Lettings. Your Residential Lettings Guide. allan-morris.co.uk

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1 Lettings Your Residential Lettings Guide allan-morris.co.uk

2 Welcome to Allan Morris Residential Lettings Letting property is a serious business, whether you are an experienced investor, a landlord or a private individual letting your home for the first time. History suggests that over a period of time residential property is one of the safest and best performing investments, not only providing an excellent income but also, for many, a significant capital gain in the process. Business growth in our area, along with changing lifestyles, has resulted in a dramatic increase in the demand for rental properties. Allan Morris have kept pace with this growth by investing in technology and staff and developing excellent relationships with companies and organisations located in the area that have continual accommodation requirements for their employees. Letting your property demands careful planning and you need a professional agent who will look after your interests and, at the same time, make being a landlord as stress-free as possible. At Allan Morris we use our knowledge and expertise to ensure that our services meet your needs and give you peace of mind. We are committed to providing a service that is second to none. Your property is a major investment and it is important that you are aware of your responsibilities as a landlord as well as knowing the best way to optimise your investment. We have dedicated offices with a team of people who will oversee the letting and management of your property. You will receive a personal service when you call our company. Our knowledge of local issues gives you an advantage and ensures you and your property are much more than a business opportunity to us. Allan Morris is an established force within this field and our internet coverage has strengthened this further. In short, we provide the perfect answer for those who need the professionalism of an established local company and the ability to be able to advertise on a national basis. We should like to take this opportunity to thank you for your enquiry and we look forward to working with you in the future as your managing agent. Lettings 2 55

3 Contents Finding the right property investment 4 A safer investment - property guidance 5 Where to start 6 Finding you a tenant 8 Finding the right tenant 9 The tenancy agreement 10 Levels of service 12 Property management 14 Taxation of rental income 15 3

4 Finding the right property and investment As experts in residential lettings and sales, Allan Morris provide all the expertise you need to ensure that you choose the right type of property to suit your budget and personal circumstances. We can advise you on location, local demand and rental values to enable you to achieve the most from your investment. Our trained and experienced staff will explain all the relevant issues wherever possible. Any decoration or refurbishment at your property should be completed before we start to show potential tenants around. We recommend neutral colour schemes, clearing the property of personal effects and professional cleaning to prepare the property for occupation. This will also make it as easy as possible for tenants to envisage living in your property and will therefore appeal to the widest possible audience. 4

5 A safer investment - property guidance It has been proven that residential property has become an excellent investment. The availability of tailored buy-to-let mortgages at competitive rates has increased demand in the residential lettings market. Property should be viewed as a medium or long term investment. There are short term rises and falls in property values but over the long term property has always performed well as an investment. The Allan Morris Group works together to assist you in finding the right investment property. Regardless of whether you already own a property you wish to rent out or are interested in the buy-to-let market Allan Morris can offer a tailor-made service to suit all your needs. 5

6 Where to start The first stage towards letting your property is to meet with a representative from Allan Morris residential lettings department. We will discuss with you the potential rental value of your property taking into consideration the location, accommodation, condition and current demand within the area. During the appraisal appointment we will discuss with you the most appropriate level of service to suit your requirements. At this stage we will advise you of any action you may be able to take to maximise the rental income and the property s desirability to attract potential tenants. Furnished or unfurnished One of the first decisions to make is whether to let your property furnished or unfurnished. If you should decide to let your property furnished we will advise you to ensure that all furnishings comply with the Furniture and Furnishing (Fire) (Safety) Regulations 1988 as amended. The demand for furnished or unfurnished properties can vary but generally the demand for unfurnished properties is consistently higher. The advantages of letting unfurnished are: Less wear and tear. Lower maintenance and repair costs. 6

7 Who is responsible for the garden? Garden maintenance is generally the tenant s responsibility and most tenants are happy to maintain a small to medium sized garden. However, if your property has a large garden, high maintenance shrubs, bushes, foliage or a garden pond that requires a great degree of care, we recommend that you employ a gardener during the tenancy with the cost of this being reflected in the rental value. Allan Morris will advise if we feel that inclusive gardening would be beneficial. 7

8 Finding you a tenant Allan Morris is an independent company which has established itself on its local reputation, extensive marketing and advertising expertise. People are often unsure whether to have a board outside their property advertising that it is available to rent. Marketing statistics have proved that a board outside the property is still a most effective method of 24 hour 7 day a week advertising. Internet marketing is an ever increasing growth area within our industry. Our internet advertising generates hundreds of enquiries from individuals, companies and relocation agents each week. Allan Morris has built an excellent relationship with many local companies which saves both the employer and employee valuable time in their home search. Internet advertising and marketing has insured that our business is able to appeal to a national and international audience without compromising our local values. Our trained lettings negotiators contact prospective tenants registered on our extensive database with all new property details. A description and photographs of your property will be added to our property list and a selection displayed in the local press every week to ensure optimum exposure. 8

9 Finding the right tenant The success or failure of a lettings agent rests on their ability to make the correct judgement of an applicant. At Allan Morris our trained staff meet prospective tenants to ensure they are suitable to apply for one of our rental properties. We then use the services of an independent credit search agency who specialise in the checking of prospective tenants. There is always an element of risk with lettings, but an experienced agent will know when to refuse an applicant. When a tenant has been found we employ stringent referencing procedures which give details of his or her personal and financial circumstances. When it comes to tenant selection no letting agent can guarantee the tenant will not default, even with excellent references. Allan Morris can offer landlords the option of rent and legal insurance for peace of mind, and this service can be discussed with one of our members of staff. Different landlords make different stipulations regarding what they will and will not allow. Typical exclusions include the following, but remember the stricter you are the more difficult it becomes to find a tenant: No pets No smokers No sharers No unemployed 9

10 The tenancy agreement Once we are satisfied with the choice of tenant(s) and the references are satisfactory we will proceed with the preparation of the tenancy agreement. Tenancy agreements are generally for an initial fixed term of six calendar months and can be assessed during the tenancy. However, other term tenancies can be negotiated. It is likely that the tenancy of your property will be on an Assured Shorthold Tenancy. The tenancy agreement is an agreement between you and your tenant and it is legally binding. A bespoke document will be prepared for you and your tenant. Our tenancy agreement is comprehensive and has been carefully designed to protect your rights to possession and to detail the tenants obligations to you and your property. 10

11 Inventory and schedule of conditions It is vital that a schedule of contents and their condition is available before the tenancy starts. We cannot recommend enough that an inventory is carried out and we can arrange this on request. The inventory is used to confirm the condition at the commencement and end of the tenancy and may need to be used to determine who is responsible for any damages or dilapidations at the end of the tenancy. Without an inventory a landlord will be unable to make a successful claim from a tenant s deposit. Lender requirements If you mortgage the property you are letting you may be required to obtain the consent of your lender. It is unusual for the lenders to refuse consent but most will charge a small administration fee for this. In turn, they will need information on the type of tenancy agreement you intend to use, how long the tenancy is for and they may require certain clauses to be included. Building and contents insurance All landlords should ensure they have adequate buildings insurance cover in place. Tenants are responsible for insuring their own contents and personal belongings. Please note that standard home owner insurance policies will not suffice once a tenant is in residence. It is also important to check on the level of cover if the property is empty for any time. Landlords obligations These are detailed within the tenancy agreement and our terms of business. You will be responsible for maintaining the structure and exterior of your property, heating and plumbing installations and dealing with routine repairs. If your property is leasehold you will be responsible for paying the service charge and ground rent. Furthermore, you will need to inform Allan Morris of any special leasehold conditions that may affect a tenancy. 11

12 Levels of service Allan Morris offer a selection of service options to accommodate the differing needs of clients. Introduction/ Let only service This service includes: Advertising and promoting the property until a suitable tenant is found. Arranging and accompanying viewings. Referencing and carrying out checks on prospective tenants. Producing the tenancy agreement, collecting the first months rent and security deposit. Providing legal documents and monies to the landlord once the tenant has signed the tenancy agreement. Once the tenant moves into the property the landlord will oversee all aspects of the tenancy. 12

13 Full management service Our full management service ensures that every aspect of the lettings process is dealt with by Allan Morris on your behalf. The full management service adds the following to the introduction / let only service: Collecting the monthly rent and paying into the designated landlord s account. Providing a monthly statement of account. Notifying appropriate utility companies of meter readings. Arranging an inventory and schedule of condition at the start of the tenancy. Carrying out interim visits to check the general condition of the property. Arranging maintenance and repairs as necessary. Arranging payments to contractors on the landlord s behalf. Serving legal notices Protecting the deposit. Arranging a check-out at the end of the tenancy. Dealing with any claim for damage against the tenant after vacation. 13

14 Property management within our full management service Property maintenance We have staff on hand to deal with any maintenance issues, oversee any essential repairs and arrange payment of the contractor. Our prime concern is to ensure that the property is maintained, on your behalf, in the same condition in which it was first let, allowing for fair wear and tear. When appropriate we will advise you of any improvements that may be needed in order to attract quality tenants. Unless you have preferred contractors Allan Morris will use one of a group of contractors who have proved their reliability and good workmanship. Allan Morris ensures that landlords are informed of all repairs before authorisation of any work, unless otherwise agreed or in the case of an out-of-hours emergency. Accounting Allan Morris have a dedicated accounts department to ensure that rent is passed on to you as quickly as possible. They prepare statements of rental income monthly so that you have full information for yourself and for your tax return. The tenant pays rent into the Allan Morris client account initially and this is transferred into your account each month. Extending or terminating the tenancy Many tenants extend their tenancy and in some cases stay for several years. If a new fixed term is not signed following the initial tenancy agreement the tenancy automatically continues on a month-to-month basis (statutory periodic). The landlord can terminate the tenancy at the end of the initial tenancy period or, if in statutory period, at anytime thereafter by giving the tenant a minimum of two months notice in line with the tenancy start date. The tenant can either leave on the last day of the initial tenancy period or give one month s notice, in line with a period of their tenancy, thereafter. 14

15 Taxation of rental income UK resident landlords If you are a landlord resident in the UK, your net income from your investment property is subject to income tax. The level of tax depends on your other sources of income. If you are already a higher rate tax payer you will be taxed at that level. The normal method of reporting your taxable income to the Inland Revenue is by a Self-Assessment Tax Return. The following deductions can be made from your rental income to arrive at the net income which is subject to tax: Interest on mortgage. Property repairs. Letting management commission. Building insurance. Ground rent. Service charge. Non UK resident landlords The non-resident landlords (NRL) scheme concerns tax payable on the UK rental income of persons whose usual place of abode is outside the UK. If you are treated as a non-resident landlord you still have to pay UK income tax on rental income from your UK property. Unless the landlord can provide Allan Morris with an exemption certificate from the Inland Revenue, we are obliged by law to deduct basic rate tax from rents received and account to the Inland Revenue on a quarterly basis. Exemption certificates are required by any landlord named on the tenancy agreement when living overseas. Landlords are responsible for obtaining their own exemption certificate and the appropriate forms should be submitted as early as possible as they take several weeks to process. The majority of landlords that apply are granted an exemption certificate. Details on taxation are correct at the time of printing. Further information for non-resident landlords and exemption application forms are available from the Inland Revenue direct. 15

16 The Allan Morris Group of Independent Estate Agents Barnt Green 87A Hewell Road, Barnt Green, Birmingham B45 8NL Bewdley 28 Load Street, Bewdley DY12 2AS Bromsgrove 18 High Street, Bromsgrove B61 8HQ Droitwich Spa Coningesby House, 24 St Andrews Street, Droitwich Spa WR9 8DY Droitwich Lettings Kidderminster 61 Oxford Street, Kidderminster DY10 1BJ Malvern 4 Church Walk, Malvern, WR14 2XH malvern@allan-morris.co.uk Malvern Lettings Pershore 19 High Street, Pershore WR10 1AA pershore@allan-morris.co.uk Redditch 292 Evesham Road, Headless Cross, Redditch B97 5EP redditch@allan-morris.co.uk Redditch Lettings Stourport-on-Severn 9 High Street, Stourport-on-Severn DY13 8DH stourport@allan-morris.co.uk Upton upon Severn The Shop, 14 Old Street, Upton upon Severn WR8 0HA upton@allan-morris.co.uk Upton upon Severn Lettings Worcester Sidbury House, 32 Sidbury, Worcester WR1 2HZ worcester@allan-morris.co.uk Worcester Lettings New Homes Mayfair, London allan-morris.co.uk