Letting Guide
With Offices in Stratford upon Avon and covering Warwick, Leamington and Henley in Arden as well as the leading edge internet and email marketing, we’re well placed to show your property to thousands of people across the region. Over 1000 people visit our website every day. To let your property contact us now.
As an ARLA agent we can offer you the reassurance of separate client accounting, ARLA’s Fidelity Bond, Professional Indemnity Insurance, and the best of industry practice. And with our strong customer service ethic, we want every customer to be a happy customer.
Please read our letting guide below to answer frequently asked questions.
Q1. Where do I start?
You will want to know the rental value of your property. Calling out a number of letting agents for a free valuation would be a good start.
A number of requirements must be met before you can let your property:
1. If you have a mortgage, you will usually have to obtain permission from your Building Society (or Bank) before you let the property. Some Building Societies have stringent requirements.
2. If you are planning to let a leasehold property, there will usually be clauses relating to what you can and cannot do - check your head lease.
3. Your buildings and contents insurance may be affected by letting. Be sure to inform your insurer, or your cover may be negated.
4. Government legislation imposes certain safety regulations on property intended for letting. Safety checks must be done to ensure your property complies.
Q2. Do I need a letting agent, or can I do it myself?
This depends on whether you have the expertise, time, patience and resources to do it yourself. Paying to advertise your property, fielding calls, being available for viewing, vetting tenants and drawing up contracts can be a costly and time-consuming business.
If you want peace of mind, it’s well worth using an agent. Reputable Agents provide specialist letting agreements. They will advise on your obligations under safety regulations. And most good agents will have access to a professional credit referencing agency, to check the tenant can afford the rent and does not have county court judgements.They will also offer specialist insurance to safeguard your rental income.
Agents can field all calls relating to the let, and are adept at weeding out time wasters.
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Q3. How much do letting agents charge?
The initial rental valuation of your property is free.You only pay commission if and when the agent successfully lets your property i.e. ‘No Let, No Fee’ To let and manage your property, administering rental payments, maintenance and tenant enquiries, the typical fee is between 15 – 20% of the rental achieved.
Q4. How does a letting agent estimate the rental value of my property?
Be wary of any agent who just asks you the price you want for your property and agrees with your figure.The agent should be able to demonstrate why they think your property could achieve the valuation price they state. A professional letting agent will visit you at your property to have a look around, and carry out what’s known in the industry as a Competitive Market Analysis (CMA).This is based upon a number of criteria:
1. General market demand from tenants.
2. The popularity of your area (shops, schools, transport etc).
3. Current ‘To Let’ price of similar properties nearby.
4. Prices recently achieved for letting similar properties nearby.
5. Significant works/improvements carried out to the property.
The CMA will give you an estimated market rental. From this, you and the agent can decide on the rental price.
Q5. What if I want more rental than the agent’s valuation?
Letting agents will give you a price they feel is achievable under current market conditions. But ask your letting agent if it’s appropriate to test the market with a higher price, then lower the price if need be.
Q6. I’ve seen several letting agents. How do I choose between them?
Sometimes people immediately plump for the agent who puts the highest value on their property. But you should not be swayed by valuation alone. If a valuation is exaggerated, you could lose weeks of rental income, while your property languishes on the market unlet. Your gut instinct aside, here are some marks of professionalism that you may want to look out for:
1. Polite, friendly and well-trained staff - visit the agents’ offıces.
2. Specialist team dedicated to letting.
3. Clear and helpful advice literature.
4. Well-maintained website with full property details.
5. Efficient, computerised administration system.
6. Comprehensive marketing e.g. newspapers, signboards, leaflets, Internet.
7. Membership of the Association of Residential letting agents (ARLA).
8. Automated email and ‘text’ property details sent to tenants as soon as they register with the agent.
9. Aftercare, monitoring throughout the tenancy, customer complaints procedure and feedback questionnaires.
Unlike sales agencies, you do not have to commit to ‘sole agency’.This means you can market your property with more than one agent, without restriction of a double fee or agreement periods.
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Q7. What is the Association of Residential letting agents (ARLA)?
Anybody can set up tomorrow and start trading as a letting agent – no qualifications are needed. Membership of ARLA ensures that the agent meets a specific professional standard, and minimises the customer’s risk in letting.
To be a member of ARLA, the agent must:
1. Have operated in business premises for the minimum period required by ARLA.
2. Hold Professional Indemnity Insurance, with a copy lodged at ARLA.
3. Hold a separate client account.
On top of all this, your monies are protected by ARLA’s Fidelity Bond. So if monies owed to you were not handed over by the agent due to fraud or theft, you could make a claim to ARLA. Whilst membership to ARLA provides important reassurance, it should not be the only deciding factor in choosing an agent.
Q8. How should I furnish the property?
You may offer the property to let ‘furnished’ or ‘unfurnished’. Once your letting agent has seen your property they will advise what is appropriate. But in principle the standard is:-
Furnished:
White goods - fridge/freezer, washing machine, microwave, bed/s, cooker, sofa (complying with safety regulations), dining room table and chairs.
Simple, modern furnishings suit most people. Do not leave any personal effects such as vases, ornaments and pictures that could get easily damaged or lost. And if you do not wish to repair any items such as a hi-fi or TV do not provide them.
Unfurnished:
You should still provide standard white goods (as above).
Q9. The first people are coming round to view in half-an-hour’s time. How should I prepare my property?
First impressions do count, and the following tips should help viewers to appreciate your property at its best. Although you may be at work when viewers are brought round, try to do whatever you can beforehand.
Make the place as tidy as possible and open the windows to let in fresh air. Quickly vacuum clean and dust the main rooms. Give the bathroom sinks and baths a wipe over. Put some flowers in the main room. Fully draw back the curtains to get maximum daylight in the rooms.
On dull cold days, if you’re in at the viewing time, turn all lights on and light the fireplace. Turn off the radio and TV (but light music is fine). Close all windows that are affected by background noise (traffic, trains etc).
Get rid of any cooking or washing smells by brewing some fresh coffee. Try not to let pets and children interrupt the viewing; keep them occupied.
Bear in mind that interested tenants can sometimes be a bit later than the viewing time arranged. With this in mind, when a viewing is arranged (and you want to be there), be clear about the window of time that they have if you mean to go out afterwards.This will also help discourage lateness.
Q10. How should I conduct a property viewing?
There are no hard-and-fast rules here, but do:
1. Agree with your letting agent who will conduct the viewing - you or them?
2. Ensure you have all keys readily available to open any garage, French windows, fire escapes etc.
3. Give time, if necessary, for viewers to discuss the property alone before they leave. Simply moving out of earshot will make this easier.
4. Resist the temptation to ask viewers if they like your house.You may not get a true answer, and in any case it makes negotiating easier and less personal if the Agent handles feedback until matters progress to an offer.
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Q11. How long will it take to find a suitable tenant?
In general the letting process can take anywhere between a few days to several weeks. Influencing factors will be market demand and the efficiency of the agent’s marketing and system. So ask your letting agent about expected letting time when you invite them to value your property.
Agents with computerised systems and effective website marketing will maximise the speed of your let. For instance, if your property is emailed/text messaged to an agent’s tenant database it will reach more people quicker and at the same time. Referencing a tenant can take a week or more. However some agents can offer fast-track referencing within 72 hours.
Q12. How do I go about vetting a potential tenant?
A good letting agent will do this for you, vetting tenants in the most thorough way they can.This involves doing a professional credit and fraud check, and perhaps obtaining written references.The former will tell the agent whether or not the prospective tenant has any county court judgements against them, and the tenant’s ability to afford the rent. References may also be sought from a prospective tenant’s employers, and from previous Landlords as appropriate.
Q13. What are my obligations during the let?
One of the Landlord’s main obligations, by law, is to let the tenant have ‘exclusive, quiet enjoyment’ of the property. If any repairs related to letting are needed during the tenancy, you should arrange for these to be carried out promptly. As the tenant is paying for the use of the property it’s only fair that anything that goes wrong is put right.
You should redirect your mail during the occupation by tenants. You must also ensure your property complies with safety regulations.
Q14. I’ve heard horror stories about sitting tenants. Can I be sure I’ll get my property back at the end of the tenancy?
The Housing Act 1988 (as amended by the Housing Act 1996) largely put paid to the problem of sitting tenants. Yet still, it’s important that you choose a letting agent who uses an Assured Shorthold Tenancy. Crucially, this agreement contains a clause that the property is yours to possess again at the end of the tenancy. It also sets down rental payment details, who will pay for council tax, water etc.
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Q15. Is it guaranteed that the tenant can pay the rent?
It can never be guaranteed that the tenant/s will pay you rent or not damage your property.Any letting agent that tells you otherwise is not telling the truth.
A professional letting agent will do all they can to protect your rental income by: taking adequate references (including a credit reference), offering you rental and legal protection insurance; taking a deposit, setting up a direct debit for rent payments; using correct agreements; having a strategy for chasing late or unpaid rental.
In the event of the worst, you will be entitled to go for repossession of your property and use your insurance to pay for legal costs and to recover unpaid rental.
Q16. Do I need specialist landlord insurance?
Even if your tenant has good references unforeseen eventualities such as redundancy can result in unpaid rent. As such, most agents recommend a rental insurance policy.
Also, occasionally landlords are unlucky enough to suffer a tenant who refuses to move out. In this instance, legal protection insurance can help cover the cost of legal action.
Most insurers require that agents manage the property and that you have a ‘check-in’ and ‘check-out’ schedule of contents.
Q17. What safety requirements does the law expect me to meet?
Legislation requires that safety checks be made before the property can be let.Your letting agent should help you understand these and provide assistance where possible e.g. arrange for testing of appliances.The following regulations currently apply:
Gas Safety (Installation and Use) Regulations 1994 (as amended):
This Act requires the Landlord of rented property to have any gas appliances and their associated pipework tested on an annual basis. It is essential that this work is done before tenants take occupation. If the property does not at present conform, a good letting agent can help you to arrange what is necessary. Note that one copy of the current record of the safety test certificate is to be kept on the premises. And you must also provide a certificate for each tenant.
The Furniture and Furnishings (Fire) (Safety) Regulations 1988 (as amended):
You need to ensure that all upholstered furniture complies with these regulations. Generally, these cover the need for fire-resistant filling material to upholstered articles, and the passing of a matchresistant and cigarette-resistant test.
The Electrical Equipment (Safety) Regulations 1994; Plugs and Sockets etc (Safety) Regulations 1994:
Landlords must ensure that ALL electrical equipment, appliances, and electricity supply is safe. Instruction booklets or clear instructions must be provided for these. Plugs and sockets that are newly installed must conform to the appropriate British Standard or approved alternatives. Plug and socket regulations are not retrospective, but any relevant equipment included in a new tenancy after the start of the new regulations must comply.
The General Product Safety Regulations 1994:
According to these regulations, Landlords are required to consider the general safety of the tenants in their property. For example, the Landlord should supply instruction manuals for items used in the property, and compile an information sheet listing potential danger points in the property such as sharp objects and hot surfaces.
The above information was correct at the time of publication. Legislation changes so always consult your letting agent.
Q18. Do I need a Solicitor?
No, you do not need a Solicitor to let your property. A good Letting agent will have Professional Indemnity Insurance and be able to provide you with all the advice, expertise and legal agreements you need. Check that your letting agent is a member of ARLA –
Q19. What does property management involve?
This is where the agent looks after the property on behalf of the landlord once the tenant has ‘moved in’. Property management takes the onus off the landlord by dealing with day-to-day tenancy issues, property repairs and emergencies. Because even the smallest of issues can become time consuming and occur at inconvenient times, many landlords find property management a ‘must have’.
Property management usually includes:-
1. Administering rent payments and statement of accounts
2. Chasing rental late payments
3. Property maintenance by arranging repairs
4. Property inspections to check condition is maintained by tenants
Whether an agent offers property management in-house or out-house, it should operated by dedicated expert staff. Property management is a specialist job, and as such it is often a condition of rental and legal insurance that the landlord uses an ARLA member agent with this service.
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Q18. How is rental income taxed? And are there any deductibles?
As many letting expenses can be offset against tax on rental income, most letting agents recommend their clients seek professional tax advice. Most agents can recommend specialist property accountants.
Examples of tax deductibles are: -
1. Letting agent’s fees
2. Insurance
3. Ground rent
4. Repairs (not improvements)
5. Legal and accounting costs
6. Some loan interest
7. Wear and tear of contents
8. Unused personal allowances
If you have any further questions that were not covered in our letting guide please contact Stratford Property - we would be delighted to help.
To let your property contact us now.