probably a good idea especially as you will be involved in other things and you need the comfort.

    As for using your own contractors to maintain the property, I don't fully agree that that is a good idea. Someone has to be on hand to make sure they do the job which is damn difficult if you are not close to the property.

    Good fortune.
     
  5. BiscuitsAB

    BiscuitsAB LE Moderator

    Are you 100% on that one mate?
     
  6. I believe it is the case, although now that you question me I have a doubt so I am happy to be corrected.
     
  7. The deposit has to be deposited into savings so that it can earn!!
     
  8. BiscuitsAB

    BiscuitsAB LE Moderator

    well bugger off and find out man :D my land lord booted the agent and they gave him the deposit to hold, I was most dischuffed. If its Verbotten I will be having words :wink:
     
  9. Which presumably excludes the landlord holding it, so it has to go into escrow or something similar to a solicitor's client account where it can earn interest.
     
  10. Yes, however, if he holds it in a bank to earn interest, the account will be in his name or his companies name, consequently he still holds the cash in some form.
     
  11. Thanks for the replies folks, your input is appreciated.

    I'm currently renting a flat, the deposit was put into some scheme or other that is definitely a legal requirement if commencing an AST. After the initial 6 month period was up, the Letting Agent wrote to us informing us that the deposit was to be taken out of the scheme and passed to the LL to hold. Oh no you don't I said. And it stayed where it was. The only way I know to get round this, as a friend has, is to charge 2 months' rent up front instead of a deposit, that way you can do what you like with the dosh and they're always ahead with the rent.

    I must admit, I'm leaning towards the Northwood option I linked to, I have to say it certainly appears to be the easiest option, although I hadn't considered that we'd need our own soliticitor, the whole idea of the guaranteed rent thing is that you'll get paid whether there is anyone in or not, they deal with everything but the negative is you get a lesser return, which in our case won't cover the mortgage, leaving us with a small amoutn to make up ourselves.

    Two more points - do I have to declare anything to HMRC if it's not turning a profit? And also, will the LA insist on having proof of consent? I've been told that you're 'meant' to have it but that the BS won't check and many don't bother with it?

    In honesty I'd love to get rid of the place but that's just not an option right now unfortunately. The house is the result of a breakup (albeit one on good terms) so for the time being we're stuck with it. That'll serve as a lesson to anyone that opts for mortgage and sensible spending over beer and credit cards!

    HH

    Edited for drunk-like spelling
     
  12. I deal only in residential sales and consultancy work but have a good few contacts in the lettings world. I haven't come across the firm you mention but can offer you this advice for what its worth:

    1. Make sure that whichever agent you choose is a member of a regulated and approved scheme such as ARLA
    2. DON'T assume that the agent who promises the highest rent and the cheapest fees is the best one for you. Its an easytrap to fall into (and many do!) :roll:
    3. Don't be afraid to try and haggle BUT, you tend to get what you pay for and if you have a good feeling about a certain agent then trust your judgement.

    Good luck :)
     
  13. udipur

    udipur LE Book Reviewer

    I let my flat last year through an agent who basically charged me 8% (all asked 10% and I haggled) to find me a tenant, check him out (a lot simpler than they would have you believe) and collect the rent. To maintain the flat would have cost 6% more but since I live near I took it on.

    We are moving away soon so we will have an agent to manage it. I will be checking the level of each of the agent's service e.g. if my tenants have a flap at the weekend there is someone to help.

    If you are letting as well through the agent there is a nasty little clause that has recently become grey in terms of legality. They always ask for a further 5% of any rent after the first year for doing little if your tenant stays in. The High Court judged Foxtons to be unreasonable because they implemented this plus a mandatory commission if the property was sold during the tenancy. Get your solicitor to protect you!

    In terms of preparing any property for rental, you will need an environmental assessment done as well as a gas safety certificate. It is worth getting the electrics certified as well. Corgi registered plumbers are a good starting point to get them.

    The link by vanman is perfect and I use the TDS version - free to me and they keep the interest. The other two charge £70 and I would get the interest. Current best saving is 3.01% with terms (http://www.fool.co.uk/savings/compare-savings-accounts.aspx). Therefore you would need £2030+ in deposit to get your £70 back and be in the black.

    Yes you do need to declare this as income to HMRC. You will have certain allowable expenses which can be written off against your taxes but it is only the interest which is tax free, not the capital repayment part. Therefore you might want to consider changing your mortgage to interest only. Take some advice from a decent accountant.

    Hope this helps and good luck in not becoming the next Rachman.
     
  14. Don't charge a deposit, call it an arrangement fee (one months rent) although it's now non refundable. Get the DHSS tenant to open an account, use your signature on the documents and get the rent paid into it, you get the cards and cheque book, write to the bank with a change of address so you get the statements too. The doley tenant won't care.