Landlord & Tenant

According to the author's ‘Rule of 12’, a good buy-to-let property will give you around 12 per cent of the purchase price each year in income, so if your new property costs £45,000, you would hope to get around £450 per month in rental.

If similar properties in the area are rented out at £350 per month, you know your property will struggle to bring in the rent you need and maybe you should consider investing somewhere else.

You can find out much more about the Rule of 12 in the Buy-to-Let Bible.

Kitchen
Is the kitchen big enough to accommodate a small dining table? This is attractive if there is only one reception room and it turns the kitchen into a kitchen-diner.

Smallest bedroom
If the smallest bedroom is smaller than 6' 6" in any direction then it’s not a bedroom! You need to be able to get a bed in a bedroom, so this room can only be considered as a study or a baby’s room. You need to think about this when deciding what type of tenant you are looking for. If you’re looking for two professional people to share a two-bedroom flat, then the second bedroom must be bigger than 6' 6".

Bathroom
Is there a fitted shower? A bathroom is a lot more desirable if there is a power shower. If there are two bathrooms then the property is very desirable, even if one is only a shower room.

Heating
An old heating system can be expensive to replace. If possible, get it checked before you buy the house. It is your legal duty to provide heating and to issue a gas safety record.

Electrics
Are the electric sockets old? This will tell you that at some point the whole electric system will need rewiring.

If you are new to the property game, it’s probably best not to. It is time-consuming, stressful and you lose money while the property is not being let out.

If you are experienced, have the time and can afford to do without the incoming rent, then it could be worth your while. Always remember to double the amount you think you’ll spend because unforeseen costs almost always emerge.

It is possible to borrow everything you need by taking out an unsecured personal loan and using it as a deposit on your new property. However, this is a risky way of investing, and you should probably only do it if your income is much higher than your spending.

Another option is to arrange a 100 per cent mortgage. Some offer several times your salary, plus your partner’s salary, and you can find a list of providers in the Buy-to-Let Bible – Ajay Ahuja

If you do have enough money for a deposit on your new property, it is often easier to get a buy-to-let mortgage than a normal one, because the property rental income – not your income - will fund the repayments.

It’s against the law to evict a tenant by force, or to harass a tenant to make him leave by, for example, cutting off the gas or water. If you try to evict someone without a court order, you could be liable for criminal prosecution and/or a claim for damages by the tenant. If you need to evict a tenant, you should consult a solicitor before taking any action.

You can give notice to end your agreement provided you can find a suitable replacement tenant. If you can't find such a replacement, you will be responsible for the rent until the end of the agreed tenancy, even if you have physically left the property. In any case, you cannot end the agreement during the first three months of your tenancy.

You have a number of unavoidable obligations:

Repairing Covenants
Under the Landlord and Tenant Act 1985, the landlord must look after the structure and exterior of the property, and the installations for the supply of services (gas, electricity, water, sanitation and heating). You’ll find this in the Assured Shorthold Tenancy agreement for England and Wales and in the Short Assured Tenancy agreement for Scotland. The landlord should also look after the roof of the property, drains, gutters and the garden, if there is one.

Gas safety
Under the Gas Safety Regulations a landlord must have the gas equipment at a property inspected every year by a Council for Registered Gas Installers (CORGI)-registered plumber and give the certificate to the tenant. Landlords should check the current regulations with their local health and safety executive, who enforces them.

Furniture, electrical equipment and general product regulations
These regulations require furniture to be fire-resistant, and all electrical equipment and other items in the property to be safe. You can get further information from your local trading standards office.

Covenant of quiet enjoyment
This is part of all tenancies and it means the tenant should be able to live without interference. The landlord can’t enter the property without the tenant’s consent (except in an emergency), should keep the property in a proper condition, and should not do anything or allow anyone else to do anything which would affect the tenant’s rights, for example, stopping services to ‘persuade’ the tenant to leave.

A landlord who lets a number of separate flats in a property has a duty to his other tenants because of the covenant of quiet enjoyment. For example, if one tenant is a nuisance, the other tenants will look to the landlord to solve the problem, and if necessary evict the disruptive tenant.

Insurance
The landlord has an obligation to insure the property and its contents but the tenants are responsible for insuring their own possessions. The landlord should be certain his insurance policy is suitable for rented property – his normal household insurance generally will not be. Check the terms of the policy carefully, as some policies exclude cover for lettings to some types of tenant. The agreements included in the Residential Letting Kit allow the landlord to give the tenant a copy of the insurance policy. This is so the landlord can hold the tenant responsible if he does anything that voids the insurance or causes the landlord’s premiums to increase.

Try these ideas, in this order:

Reduce the rent
If you can’t let your property at the price you want, then try reducing the rent –even as little as £2 per week less can make a difference.

Be less picky
For example, if you’ve asked for non-smokers then consider smokers. A local cleaning company can get rid of the smell quite easily by if need be.

Put furniture in the property
This will be expensive and is no guarantee that the place will attract tenants. Consider this if you are getting calls rejecting the property because it is unfurnished.

Consider selling it
This is a drastic step, because most properties in the UK are lettable – it’s just the rent you are asking for that might put off possible tenants. However, if you are experiencing trouble letting it, think about getting out! You could sell it and buy something else.

Here are five hints:

1. Decorate the property in a neutral style
2. Buy property in high demand areas
3. Be less fussy about the type of tenant you are willing to accept
4. Buy a type of property for which there is high demand
5. Advertise the property in plenty of time before the end of the current tenancy