Struggling to sell? Why not rent?

One of the main sources of new properties to the rental market over recent months has been from people who can't sell their property for a price they are happy with, so rent it instead. These properties are usually popular with tenants as by their nature, they tend to be family properties in nice areas. As such finding a tenant isn't usually an issue. However if you are an 'accidental landlord' the overall success of letting your property depends to a large extent on your understanding and acceptance of what being a landlord involves.

What do I need to do before I can rent my property?

The vast majority of this will be covered by a competent letting agent when they visit to appraise your property. Getting a couple of ARLA agents round will identify key points that come up again and again – these are the ones that really need your attention.

• Switch your buildings and contents insurance to a Landlord specific policy. Your insurer won't pay out if you haven't told them the property is rented.

• Get the relevant safety certification sorted out for your property. Again a competent agent will assist you with this.

• Sort out any little imperfections that you know exist in the property, and that you put up with yourself – once someone is paying you money to live there, they won't put up with it like you did. Cupboard doors that don't quite close properly are a classic example!

• Think health & safety! A small pond in the garden may have been fine whilst you lived in the house alone, but is not fine if your tenant has 2 small children. You must protect your own interests by dealing with issues such as this.

• Clean it! This isn't always the easiest thing to get across to someone who's lived in a property, but look at it this way – if you pay for a professional clean before the tenant moves in, you can expect the property back with a professional clean done too.

Will I be satisfied with the rental experience?

We find that 'accidental landlords' are often less satisfied with the whole rental experience than people who have bought property specifically as an investment. To an extent this is inevitable as renting the house is not ideally what they wanted to do. To make it work, your expectations need to be realistic:

• Detach yourself! Although you may have lived in the house for 10 years, at the point you rent it you need to make a bit of a mental adjustment – the property is no longer your home and is now a commercial investment! If anything it's someone else's home. The key thing for you is making the investment pay.

• Be flexible. Although you may love your flowery green carpet, this isn't something that will necessarily appeal to a tenant. Don't be offended if your agent politely suggests changing things like this – they only make suggestions like this because they know if will enable them to find YOU a tenant more quickly.

• Accept that a tenant rarely cares for a property quite as well as an owner. You should not expect damage, but you should expect wear and tear. If you rent to a family with young children, spills, scuffs and scrapes are inevitable – this is part and parcel of renting a property. In particular tenants rarely maintain a garden like an owner does – if you've spent the last 20 years developing prize winning flower beds, don't be surprised when the tenant doesn't share your enthusiasm!

• Don't drive by every day and worry! If they don't cut the front garden or clean the front windows quite as often as you did, you can't insist on them doing this, unless they are fundamentally neglecting things. What matters is that the property is returned to you at the end of the tenancy in the same condition it was given, minus reasonable wear and tear.

What does an agent do?

Most 'accidental landlords' choose an agent to manage their property, rather than doing so themselves, as they don't have experience of letting, and don't know much about tenancy law. It's always a good idea to get a couple of different ARLA agents round and listen to what each has to say – in that way you'll get a flavour of what each can offer. Remember that finding a tenant is the easy bit – the skill is in looking after the property on an ongoing basis. You'll find ARLA agents are better geared to do this than estate agents who have opened a lettings department.

Don't make the classic mistake of choosing the cheapest unregulated agent in town. Your rental property is one of the biggest financial commitments you'll make in your life, and you want some assurance firstly it is being properly looked after, and secondly that you have some redress if it isn't. 

If you would like to discuss renting your home, come and see us here at Belvoir. We are situated at 200 Northdown road in Cliftonville. Alternatively give us a ring on 01843 293 293.

Is the West Cliff area of Ramsgate the place to buy a buy to let?

A couple of weeks ago I had a couple pop their head through the doors of my offices on Northdown road. They live in Canterbury, near the Golf course, and wanted to pick my brains on buying their first buy to let property in Thanet. They were particularly interested in the West Cliff area of Ramsgate, particularly around the football ground.

Therefore, I looked at the area around Southwood road. From January this year, 27 properties have been let with 7 more currently on the market at the moment. The average time it is taking to let a property here (the time between first day of marketing and tenant moving in) is 27 days. This is important for investors to know as they should factor this in to their costs as it would be a month without income. As always it is worth taking into consideration the possible capital growth. I used a property in Hebert road as an example. It sold in April this year for £119,000 (am sure would have been more if the kitchen and bathroom had been modern) and in 2004 it was sold for £80,000 giving a capital growth figure of 48.75%. Sticking with this same property, the likely rent would be in the region of £750 giving a gross yield of 7.5%. With such excellent demand from tenants and excellent amenities surrounding this area (easy to reach bus links, less than a mile to the train station and local shops within walking distance) could this be the right area to purchase your next buy to let investment?

If you are considering buying a property for investment in the near future, as I don't sell property, I am always happy to give you my considered opinion on which property to buy (or not as the case may be) to give you what you want from your investment. If you are a landlord, new or old, I am more than happy for you to pop in and see me or email on gavin.horton@belvoirlettings.com

Monoply in Margate. How would you play?

A couple of local landlords and I had a discussion about the property market in Margate, when the subject of risk against returns arose.

All Landlords are different in the way they play the property game. Some landlords prefer to accept a modest yield/return on their investment for an increased certainty of finding a quality tenant. Other Landlords are interested in high returns, with a greater risk with regards to the quality of tenant. Before you start playing, it is a good idea to have a game plan.

For a low risk investment, you could buy property in the areas of Margate which are perceived as being more desireable, such as the Palm Bay estate, where you can achieve annual yields in the region of 4-6%. If you don’t mind a slightly higher risk of void periods or varied quality of tenant, you will more than likely achieve higher yields in the region of 6-8%. The types of properties you would be looking at here would be in the Cliftonville area and generally be two bedroom apartments or three or four bedroom houses. If you are after higher yields of 9% and over, you could take more of a risk with houses of multiple occupancy but these are generally filled with less desireable tenants naturally leading to ongoing issues, therefore they are ideal for the risk takers amongst us.

If you are interested in investing in Thanet or need some advice on how to get the best out of your current property investments then come in and see us. Our office is along Northdown road in Cliftonville.