e-commerce currency conversion Landlords | Railton-Meeks - Part 3

How to choose a letting agent?

November 1st, 2010

When I started investing in the late 1990’s, I was lucky enough to be working in a letting agency, where I had all the expertise and knowledge to hand. During this time I saw many Landlords turn to us once the novelty of managing their property had worn off; in particular after the first instance of their tenants calling in the middle of the night!

It is still true today that the majority of new Landlords whether it is an accidental or a planned investment strategy, choose to manage the first property themselves. They think they would rather save themselves the fee, believing that agents don’t work hard enough for their money.  This may be true of some agents, but the good ones work very hard indeed!  With all the possible pitfalls, and new legislation to keep abreast of, it makes financial sense to hand the job to professionals.

Here are some pointers to guide you when looking for a good agent, and some things to consider….

1. Do you have a recommendation?  Do you know someone who has had a positive experience to report, and then a recommendation is an excellent way of beginning the search.

2.  Is the letting agent proactive?  The best of letting agents will always be proactive in everything they do, from advertising to inspection. How to tell if they are proactive? Put them on the spot; ask them to outline how they ensure that your property is being looked after by the tenants.  Do they check on the property at regular intervals, as this is very important! Tenants, who know that they will be checked upon, will make an effort to look after the property. Does the agent keep in touch with the tenant (not just when the rent is overdue!). Tenants, who don’t clean their property, have problems bringing it up to the condition they took it when it is time to move out!) 

3. Other points to take into consideration are, how much is the letting agent charging, and what for exactly? Do you think you are going to get value for money and the best possible service? Do you think you will be able to get on with the agent? Good relations with your agent are important. What level of service are they offering you?

4. Ask the agent to provide contact names and telephone numbers of their current clients; the agent will need to get permission, but if they have a good working relationship with the client this will not be a problem.  Current clients will be more than happy to give the full story behind the service they receive.

Questions to ask the client: a. How many void periods have you experienced? b. Do you receive your rent pay out in a timely fashion on a set day each month? c. Is the cost of your repairs good value?

5. Does the agent appear to be a stickler for the Law?  All properties require an EPC (energy efficiency certificate) prior to being advertised.  They must also have a current Gas Safety certificate and a PAT test (Electrical Appliance Test). Is your furniture fire safe?

6. Is your agent associated with one of the professional lettings bodies for example ‘The Property Ombudsman’? www.tpos.co.uk

7.  Does the agent have Professional Indemnity Insurance? This is important you need to know that this is in place in case of any recourse.

8. Finally, do you need to go with a high street agent?  No not necessarily, exceptional service does not start with a shop front.  As long as the agent uses the majority of the large advertising property portals, and has a proven track record of letting your type of property, with happy clients; then these are the important factors.

You will also find that non high street agents have fewer overheads and will pass these savings on to you! You may also find that you receive a more tailored service, and smaller agents will be far more committed to their clients.

Railton-Meeks are of course biased, but we have been servicing very happy Landlords for many years.  Our clients feel they receive the best service out there.  One very important point – when our clients want to see us, we pay them a house visit, no more parking problems on the high street!!

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Gearing up and saving on tax.

October 8th, 2010

‘Gear up’ & save tax

I was chatting to tax expert about various ways landlords can save paying tax on their buy-to-let properties.

He highlighted one aspect that many landlords may not of considered.  This technique is particularly useful for landlords who are earning considerable amounts of rental income and are also fortunate to receive a high personal income taking them into the top rate tax bracket.

To save money a landlord needs to ‘gear up.’

This means borrowing money against their residential investment property and thereby instantly increasing the amount of expenses incurred on their rental property.

They then should invest in a tax free income generating investment.  When interest rates rise significantly they can then use their funds to repay their new outstanding buy-to-let mortgages.  What a landlord should ensure is that the buy-to-let mortgage they opt for has low set up fees and a competitive interest rate.

Low interest rates appear to be one of the lynch pins of the Coalitions economic policies meaning that many landlords will make considerable rental profits for several years to come.

Therefore landlords looking to minimise their tax burden should consider gearing up.  There will probably be financial costs with setting up the initial loans but this could be small compared to the potential tax savings.§

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Is this the end of the ‘Interest-only mortgage…’?

September 22nd, 2010

MOVES to tackle reckless bank lending could shatter the home owning dreams of millions of Britons and trigger a slump in house prices.

That’s the damning verdict of industry body the Council of Mortgage Lenders in a scathing attack on City watchdog the Financial Services Authority yesterday.

The FSA sparked controversy by planning to scrap interest-only mortgages, slow the application process and effectively cap how much people can borrow from next year.

Michael Coogan, CML director general, accused the FSA of overstepping the mark, with implications for generations to come.

“The golden age of home ownership is over for the moment”, he said, with the credit crunch already leading to a sharp drop in lending.

And he warned this mortgage famine could become permanent under the FSA’s “fatally flawed” plans which would “stifle innovation and opportunity”.

Read more: http://www.mirror.co.uk/news/city-news/2010/09/23/mortgage-lenders-declare-golden-age-of-home-ownership-over-115875-22580876/#ixzz10IA9i5Aj

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