Do I need a survey on a buy to let property?

Do I need a survey on a buy to let property?

In some ways it is even more important to have a survey on a buy to let property than one you plan to live in yourself.  If you live in a property yourself you will note whether any maintenance works need attending to.  If a property is let then you will be relying on the tenant to inform you if any works need attending to.  If you employ the services of a letting agent, while they may carry out periodic checks they may not be aware of repairs being required unless the tenant informs them.  Some tenants will bring any necessary repairs to your attention but others may not.  It is not a risk worth taking.

When instructing a surveyor to carry out a survey on a buy to let property it is a good idea to let them know that you plan to let the property rather than live there yourself.  This can then be considered during the inspection.

A survey should reveal whether anything needs attending to before a tenant moves into the property.  In most cases it will be necessary to carry out a test on the electrical installation and to service any gas appliances, such as boilers and gas fires.

The survey report will also let you know if there are any other potential hazards including:

  1. Dangerous wiring.
  2. Low level glazing and/or large panes of glass which are not safety glass.
  3. Large opening windows without opening restrictors.
  4. Windows to upper floors which do not allow escape or rescue in the event of a fire.
  5. Large gaps to balustrades.
  6. Lack of a handrail to staircases.
  7. Lack of smoke detectors.
  8. Infilled/capped chimneys or flues. A tenant must be aware that any disused chimneys/flues should not be used.
  9. Loose tiles.
  10. Inadequate fire door (or lack of a fire door) between the dwelling and any integral garage.

And finally, don’t forget to forward a copy of the report to your solicitor and to arrange buildings insurance.

 

buying and selling a house

Share This:

Buy to let property:  choosing, managing, student lets and landlord’s responsibilities

 

There has been an increase in the purchase of buy to let property over the decades as some people see this as a preferred form of investment.  However, it is important to be fully aware of a landlord’s responsibilities to ensure the safety of tenants and ensure all legal responsibilities are being met.

Choosing a Buy to Let Property

Choosing a buy to let property is not the same as choosing a property to live in yourself.  You may wish to live in an old property and take your time refurbishing to your taste but this may not be practical for a buy to let property.  A buy to let property must be in good order before a tenant can move in.

When choosing a property for buy to let, consider the following:

  • Ease of maintenance. Many landlords find a modern property is the most suitable.
  • Locations where there is an established demand for properties to rent.
  • Proximity to amenities such as shops, schools, etc.
  • Ease of access and parking.
  • For flats, consider any restrictions the lease may impose on letting. Also, repairs  are likely to need the approval of the Management  Company, whereas with a house any external  repairs are likely to be easier to arrange.
  • Whether you would prefer to let to working people or students.

Have a survey to establish the condition of the property.  Some works may be essential before a tenant can move in particularly if any hazards are identified.  Works may be required including:

  • Upgrading wiring.
  • Provision of opening restrictors to large opening windows
  • Provision of a safety film/safety glass to large panes of low level glazing (unless they are of safety glass).
  • Works in respect of fire protection and means of escape including the provision of smoke alarms, fire doors where necessary, (eg, for a door opening directly from the dwelling into the garage), etc.
  • Works to any leaning/unstable garden walls.
  • Works to uneven pavings.

The survey will also help you plan a budget for future repairs.

Letting to students

Houses or flats with at least three letable bedrooms in student areas, close to a university, lend themselves to student accommodation.  One or more of the letable rooms may be a ground floor reception room.  An additional bathroom/shower room and WC are an advantage in shared houses and many students now prefer an en suite.

It is a good idea to contact the university accommodation service to arrange to have your property included on their list of available student accommodation.  You may also choose to register with a local letting agency or advertise the property yourself.

Advantages of letting to students include:

  1. There is usually a high demand for accommodation in student areas close to universities.
  2. Most student letting contracts will be for the academic year. If a student moves out during the year then they are still contracted to pay the rent until the end of the agreement.  This typically means a change of tenant only once a year with fewer months without rent.
  3. Some landlords charge a retainer, eg, half rent for unoccupied periods such as during the summer months. This increases overall income during the year.
  4. Student housing generally offers a higher income than a property let to an individual, couple or family, particularly if one or more of the reception rooms are let as bedrooms.
  5. Many student rents will be partly funded by student loans and/or parent top-ups so there is less chance of the rent not being paid to the landlord. A parent of each student should act as guarantor for each individual student to ensure that rent will be paid.

Disadvantage of letting to students include:

  1. Most student houses will need furniture and furnishings including beds, wardrobes, desks, chairs, table, sofa, carpets and curtains.  This will need to have appropriate fire resistance.
  2. Many student houses will need electrical items such as cooker, washing machine, dryer, fridge, freezer, microwave, vacuum cleaner, lamps,   These will need to be safe to use and should be checked regularly.
  3. Student houses generally suffer more wear and tear and damage than houses let to working people.
  4. Most student houses will require more thorough cleaning at the end of the tenancy and this may involve additional costs.

Managing a Buy to Let Property

Many privately let properties are let on an Assured  Shorthold Tenancy  Agreement.   Your letting agent or solicitor can advise on the most suitable agreement.   If rooms are let separately, eg, to students, then consider a joint  tenancy agreement.   In some instances a licence may be required  from the Local  Authority.   Visit  https://www.gov.uk/private-renting-tenancy-agreements

Give consideration to any restrictions you might want to place such as non-smokers, no pets, etc.  

Many private landlords choose to employ an agent to manage the property on their behalf instead of managing it themselves.  The agent will  be responsible for advertising, vetting tenants, collecting rent and checking the property at the end of the tenancy.  This frees up the landlord’s time.  It also leaves management of the property in the hands of an agent with experience in dealing with such matters.  Some letting agents may offer different levels of service enabling you to choose the level of service which meets your needs and falls within your budget.

For general information on managing a buy to let property visit  https://www.gov.uk/private-renting

and

http://www.which.co.uk/money/mortgages-and-property/buy-to-let/guides/using-a-letting-agent

Buy to Let Responsibilities

As a landlord you have certain responsibilities.  You must:

  • Have gas appliances/flues checked every 12 months by a Gas Safe registered engineer.
  • Have the electrical installation checked to make sure it is safe and have any recommended works undertaken before the tenant moves in.
  • If the property is furnished then make sure any furniture (and furnishings if provided) have the appropriate fire resistance.
  • Provide smoke alarms, and in some instances, carbon monoxide detectors.
  • If any appliances are provided, eg, cookers, microwaves, irons, etc, then ensure they are safe to use and have them checked regularly.

You must also hold any deposit from the tenant in an approved deposit scheme.  Visit

https://www.gov.uk/tenancy-deposit-protection/overview

Don’t forget to check that your proposed tenant has a right to rent.   Visit

https://www.gov.uk/government/publications/right-to-rent-document-checks-a-user-guide

For further information visit  https://www.gov.uk/private-renting/your-rights-and-responsibilities 

And finally, remember to arrange buildings insurance.

Insurance of Buy to Let Properties

As landlord, you will be responsible for insuring the building and also any contents which you have provided.  The tenant will be responsible for the insurance of their own belongings.

Inform your insurer that the property is tenanted right from the start to make sure your insurance is valid.   Check whether there are any restrictions on the policy, eg if there is a maximum amount of time the property can be vacant as some insurers  have a time limit.  Check whether the policy gives additional cover, eg, landlords  liability, and, possibly also legal expenses which may be useful if any problems arise with the tenancy.

Financial Issues for Buy to Let Properties

This article deals with choosing and managing a buy to let property.  It does not offer any information on financial issues.  However, in brief, there are a number of financial issues to consider which require investigation and consideration before buying a buy to let property, including:

  • How you plan to finance the property, such as a cash purchase, buy to let mortgage or remortgaging your current property to finance the purchase.
  • Allow for periods when the property might be vacant. It is possible there may be a gap between one tenant moving out and another moving in.  If you have taken out a mortgage this will still have to be paid even during months with no rental income.
  • Check current Stamp Duty for a second home. This often differs from the Stamp Duty on a main residence and varies from time to time.
  • If you choose to sell the property check your liability to Capital Gains Tax.

Generally

If you plan to purchase a buy to let property, whether for working people or students, whether let privately or through an agent, then this will require careful financial planning and full consideration.  In general, buy to let properties should be viewed as a long term investment and can be a successful form of investment if chosen and managed properly.

Share This:

Choosing between buying and renting a property

The choice between buying and renting not only varies from person to person, but also depends on personal circumstances which can change over time.

Deciding whether to buy or rent a property

While many people would prefer to own their own home, others prefer the flexibility of renting.  Some people may rent in the short term while they save for a deposit to buy their first property while others choose to rent in the long term.  This article looks at some of the pros and cons of buying a property compared to renting.   The choice between buying and renting not only varies from person to person, but also depends on personal circumstances which can change over time.

 

Advantages of buying a property include:

  1. You can make alterations to your own taste.
  2. Have the security of your own home.
  3. If you have a mortgage, you will own your own home at the end of the mortgage term.

Disadvantages of buying a property include:

  1. You will be responsible for maintenance and insurance of the property.
  2. If house prices fall and you have a high mortgage you might find yourself in negative equity.
  3. If you need to move to another area, eg for work, you may need to sell the property. This may take longer when the housing market is slow.
  4. If you have bought the property with cash you will have a large amount of capital tied up in the property, money which is not available for other purposes without selling (or arranging finance).

 

Advantages of renting a property include:

  1. The landlord will normally be responsible for maintenance of the property.
  2. The landlord will normally be responsible for insuring the building.
  3. If you want to move you would typically only have to give one months notice to a landlord. This can be particularly useful if you need flexibility, eg, you might wish to move to a different area for employment.
  4. You can live in a property without long term commitment. This can be useful if you are new to an area and do not yet know which area most suits your needs.

 

Disadvantages of renting a property include:

  1. You will normally need to get permission from the landlord/agent before decorating.
  2. When rents are high it may be more difficult to save for a deposit to buy a first property.
  3. In some areas there is less choice of rental properties than properties for sale and you may find it more difficult to find a property which suits your needs.
  4. A rental property may not feel like “home” particularly if it is short term.
  5. If you rent in the long term you will never own your own home and will have to continue to pay rent.


 

Share This: