What the Renters’ Reform Act Means for Landlords
We understand the importance of staying informed about changes in legislation that impact landlords. The Renters’ Reform Act is a significant piece of legislation aimed at improving the rental market in the UK. As experienced landlords ourselves, we recognize that understanding and adapting to these changes is crucial for maintaining successful tenancies and complying with the law.
In this blog post, we’ll explore what the Renters’ Reform Act means for landlords and provide guidance on how to navigate these changes effectively.
Overview of the Renters’ Reform Act
The Renters’ Reform Act aims to create a fairer and more secure rental market for tenants while balancing the rights and responsibilities of landlords. Key provisions of the Act include the abolition of Section 21 “no-fault” evictions, the introduction of a new lifetime deposit scheme, and reforms to improve property standards.
Abolition of Section 21 “No-Fault” Evictions
One of the most significant changes introduced by the Renters’ Reform Act is the abolition of Section 21 “no-fault” evictions. Currently, Section 21 allows landlords to evict tenants without providing a reason, provided they give the required notice period. The removal of this provision means landlords will need to rely on Section 8, which requires a valid reason for eviction, such as rent arrears or breach of tenancy terms.
Implications for Landlords:
- Increased Security for Tenants: Tenants will have greater security, knowing they cannot be evicted without cause. This could lead to longer tenancies and reduced turnover.
- Stronger Grounds for Eviction: Landlords must have valid grounds for eviction under Section 8. It is crucial to document any breaches of tenancy terms thoroughly to support eviction cases.
- Potential Legal Challenges: With the reliance on Section 8, landlords may face more legal challenges when seeking to evict tenants. Ensuring compliance with all legal requirements and seeking legal advice when necessary is essential.
Introduction of a Lifetime Deposit Scheme
The Act introduces a new lifetime deposit scheme, which aims to make it easier for tenants to move between properties. Under this scheme, tenants can transfer their deposit from one property to another, reducing the financial burden of needing to provide a new deposit while waiting for the old one to be returned.
Implications for Landlords:
- Simplified Deposit Transfers: The lifetime deposit scheme will simplify the process of deposit transfers for tenants, potentially making your property more attractive to prospective tenants.
- Timely Deposit Returns: Landlords must ensure that deposits are returned promptly and in accordance with the scheme’s requirements. Delays or disputes could impact the tenant’s ability to secure their next rental property.
- Deposit Disputes: Clear documentation and thorough property inspections at the start and end of tenancies are essential to resolve any potential deposit disputes efficiently.
Reforms to Improve Property Standards
The Renters’ Reform Act includes measures to improve property standards, ensuring that all rental properties are safe, habitable, and meet certain quality criteria. This includes the extension of the Decent Homes Standard to the private rented sector.
Implications for Landlords:
- Property Inspections: Regular property inspections will be necessary to ensure compliance with the new standards. Addressing maintenance issues promptly and keeping detailed records of inspections and repairs is crucial.
- Cost of Upgrades: Landlords may need to invest in property upgrades to meet the new standards. Budgeting for these improvements and prioritizing essential upgrades can help manage costs.
- Tenant Satisfaction: Higher property standards can lead to increased tenant satisfaction and reduced turnover. Well-maintained properties are more likely to attract and retain quality tenants.
Changes to Tenancy Agreements
The Act is expected to introduce changes to tenancy agreements to make them more transparent and standardized. This includes providing clearer information about tenant and landlord responsibilities, rent increases, and dispute resolution processes.
Implications for Landlords:
- Updated Tenancy Agreements: Landlords will need to update their tenancy agreements to comply with the new requirements. Using standardized templates provided by reputable sources can ensure compliance.
- Clear Communication: Clearly communicate any changes to tenancy agreements with your tenants. Providing transparent information about their rights and responsibilities can help prevent disputes.
- Legal Compliance: Ensuring that all tenancy agreements comply with the new regulations is essential. Seek legal advice if necessary to ensure your agreements are legally sound.
Preparing for the Changes
To navigate the changes introduced by the Renters’ Reform Act effectively, landlords should take proactive steps to prepare:
- Stay Informed: Keep up-to-date with the latest information about the Renters’ Reform Act and its implementation timeline. Subscribe to updates from reliable sources such as the NRLA (National Residential Landlords Association) and local councils.
- Review and Update Policies: Review your current policies and procedures to ensure they align with the new requirements. Update tenancy agreements, eviction processes, and property maintenance plans as needed.
- Seek Professional Advice: Consult with legal and property management professionals to ensure full compliance with the new regulations. Professional advice can help you navigate complex legal requirements and minimize risks.
- Communicate with Tenants: Maintain open lines of communication with your tenants. Inform them about the upcoming changes and how they may impact their tenancy. Address any concerns or questions promptly and transparently.
The Renters’ Reform Act represents a significant shift in the UK rental market, with important implications for landlords. By understanding the key provisions of the Act and taking proactive steps to prepare, landlords can navigate these changes successfully and continue to provide high-quality rental experiences for their tenants.
At My Landlord Cares, we are committed to helping landlords adapt to new regulations and maintain successful tenancies. Contact us for more personalized advice and support tailored to your specific needs.
How to Find Better Tenants
We understand the importance of finding reliable and responsible tenants. As landlords ourselves, we know that the quality of your tenants can significantly impact your property management experience. A good tenant pays rent on time, respects the property, and follows the lease terms.
In this blog post, we’ll share effective strategies to help you find better tenants and maintain a harmonious rental relationship.
1. Craft a Detailed Listing
A well-crafted property listing is the first step in attracting high-quality tenants. Your listing should be detailed, accurate, and appealing, providing prospective tenants with all the necessary information to make an informed decision.
- High-Quality Photos: Include clear, high-resolution photos of your property. Highlight key features such as spacious rooms, modern appliances, and attractive outdoor spaces.
- Detailed Description: Provide a thorough description of the property, including the number of bedrooms and bathrooms, square footage, and unique features. Mention any recent renovations or upgrades.
- Clear Rent and Terms: Clearly state the rent amount, deposit requirements, and lease terms. Include information about any additional costs, such as utilities or maintenance fees.
2. Screen Tenants Thoroughly
Effective tenant screening is crucial to finding reliable tenants. A thorough screening process helps you assess the suitability of potential tenants and minimize the risk of future issues.
- Background Checks: Conduct background checks to verify the tenant’s identity, rental history, and criminal record. This helps ensure that you are renting to a responsible individual.
- Credit Checks: Perform a credit check to assess the tenant’s financial responsibility. A good credit score indicates that the tenant is likely to pay rent on time.
- References: Request references from previous landlords and employers. Contact these references to gather information about the tenant’s reliability, behavior, and rental history.
3. Set Clear Tenant Criteria
Establishing clear tenant criteria can streamline the screening process and help you find tenants who meet your standards. Clearly communicate these criteria in your property listing and during the application process.
- Income Requirements: Set a minimum income requirement, typically three times the monthly rent, to ensure the tenant can afford the rent.\
- Employment Stability: Prefer tenants with stable employment and a steady income. Long-term employment indicates reliability and financial stability.
- Rental History: Look for tenants with a positive rental history, including timely rent payments and good relationships with previous landlords.
4. Market Your Property Effectively
Effective marketing can help you reach a larger pool of potential tenants and increase your chances of finding high-quality applicants. Utilize multiple platforms and marketing strategies to maximize your property’s visibility.
- Online Listings: Post your property on popular rental websites, such as Gumtree, Rightmove, Zoopla, and SpareRoom. These platforms attract a large number of prospective tenants.
- Social Media: Use social media platforms like Facebook, Instagram, and Twitter to promote your property. Join local community groups and rental forums to reach potential tenants in your area.
- Local Advertising: Advertise in local newspapers, community bulletin boards, and local businesses. Word of mouth and community networks can also be effective in finding good tenants.
5. Maintain and Present Your Property Well
The condition of your property can significantly impact the quality of tenants you attract. Well-maintained properties attract responsible tenants who are likely to care for the property.
- Curb Appeal: Ensure the exterior of your property is well-maintained. This includes landscaping, painting, and general upkeep. A good first impression can attract high-quality tenants.
- Clean and Functional Interiors: Make sure the interior of the property is clean, well-maintained, and functional. Address any repairs or maintenance issues before showing the property to potential tenants.
- Upgrades and Amenities: Consider making upgrades to improve the property’s appeal. Modern appliances, updated fixtures, and added amenities can attract better tenants.
6. Offer Competitive Rent and Incentives
Setting a competitive rent and offering incentives can attract high-quality tenants who are looking for good value and benefits.
- Market Research: Conduct research to determine the average rent for similar properties in your area. Setting a competitive rent can make your property more attractive to potential tenants.
- Incentives: Offer incentives such as a reduced security deposit, a free month’s rent, or including utilities in the rent. These incentives can make your property stand out in a competitive market.
7. Build Good Tenant Relationships
Building a good relationship with your tenants can lead to longer tenancies and a more positive rental experience. Happy tenants are more likely to take care of the property and comply with lease terms.
- Clear Communication: Maintain open and clear communication with your tenants. Be responsive to their concerns and address maintenance issues promptly.
- Respect and Professionalism: Treat your tenants with respect and professionalism. A positive landlord-tenant relationship can lead to better cooperation and mutual respect.
- Regular Check-Ins: Schedule regular check-ins to ensure the property is well-maintained and address any concerns the tenant may have.
Finding better tenants requires a combination of effective marketing, thorough screening, and maintaining a well-presented property. By setting clear criteria, conducting comprehensive background checks, and building positive relationships, you can attract and retain high-quality tenants.
At My Landlord Cares, we leverage our experience as landlords to provide support and guidance to help you find the best tenants for your property. Contact us for more personalized advice and services tailored to your specific needs.
How to Reduce Property Maintenance Costs
We understand the importance of keeping property maintenance costs manageable. As experienced landlords, we know firsthand the challenges of maintaining properties while keeping expenses in check. Effective property maintenance not only preserves the value of your investment but also ensures a comfortable living environment for tenants.
In this blog post, we’ll share practical strategies to help you reduce property maintenance costs without compromising on quality.
1. Preventive Maintenance
Preventive maintenance is one of the most effective ways to reduce long-term property maintenance costs. By addressing potential issues before they become major problems, you can save significant amounts on repairs and replacements. Regular inspections and routine upkeep can help you identify and fix small issues early.
- Regular Inspections: Conducting regular inspections of your property can help you spot potential problems such as leaks, cracks, or wear and tear. Schedule these inspections quarterly or biannually to stay on top of maintenance needs.
- Seasonal Maintenance: Prepare your property for different seasons by performing specific maintenance tasks. For example, clean gutters in the fall to prevent blockages and inspect heating systems before winter.
2. Invest in Quality Materials
While it might be tempting to opt for cheaper materials to save money upfront, investing in quality materials can save you more in the long run. Durable materials reduce the frequency of repairs and replacements, ultimately lowering maintenance costs.
- Flooring: Choose durable flooring options such as tile, hardwood, or high-quality laminate, which can withstand heavy use and last longer than cheaper alternatives.
- Paint and Finishes: Use high-quality paints and finishes that are more resistant to wear and tear. This can reduce the need for frequent repainting and touch-ups.
3. Energy Efficiency Upgrades
Improving the energy efficiency of your property can reduce utility bills and maintenance costs. Energy-efficient systems and appliances tend to have longer lifespans and require less maintenance.
- Insulation: Proper insulation helps maintain consistent indoor temperatures, reducing the strain on heating and cooling systems. This can prolong the life of HVAC systems and reduce maintenance needs.
- LED Lighting: Replace traditional light bulbs with LED bulbs. They use less energy, generate less heat, and last significantly longer, reducing replacement costs.
4. Establish Good Tenant Relationships
Building a good relationship with your tenants can have a positive impact on property maintenance. Tenants who feel valued and respected are more likely to take care of the property and report issues promptly.
- Clear Communication: Maintain open lines of communication with your tenants. Provide clear instructions on how to report maintenance issues and respond promptly to their concerns.
- Tenant Education: Educate tenants on basic maintenance tasks they can perform themselves, such as cleaning filters, checking smoke detectors, and reporting leaks immediately.
5. Hire Reliable Contractors
When repairs or maintenance are needed, hiring reliable contractors can make a significant difference in cost and quality. Experienced professionals can complete work more efficiently and accurately, reducing the likelihood of future issues.
- Research and Reviews: Take the time to research contractors and read reviews from other landlords. Hiring a contractor with a good reputation can prevent costly mistakes and subpar work.
- Long-Term Relationships: Establish long-term relationships with trusted contractors. They may offer better rates and prioritize your projects if you are a repeat customer.
6. Implement a Maintenance Schedule
A well-organized maintenance schedule helps ensure that tasks are performed regularly and on time. This can prevent minor issues from escalating into major problems.
- Digital Tools: Use property management software or digital calendars to schedule and track maintenance tasks. Set reminders for routine inspections, seasonal maintenance, and equipment servicing.
- Checklist: Create a comprehensive maintenance checklist that includes all necessary tasks and their frequency. This ensures that nothing is overlooked and helps you stay organized.
7. DIY Where Possible
For landlords who are handy, performing simple maintenance tasks themselves can save money. However, it’s important to know your limits and leave more complex repairs to professionals.
- Basic Repairs: Learn to perform basic repairs such as fixing leaky faucets, replacing light fixtures, and patching small holes in walls.
- Tool Kit: Keep a basic tool kit on hand for minor repairs and maintenance tasks. This can save you from having to call a contractor for every small issue.
Reducing property maintenance costs requires a proactive and strategic approach. By investing in preventive maintenance, quality materials, and energy efficiency, you can minimize long-term expenses. Building good tenant relationships, hiring reliable contractors, and staying organized with a maintenance schedule further contribute to cost savings.
At My Landlord Cares, we leverage our experience as landlords to provide support and guidance to help you maintain your property efficiently and cost-effectively. Feel free to reach out to us for more personalized advice and services tailored to your specific needs.
Is Buy-to-Let Still a Good Strategy in the UK in 2024?
My Landlord Cares has firsthand experience in the property market and understands the challenges faced by landlords. With evolving economic conditions and regulatory changes, many property investors are questioning whether buy-to-let remains a viable investment strategy in 2024.
In this blog post, we will explore the current state of the buy-to-let market, key factors influencing its viability, and insights for potential and existing landlords.
The Current State of the Buy-to-Let Market
The buy-to-let market has experienced significant changes over the past few years. Various factors, such as increased regulation, tax changes, and economic uncertainty, have influenced the attractiveness of buy-to-let investments. Despite these challenges, the rental market continues to show resilience, with strong demand for rental properties, particularly in urban areas and university towns.
Key Factors Influencing Buy-to-Let in 2024
1. Economic Conditions
The UK economy is currently facing multiple challenges, including inflation, interest rate fluctuations, and the lingering impacts of Brexit and the COVID-19 pandemic. These factors can affect both rental yields and property values:
- Inflation and Interest Rates: Inflation remains a concern, prompting the Bank of England to raise interest rates. Higher interest rates can increase mortgage costs for landlords, impacting profitability. However, inflation can also lead to higher rents as landlords pass on increased costs to tenants.
- Property Prices: Property prices have seen significant growth in recent years. While this can mean higher initial investment costs, it also offers the potential for capital appreciation over the long term.
2. Regulatory Environment
The regulatory landscape for buy-to-let properties has become more stringent:
- Tax Changes: Recent changes, such as the phasing out of mortgage interest tax relief and the introduction of additional stamp duty for second homes, have reduced the net income for landlords. Investors need to carefully consider these tax implications when evaluating buy-to-let opportunities.
- Energy Efficiency Standards: New regulations require rental properties to meet higher energy efficiency standards, which can involve significant refurbishment costs. Landlords must be prepared to invest in property upgrades to comply with these regulations.
3. Demand for Rental Properties
Despite regulatory and economic challenges, demand for rental properties remains robust. Factors contributing to this demand include:
- Urbanization: Continued migration to cities for work and education sustains high demand for rental properties in urban areas.
- Affordability Issues: Many potential homeowners are unable to purchase due to high property prices and mortgage restrictions, increasing the pool of long-term renters.
Pros and Cons of Buy-to-Let in 2024
Pros:
1. Steady Rental Income: With high demand for rental properties, landlords can expect a steady stream of rental income.
2. Potential for Capital Growth: Property prices, while volatile, tend to appreciate over the long term, offering potential capital gains.
3. Portfolio Diversification: Buy-to-let properties can diversify an investment portfolio, providing a tangible asset that generates income.
Cons:
1. Increased Costs: Higher interest rates, tax changes, and regulatory compliance can increase the costs associated with buy-to-let investments.
2. Market Volatility: Economic uncertainties and fluctuating property values can affect the profitability and value of buy-to-let investments.
3. Management Challenges: Being a landlord requires time and effort to manage properties, deal with tenants, and ensure compliance with regulations.
Tips for Successful Buy-to-Let Investment in 2024
1. Research the Market: Stay informed about the local property market and economic conditions. Areas with strong rental demand and potential for capital growth should be prioritized.
2. Plan for Costs: Factor in all costs, including mortgage payments, maintenance, taxes, and regulatory compliance, when calculating potential returns.
3. Consider Professional Management: Engaging a letting agency like My Landlord Cares can help manage properties efficiently, ensuring compliance and maximizing rental income.
4. Focus on Tenant Needs: Investing in properties that meet tenant preferences, such as proximity to transport links, amenities, and good schools, can reduce vacancy rates and increase rental yields.
While the buy-to-let market in the UK faces challenges in 2024, it remains a viable investment strategy for those who approach it with diligence and preparation. Understanding the economic conditions, regulatory landscape, and tenant demand is crucial for making informed investment decisions.
At My Landlord Cares, we bring our experience as landlords and letting agents to help you navigate the complexities of the buy-to-let market. Whether you are a seasoned investor or considering your first property, we are here to provide the support and expertise you need to succeed.
Feel free to reach out to us for more personalized advice and insights tailored to your specific circumstances. Our commitment is to help landlords and tenants thrive in any economic climate.
Navigating the Cost of Living Crisis: A Landlord's Perspective
As landlords, we understand the challenges and responsibilities that come with property ownership. From managing tenants and maintaining properties to navigating legal obligations and financial considerations, being a landlord is no easy feat. However, the ongoing cost-of-living crisis has added a new layer of complexity to an already demanding role.
In this blog post, we explore the significant impact of the cost-of-living crisis on landlords and offer insights into how landlords can navigate these challenging times.
Rising Expenses and Financial Pressures:
One of the most immediate effects of the cost-of-living crisis on landlords is the rise in expenses. From increasing mortgage rates to higher property taxes and insurance premiums, landlords are facing mounting financial pressures that can eat into their rental income and profit margins. Additionally, the rising cost of utilities and maintenance services further adds to the financial burden, making it increasingly challenging for landlords to maintain their properties to a high standard while keeping rents affordable for tenants.
Rental Arrears and Tenant Financial Hardship:
As the cost of living continues to rise, many tenants are finding it difficult to keep up with their rental payments. Job losses, reduced hours, and inflation have all contributed to financial hardship for tenants, leading to an increase in rental arrears for landlords. Dealing with tenants in arrears can be a stressful and time-consuming process, requiring landlords to navigate legal procedures and eviction processes while also trying to maintain positive relationships with their tenants.
At My Landlord Cares, we understand the importance of compassion and empathy in these situations and work closely with both landlords and tenants to find mutually beneficial solutions.
Regulatory Changes and Legislative Challenges:
In addition to financial pressures, landlords are also contending with regulatory changes and legislative challenges that impact their ability to operate effectively. From changes to tenancy laws and eviction procedures to new energy efficiency standards and licensing requirements, landlords must stay informed and compliant to avoid penalties and fines. However, keeping up with the ever-changing regulatory landscape can be a daunting task, particularly for landlords who may not have the time or resources to dedicate to staying abreast of the latest developments.
At My Landlord Cares, we provide landlords with the support and guidance they need to navigate regulatory changes and ensure compliance with all relevant laws and regulations.
Support and Solutions:
Despite the challenges posed by the cost-of-living crisis, there are steps landlords can take to mitigate its impact and protect their investments. At My Landlord Cares, we offer a range of services and solutions designed to support landlords and help them navigate these challenging times. From financial planning and budgeting assistance to property maintenance and refurbishments, we provide landlords with the tools and resources they need to succeed in an increasingly complex market. By working together with landlords, tenants, and key industry partners, we can weather the storm of the cost-of-living crisis and emerge stronger and more resilient than ever before.
The cost of living crisis presents significant challenges for landlords, from rising expenses and rental arrears to regulatory changes and legislative challenges. However, by staying informed, proactive, and adaptable, landlords can navigate these challenges and protect their investments.
At My Landlord Cares, we are committed to supporting landlords through these difficult times. Together, we can overcome the challenges of the cost-of-living crisis and build a brighter future for landlords and tenants alike.
Responsible Landlord: A Blueprint for Ethical Property Management
At My Landlord Cares, we understand the pivotal role that landlords play in shaping the housing landscape and fostering thriving communities. With firsthand experience as landlords ourselves, we recognize the challenges and responsibilities that come with property ownership. In this blog post, we delve into the essential steps landlords can take to embrace responsibility and uphold ethical practices in their property management endeavors.
- Prioritize Tenant Well-being: Central to responsible landlords is prioritising the well-being of tenants. This encompasses ensuring safe and habitable living conditions, promptly addressing maintenance issues, and respecting tenants' rights to privacy and peaceful enjoyment of their homes. Regular property inspections can help identify potential hazards or maintenance needs, allowing landlords to take proactive measures to safeguard their tenants' welfare.
- Transparent Communication: Effective communication lays the foundation for a positive landlord-tenant relationship. Landlords should maintain open channels of communication with their tenants, providing clear and timely information regarding rent payments, lease terms, and any relevant property policies. Transparent communication fosters trust and mutual respect, facilitating smoother resolution of any issues or concerns that may arise during the tenancy.
- Fair and Consistent Rent Policies: Rent affordability is a pressing concern for many tenants, particularly in areas with high housing costs like Sheffield. Responsible landlords should adopt fair and transparent rent policies, taking into account market conditions, local affordability standards, and tenants' financial circumstances. Implementing reasonable rent increases and providing advance notice can help alleviate financial strain for tenants while ensuring a sustainable income for landlords.
- Proactive Property Maintenance: Regular property maintenance is essential for preserving the value of the investment and ensuring tenant satisfaction. Landlords should schedule routine inspections and address maintenance issues promptly to prevent minor problems from escalating into major repairs. Proactive maintenance not only enhances the tenant experience but also demonstrates a commitment to property stewardship and longevity.
- Compliance with Legal Obligations: Landlords are subject to various legal obligations and regulations governing the rental housing sector. From safety standards to tenancy agreements to deposit protection, compliance with relevant laws is non-negotiable for responsible landlords. Staying informed about legislative changes and seeking professional advice when needed can help landlords navigate complex legal requirements and avoid potential liabilities.
- Community Engagement and Responsiveness: Responsible landlords actively engage with the local community and respond to community concerns. This includes being considerate of neighbors' interests, addressing noise or nuisance complaints promptly, and contributing positively to the neighborhood's social fabric. Building strong relationships with local stakeholders fosters a sense of belonging and collective responsibility, benefiting both landlords and tenants alike.
At My Landlord Cares, we are committed to promoting responsible landlord practices and promoting positive landlord-tenant relationships. By embracing ethical property management principles and prioritizing the well-being of tenants and communities, landlords can contribute to a more sustainable and inclusive housing market. Together, let us strive to create rental experiences that are founded on respect, integrity, and compassion.
Beware of ‘tenants in situ’—houses that are sold with tenants
Buy a house and you don’t have to do a thing. You can close your eyes, and the rents will come in. Sounds great, doesn't it? But don’t be fooled! Never ever purchase a property with a ‘tenant in situ’ without getting to know the tenants and landlord first. Recently, we have had a mixture of experiences thanks to more and more landlords purchasing in this manner.
In a less affluent area of Sheffield, we were asked to take over a property after completion. The experience was great, even though we were a bit worried about this. The neighborhood was a state, the house was great inside, and the tenants were very responsive.
On the other side, in a well-off neighborhood, we were instructed by another client to manage their property. Things could not be any worse as the tenant declined to engage. She refused to continue paying rent, and at one point, she slammed the door on us. We found out later that they were problematic tenants, and the landlord struggled to evict them, so he just sold the property with ‘tenants in situ’. The landlords have made this mega-expensive purchase and have not had any rent come in. They had to serve eviction orders.
As I said earlier, get to know both the landlord and the tenant when viewing these types of properties. You will get a good sense of what they are like during initial meetings and even on viewings. Whenever we look at packages for our landlords, these are the types of checks we do, needless to say, with both properties, we were not involved with the purchase.
We provide a complete package and advice on purchase and property management, so you deal with just one company. You are not a piece of luggage being passed around.
Are you considering getting into Property and unsure what the ideal Property is? Then talk to us—we are happy to always take your call.
Help! My tenant is not responding to my messages!
Landlord ‘J’ knew something was up, but he was just so desperate to get his property back. When he went to his property, he was shocked at the state of it. It took 3 skips to get rid of the junk on the property. Landlord ‘J’ has been super stressed over this period and admits he is not a people person, and this was hands down one of the worst experiences in his working life. In his bid to save money, Landlord ‘J’ thought he could do everything.
Does this sound familiar?
At My Landlord Cares, we spend time building relationships with your tenants so these types of problems can be avoided. This is why we provide a 6-month intensive support programme. In this way, we build this up from day 1.
So if you’re struggling and tired of being a super person, give us a call and claim your life back. Make the property passive again.
Should I purchase property through a LTD company, or personally
This straightforward guide will go through our own personal journey and hopefully will provide some food for thought. It is real and our experience, in its rawest form.
Now we had a very similar predicament last year, when our portfolio was growing. My partner and I were both working as well as managing properties (and people think we have the easy life!)We were worried that the peanuts we make on our profits would get penalised, especially if we fell under the higher income bracket.
So we did the sensible thing and decided to do some research. Google was absolutely awful. It is like when you are self-diagnosing your cough, which Google tells you is the first sign of cancer! One page told us it is the bees' knees, and the other said there was so much extra work that it was not worth it (remember, we are both working, have children, and managing properties). The thought of more work frightened the life out of us.
ALWAYS seek out professional advice, pay the money. We spoke to accountants who explained the process a bit more, which included lots of accountancy geeky words (such as cash flow, shareholders, I have forgotten many of the rest lol) Setting up the business was relatively straightforward, by the way remember that your personal address will show up (so if you can afford to buy a address please do so). Also, there will be regular yearly reports to fill in. You will need to open a business bank account (you can use a personal one, but it gets messy).
CRAP BITS
There is no stamp duty relief for people who buy properties through LTD companies
The mortgage rates are awful for LTD companies
Be prepared for everyone to hike up their prices when they find out you are a business – no leniency for start-ups
The government really doesn’t care about you. Look at the recent debacle over unpaid rent, and everyone else is getting support but not landlords.
BETTER BITS
The liability is on an ‘unnatural state’, so for example, we had a very awful experience at an auction house (This will be covered in another blog BUYERS BEWARE!) and the idiots wanted to charge us £5k for their sellers ’ fees. Due to the charges being on the company, they will have to sue the company rather than us – this is not looking very much like it should be part of the better bits!
You can claim salaries through the company and take dividends to reduce your tax bill. If you put in a director's loan, which you most likely will do to inject the company with cash to purchase properties, this will mean you can take these out via da director’s loan with no tax implications. This is not possible if you buy a property personally.
If you have children whom you would like to pass property to, with the current capital gains tax and inheritance tax, you end up paying a massive whack to the government. Now we pay our taxes like everyone else, but we have worked hard to purchase these properties. Through a business, you could make your children directors; they can have a stake and pull an income. A good plan for them to love US and keep in our good books, haha.
Now we are struggling to think of better bits, and we are very early in our venture. Maybe more positives will come to life, maybe it will be so tough and hard that we end up dissolving…who knows! Lockdown gave us time to think things through rather than just acting.
The decision is purely personal, and please do seek professional advice before embarking on any route. Use our experience as a personal reflection to help you make a decision, and best of luck in all your endeavours. And this is our plug: if you are a landlord in Sheffield and Rotherham and sick of letting agents, give us a call. We will provide honest and helpful support.
Contact us for a chat.
Is Buy-to-let still a good strategy in 2023?
I attend many property networks, and some investors are doing some really crazy and innovative property investment techniques. This ranges from converting commercial spaces to apartments to creating housing of multiple occupancies to creating Airbnb-style setups. Now, this is all good and well if you really want to grow and scale fast. But it's a lot of risk. Some of these strategies require a lot of capital, with the lure of possible great cash flow.
Property for me was always about finding a healthy balance between profit and low risk, so Buy-to-let always appeals to me. The cash flow in rentals is quite small, but the true potential is in the capital appreciation. To give you an example of this, in a month, an average cash flow (if you're fortunate in the current climate) should be about £200 profit per month, with interest rates being high and the acquisition of property being quite high as well, with Buy-to-let. It's hard to even achieve this, so beware of people who tell you they can give you 10 to 12% returns and investment, especially in this current market. Also factor in mortgage, repairs, insurance, etc., into this equation.
It was one thing when the prices were low before the financial crash of 2008, but we haven't seen those markets in a long, long time. With a £200 pound plus profit per month in mind after outgoings factored in, you can see you'll need a lot of properties to get to a level that will supplement your income. Every property requires a big cash injection. This is in the form of a deposit, stamp duty, solicitors' fees, etc., but Buy-to-let is still the safest and most fundamental rental property type. Completely vanilla, no surprises.
This is what we advocate at My Landlord Cares.
We use Property as an investment vehicle. What I mean by this is that when you put money in the stock market, all financial gurus (the ones that are the most professional and knowledgeable) will tell you to leave it in the market for a long time. Don't touch it, even with its ups and downs. Likewise, we advocate the same concept in the long term. Your property that you will probably purchase at £100,000 in 2023 will most likely, from previous history, be at £150,000 if not more in 2033. So it's a capital appreciation that you are banking on now.
I know this slow and steady approach isn't what many people sign on to when they get into Property. Many who go into Property want quick money and quick cash flow, but it is definitely the least risky way of purchasing properties.
Always balance your risk personality towards your rewards. If you are high-risk, this isn't the strategy for you.
Long-term Buy-to-let allows someone to create a home and live in that property for the long term. We have had tenants who have been with this for more than a decade and have been amazing. They have called this property their home, and we have built up long-term relationships.
This is what we advocate within the private rented sector, rather than the constant churn of tenants. It's about finding the right tenants who are willing to call your property their “home”. So if you are debating what kind of property you are going to buy and what you will be searching for, your next deal, then please have a conversation with us. For us, property is a means of a pension pot and will allow you to gain financial independence. If you're looking for the same, we're happy to talk to you. Contact us.