How to Choose a Buy to Let Property
A buy to let property is a great investment for lots of people. If you can afford to buy a flat or a house to rent, you will want to make sure you can make the most income from it you possibly can. Here are some things to think about when choosing your property:
- Capacity. If you buy a house of multiple occupancy, such as a student house, you can make more money from it.
- Type of property. Flats will usually be sold on a leasehold basis, so you won’t be the freeholder. Make sure you understand the terms of the lease fully.
- Service charges. If you buy a flat, there will be service charges that you pay to the management company. These will cover the maintenance of the building.
- Fire safety. Make sure you choose a building that is well looked after so you won’t have to put in too many fire alarms or fire doors.
What is the Role of a Property Management Company?
Property maintenance companies are the companies or organisation responsible for looking after a freehold property. This will usually be a block of flats or a house in multiple occupation, where there are lots of tenants living in one place. This creates a slightly complex situation in terms of who owns what – there is a landlord who owns the building itself, and who owns the land that the property sits on. They will not own the individual residences – these are usually owned by individual landlords, but on a leasehold basis. So it is clear that a landlord is responsible for their own property. Who is responsible for maintaining the freehold property?
The landlord who owns the building will ultimately be responsible for all maintenance. However, they will usually pass all responsibility over to a property maintenance company who can deal with all of this for them. This is beneficial for landlords because they can then go on to own multiple blocks of flats, earn income from them, but without having to take care of them. They entrust this to the maintenance company, so that they know their property will be in safe hands and can make them the maximum amount of profit.
The maintenance company will look after anything that may need doing to the building. Here are some scenarios in which the maintenance company will step in and take charge:
- The property has gardens that need looking after. Unless the gardens are private and belong to one specific tenant, the maintenance company will take care of the grounds. They will hire a gardener to look after all the land that the property sits on.
- The property has corridors that are heated. All heating provision will be taken care of by the maintenance company, and they will make sure the boilers are functioning properly and receive regular servicing. If the radiators need bleeding, this should fall to them too.
- The communal windows need cleaning. The maintenance providers should arrange for a window cleaner to come out regularly to maintain the windows and keep them clean.
- Some repair work needs carrying out to the building – perhaps some roof tiles need to be replaced, or there is some bricklaying that needs to be carried out. The maintenance provider should have contractors they work with regularly, who will be able to carry out the work. They should obtain a few different quotes so as to find the best price for the landlord.
- The communal hallways and areas need to be kept clean and tidy. It will be the residents’ responsibility not to leave personal items outside their flats that could obstruct the hallways. However, all cleaning should be carried out by an appointed cleaner.
How is this paid for?
Residents or landlords of flats should pay a service charge for living in the block. This will go towards all of the maintenance that the building requires. If more money is required for something big, then the landlords will be asked to provide more money.
How to Make Sure your Tenants are Happy
As a landlord, finding good tenants is the most important thing you can do. If you find tenants who pay their rent on time, do not quibble about the bills and look after your property with respect, you need to try your best to hold on to these tenants. Make sure they are happy to avoid them choosing to move elsewhere.
The main thing to do is to ensure the property is in really good condition. Make sure everything is in good working order and has been properly maintained. If the tenants report any maintenance issues to you, get them dealt with as quickly as possible. This is especially important if it is something like a broken boiler or a leak, as it could endanger the tenants and cause further damage to the property.
Carry out regular inspections and try to talk to the tenants. This will allow you to fix and issues and to find out how you can keep your tenants happy.
Marketing a Property – What to do
Marketing a property to sell or to rent needs to cover some important points for the buyer or potential tenant. If you are looking at marketing a property, either to sell or rent privately or as part of an estate agency, here are some points that you should take note of:
- Write and speak persuasively. Make sure people know the benefits of the property. Have some facts and figures in mind, such as where the local schools are and how close the property is to bars and restaurants.
- Make sure it is up to scratch. Monitor the property to make sure you don’t notice any problems with damp or with insulation. This will put people off immediately.
- Give it a lick of paint. People will fall in love with a property and go with their heart when they can imagine themselves living in it. Let them see a blank canvass – use white or cream paint.
What are Building Service Charges?
Service charges are usually paid by the leaseholder of a flat. They are payments that are made to the freeholder, or the person who owns the building. This money could go directly to the freeholder, or it may go to the property agent that is used by the freeholder. If the building has a residents’ association who also own the land and building, service charges will go to them.
The service charges paid by flat owners (or indeed house owners, if the plot of land is leasehold) are used to maintain the building and carry out any repairs. These could include window cleaning, gardening, cleaning of corridors, maintenance of building entry systems etc. It will also include the day to day running costs of the building, such as central heating.
Service charges will usually be enough to cover repairs and maintenance, though sometimes a bigger job like a roof replacement may cost more.