Tenancy Agreement
It is vital to create a binding tenancy agreement. If you have not invested in the services of a Lettings Agent to manage this, you may wish to pay a solicitor to draw one up. Even if you have had a Tenancy Agreement from a previous letting, you may need to up-date it. There have been numerous legal changes in the buy-to-let industry, such as the Tenancy Deposit Protection Scheme, which need to be reflected in the agreement.
In addition, the majority of mortgage lenders require landlords to have an Assured Short-hold Tenancy (AST) agreement in order to take out a buy-to-let mortgage. Contracts with tenants usually run for 12 months, although break clauses are commonly inserted into the agreement to allow earlier termination of the contract.
References
References from your tenant's employer and/or previous landlord can help you to assure that the tenant is the sort of person you want to live in your property. It is recommended that you instruct a Lettings Agency to do this for you, but if you would rather gather the references yourself, make sure you allow plenty of time for chasing the potential tenant and following up on their references. A Letting Agency will generally conduct much more rigorous referencing, so much so that some will guarantee the rent and remove the tenant if as result, you still have problems
Deposits
A deposit from a tenant covers you against both damage to the property and unpaid rent. However, landlords are legally obliged to place the deposit in a Government-approved tenancy deposit scheme. Failure to do so could result in a fine of up to three times the original deposit, plus the deposit itself. In addition, should you wish to evict a tenant at a later date, this will be much harder if the deposit has not been properly protected. Letting Agents will be registered with a government approved scheme, and it is important that you use such a scheme.
Inventory
A robust inventory at the start and end of tenancy are important in avoiding any disputes over the return of deposits. Many prolonged disputes are as a result of a failure to properly assess the property at check in. Taking the time to conduct a thorough inventory using either an inventory company or a letting agent using proprietary software, can save time and hassle later.
Building and Contents Insurance
Most mortgage lenders insist on buildings insurance - so remember to calculate this into your costs! Contents insurance should also be seriously considered. Carpets, appliances, fixtures and fittings can all be insured against tenant damage. It is also possible to insure against payment default from tenants, which may be prudent in the current economic climate.
Regular Property Checks
In our experience, many private landlords can be lax when it comes to regularly checking their buy-to-let property. Checks can reveal problems that could become more costly if left to fester. Remember, you are legally obliged to give tenants 48 hours notice before your visit. A letting Agent will usually offer comprehensive visual inspections (at agreed intervals).At Affirmed Choice Letting, the Chichester Letting Agent, we are passionate about the principles of personal customer care, and our guarantee is to provide a unique 'Peace Of Mind' property management service to tenants and landlords. Click here to find out how we help landlords to protect their investment.
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