Be realistic with the price
The maximum rent you can charge is ultimately determined by three key factors:
- Supply of that type of property
- Demand for that type of property
- The actual finish of the property
Rental demand may be high for 2 bed flats in the area but 4 bedroom period cottages low so just because you may hear the lettings market is strong at the moment doesn’t necessarily mean it is for all types of property.
Don't be drawn in by over-inflated numbers
The reality is that rent values change. It’s important to take advice from an Estate Agent they will know from how quickly they have let similar properties and the people they have registered on their books looking for that type of property. Sometimes reducing by £50-100pcm can make a huge difference. If it means you have no down time with the property being empty and you can secure great tenants I would say it was a small price to pay and in actual fact better in the long term!
Get the property advertised with plenty of time before it is ready to ensure no down time
Generally, if the property is priced correctly you should have enquiries and viewings booked within the first week. If you haven’t had an offer within three to four weeks, take action on one or more of the following:
- Fix any small issues that might be putting off tenants
- Spruce up your property inside and out. Touching up of paint adding some flowers by the entrance can all make a huge difference
- Be flexible – maybe think about accepting pets especially if your property is appealing to families for a certain school in the area that are likely to have a pet
- Consider a price adjustment – sometimes you can test the market slightly higher and see what response you get. If there isn’t much then consider it was pitched a little high
Get an inventory done before the new tenants move in
An inventory will give you an itemised condition report of your property before the tenancy starts. It will have full photographic evidence to back the report up and will be time stamped. This is shown to the tenant upon check in for them to check and raise and issues they see to confirm that the inventory is correct as they will be liable if there is a stain on the carpet for example at the end of the tenancy. This process keeps the tenancy transparent and saves a lot of hassle in the long run.
At the end of the tenancy these points will need to be considered when assessing any damage to your property:
- Fair wear and tear
- Betterment – you cannot use your tenant's deposit to replace old and worn items
- Evidence – and this is where a thorough inventory is vital
- Average life span – after all, carpets and other furnishings do not last forever
Money can be deducted from your tenants deposit at the end of the tenancy to cover damaged or missing items. However, this is subject to strict rules laid down by Government-backed deposit protection schemes. In law, the deposit remains the property of the tenant. This is why the inventory is crucial!
Know what tax you are liable to pay and know the difference of being an overseas
If you receive rental income in the UK but you live overseas for more than six months of the year, you are classed as ‘non resident’. You are still liable for UK tax, but there can be flexibility in how the tax is paid. If you are in any doubt, seek advice from an accountant.
Written by Remzi Mehmet