| There
are a number of issues that a landlord has to handle on a simple
operational day to day basis, which if properly considered will make the
difference between an acceptable return and an excellent return.
Occupancy
If
income is your aim then naturally maintaining your level of occupancy of
tenants is the key factor. In
terms of risk, occupancy is the most important to mitigate. Having your property empty for long periods of time can be
damaging in several ways. The
areas to address in mitigating occupancy problems are:
Decent
locations should mean that there will be a queue of tenants wanting your
property. Nobody likes to
live in a bad area if they can avoid it.
Better locations mitigate the risk of demographic changes in the
area, which can lead to the area worsening and thereby the reducing the
willingness of tenants to rent. They
also mitigate the risk of capital depreciation for similar reasons.
However,
if the location is largely an area of private ownership then
capital appreciation, along market trends is not an unreasonable
expectation. Therefore, relying purely on the type and price of
accommodation can be misleading. For example a three bedroomed terrace at a low price in a bad
area can represent a poorer proposition that a two bedroomed terrace at a
higher price in a better area. There is always the chance of course that
the better area may attract a higher rent.
There
is no doubt that starting with a good standard of property and decoration
will encourage responsible tenancy. Again,
nobody wants to live in a low standard of accommodation and indeed will
appreciate that if they spoil it then their tenancy agreement is unlikely
to be renewed. Additionally,
an initial commitment by you to putting things right will lead to less
costs, and fewer maintenance call outs in the future. This means happier tenants and happier landlords.
If
you are not going to organise tenants yourself and would like to hand
responsibility on, then a recognised Letting Agent is advisable.
They should be able to fill vacancies quickly and maximise
occupancy. They should also
take a lot of problems away from you by being the first contact for
problem calls from tenants.
Letting
Agents are not regulated by statute.
However members of the Association of Residential Letting Agents (ARLA)
or some of the larger chains of estate agents will offer a sound
professional service which should result in you not concerning yourself
too often with events.
You
should expect them to find tenants, organise tenancy agreements, hold
deposit bonds for them, collect rents, organise registration of utilities
and Council Tax, visit the property regularly (at least 6 monthly) and pay
the rent on to you. Charges of 10–15% for this service are normal.
Depending on where your property is located we may be able
to recommend a letting agent to
you.
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