Intire are specialists in the letting and management of residential property, taking pride in our reputation for providing friendly, knowledgeable and professional advice to landlords across Bristol.

Through our extensive experience, we know that landlords demand a high level of knowledge and expertise from their selected agent. They may need to be guided through the letting process generally or require more specific information on the legal and tax implications of letting a property.

This guide will help landlords achieve the maximum possible rental income for their property, whilst at the same time avoiding the common pitfalls. Whether you are letting your home for the first time or you are an experienced investment landlord, we hope you find the content both informative and helpful.

01. Lettings market

Long-term alternative to buying

Over the last decade there has been a permanent shift in attitude towards the private rented sector. Renting is no longer seen by tenants as a ‘halfway house’ between selling and buying a home and home-searchers increasingly see renting as a long-term alternative to buying. In recent years, the Government has become dependent on private landlords to accommodate the ever-increasing demand for housing and so introduced significant legislation to help protect landlords and tenants. As a result, today’s market attracts as many seasoned buy-to-let investors as first-time and accidental landlords.

Considering letting

You may be considering letting for any number of reasons. Maybe you are one of the large percentage of landlords who choose the lettings market because it’s more flexible than traditional forms of investment and pension planning. Perhaps you will be working abroad for a number of years and want to retain a stake in the UK housing market or maybe you have recently inherited a property you can’t sell or want to let out until the sales market improves. Whatever your reason, we’re experts in helping landlords make the right choices to maximise their returns with minimal stress.

02. Benefits of letting

Flexible investment

Legislative changes in the mid 1990’s removed many of the uncertainties associated with lettings and allowed landlords to regain possession of their property at the end of the tenancy term. This coincided with the introduction of buy-to-let mortgages and, as a result, the buy-to-let market was established. Many find investment in residential lettings to be a worthwhile alternative to stocks, shares and pension plans that are often little understood. Fundamentally, for many landlords, property is a tangible, flexible asset that they can relate to with a near infinite choice of where, when and for how long to invest. Quite simply, all this makes lettings the preferred choice of many investors.

Making money

There are two ways landlords can make money through lettings. One is capital growth, where a property appreciates over time, and the other is rental income, which is the amount the tenant pays. Both these values are subject to market conditions and expert advice should always be sought beforehand. Rental income and capital growth can be maximised by using a dedicated letting agent with expert local knowledge, buying the right property in the right location, presenting the property at its best and securing quality tenants who will treat the property with respect and pay their rent on time.

Maximising returns

Although the property market can fall as well as rise, if you buy well, your property’s rental income and capital growth should increase over time. It’s vital landlords deduct all costs from the projected rental income – the largest of which is usually the mortgage. Accurate rental assessments are crucial for projecting realistic rental incomes. So, we recommend you use an agent who can assess market conditions accurately and evaluate changing market demands to advise you on the best rental investment opportunities.

03. Buying to let

Choosing a property

The key to success with buy-to-let is choosing the right property in the right location. A property that is in good condition throughout, that provides good balanced accommodation and is well placed in a location where there is good steady tenant demand, will generally let easier and is likely to provide the best returns.

The main points to consider when choosing a property are:

-Condition and state of repair. Look for properties that are in a good condition and state of repair throughout. Properties in a poor condition should be avoided unless all defects and repairs (e.g. new boiler, windows, kitchen, bathrooms and floors) have been budgeted for and will be carried out before the property is marketed.

-Balanced accommodation. Good layout and well proportioned rooms are hugely beneficial. A property with two double bedrooms as opposed to three single bedrooms is likely to appeal to a wider audience. Avoid basement flats without a garden and high-level apartments without a lift.

-Location and aspect. Properties that are conveniently placed for easy access to local amenities and transport links let quicker. Proximity to open spaces and parks will appeal to the family market and having restaurants and bars within walking distance will appeal to the professional/ corporate market. Plenty of natural light and south facing gardens are always an advantage.

-Outside space. A garden can be as important to tenants as the inside of the property. Many tenants choose one property over another simply because of the way the outside space is presented. Properties benefiting from off street parking are likely to command a premium.

Preparing a property to let

Often, the condition and appearance of a property is the deciding factor for potential tenants. A property that is in first class order can achieve a higher rent and will let much easier.

Therefore, it’s in the landlord’s interests to ensure that the property is in a good decorative state.

We would recommend the following:

- Light, modern and neutral colours such as white, beige and magnolia. Avoid dark or bright colours.

- Quality flooring such as hardwood, original floorboards or neutral carpets.

- Modern and well equipped kitchens; preferably with white goods such as fridge freezer, washing machine and dishwasher.

- Modern bathroom suite; preferably white, with good quality floor and walls tiles. A power shower is always a plus point for tenants.

- Rectifying and putting right any minor repairs. Although minor, it may be a major turn off for potential tenants.

04. Letting Process

Presenting a property for viewings

Put simply, the best presented properties will let more quickly and achieve the higher rents. Prospective tenants will form an opinion about a property within the first 15 seconds – so it’s important to show your property to its best possible advantage.

When presenting your property for viewings, we recommend the following:

- Outside space, including gardens and driveways should be tidy and clear of rubbish. Clean up weeds, sweep driveways and add some plants.

- The inside needs to be clean, tidy and free of clutter. Ensure rooms are not too crowded with personal effects. The furniture should be arranged in a welcoming manner so as not to create barriers.

- Remove items of bulky over-sized furniture if necessary to create a sense of space.

- The whole house should be clean, particularly the kitchen and bathroom areas. Windows should be clean, inside and out.

- Ensure the property smells clean. If there are pets, air fresheners or neutralisers are advisable. Opening windows to air the property will also help.

- Make sure all lights are in working order and blown bulbs are replaced.

- Keep curtains fully drawn to give the maximum possible natural light.

- Pets and young children are out during viewings. This will help the viewer focus on the property and minimise distractions.

Inventory and schedule of condition

An inventory and schedule of condition is essential in confirming the contents and condition of a property at the start of a tenancy. Under the terms of the tenancy agreement, the tenant is required to return the property to the landlord in the same condition as at the start of the tenancy, save for fair wear and tear. Without a detailed inventory, landlords can face hefty charges for breakages or repairs that might have otherwise been recovered had the inventory been prepared by a skilled professional who is trained to avoid omissions. We include a full written and photographic inventory with every let at no additional cost by our APIP (Association of Professional Inventory Providers) trained staff.

Tenancy deposit protection

Landlords are legally required to safeguard tenants’ deposits under an insured or custodial Tenancy Deposit Scheme. Tenancies affected include all Assured Shorthold Tenancies (ASTs) commencing on or after 6th April 2007 and AST’s commencing before 6th April 2007 which have been extended in writing on or after that date for a fixed term. Company tenancies, Premium Leases and tenancies where the rent exceeds £100,000 per annum are exempt. The Tenancy Deposit Scheme is good news for landlords and tenants. It means any disputes are dealt with quickly and providing there are no problems, deposits are returned within ten days of the end of the tenancy. Landlords who don’t comply, and fail to inform the tenant of the Tenancy Deposit Scheme protection arrangements within 14 days of the start of the tenancy, can find they are unable to gain possession of their property under the usual ‘Section 21’ route of the Housing Act 1988. They can also face a fine of up to three times the deposit amount (payable to the tenant). All deposits we take on behalf of our landlords are protected in a Tenancy Deposit Scheme at no additional cost.

05. Safety & energy efficiency regulations

Gas safety

Gas Safety (Installations and Use) Regulations 1998 state that gas appliances, fittings and flues must be safe for tenants’ use and that installation, maintenance, repairs and annual safety tests are carried out by a registered engineer. An annual gas safety test must be carried out on every rental property and a copy of the pass certificate must be given to the tenant before a tenancy commences. Breach of the regulations is a criminal offence punishable by fine, imprisonment or both. We arrange and carry out the gas safety test on behalf of our landlords at no additional cost.

Electrical safety

Electrical Equipment (Safety) Regulations 1994 state that all portable electrical appliances in rental properties must be safe, have operating instructions and that safety notices must be supplied before a tenancy commences. Although there is not a strict statutory obligation for carrying out electrical safety tests, breach of the regulations is a criminal offence punishable by fine, imprisonment or both. Because we endorse and follow best industry practice, we organise and carry out Portable Appliance Testing (also known as PAT) on every initial let at no additional cost to our landlords.

Smoke alarms

All properties built since June 1992 must be fitted with mains operated interlinked smoke detectors/alarms with at least one detector per floor level. In the case of older single family rental properties, technically there is no legal requirement for landlords to provide a smoke alarm. However, it is strongly recommended that landlords do provide at least one battery operated smoke alarm in all properties.

Furniture and furnishings regulations

The Furniture and Furnishings (Fire)(Safety) Regulations 1988 (amended 1989 & 1993) sets levels of fire resistance for domestic upholstered furniture, furnishings and other products containing upholstery that are supplied with a let property. Landlords must ensure that all such items supplied are compliant with the regulations. Breach of the regulations is a criminal offence punishable by fine, imprisonment or both. If furniture and furnishings are compliant, they will be labeled accordingly.

Items covered by the regulations are:

-Beds, headboards of beds and mattresses

-Sofa-beds, futons and other convertibles

-Nursery furniture

-Garden furniture suitable for use in a dwelling

-Scatter cushions and seat pads

-Pillows

-Loose and stretch covers for furniture

Exempted items are:

-Antique furniture or any furniture made before 1950

-Bed-clothes, duvets and sleeping bags

-Loose covers for mattresses

-Pillowcases

-Curtains

-Carpets

For the latest information and guidance you are advised to obtain a copy of the regulations from The National Archives at www.legislation.gov.uk

Energy performance certificate

All properties marketed to let in England must have a valid Energy Performance Certificate (EPC). As well as rating a property on its energy efficiency, it supplies information on CO2 emissions and recommends how to improve the energy efficiency of a property. Each certificate is valid for ten years even if there is a change in tenancy during that time. Landlords can face a fine for non-compliance so we will organise and provide a valid EPC for every initial let at no additional cost.

06. Tax position

Income tax

Landlords with property in the UK must declare their income and costs, and keep a record of all invoices, receipts and statements for up to six years. Landlords can off-set some of the running costs, including maintenance, cleaning, gardening, letting agents fees, mortgage interest and insurance premiums against tax on the rental income. If the property is furnished, there are also added allowances. Although the initial cost of furnishing your property is not allowable, the actual cost of subsequent replacement may be claimed or alternatively a wear and tear allowance is given. Losses on buy-to-let property can be carried forward and off-set against rental profits in future tax years. Our Intirely Managed service includes providing landlords with a tax statement at the end of the financial year which details all income and expenses we have dealt with on their behalf.

Capital gains tax

Landlords with buy-to-let properties are required to pay capital gains tax on any profits generated from the sale of their properties - so it’s important to keep track of current and projected market conditions as well as considering the projected yields of a property. There are a number of tax reliefs available to reduce the amount of tax you may have to pay including Letting Relief and the Capital Gains Tax Allowance.

Overseas landlords

The Non-Resident Landlords (NRL) Scheme requires UK letting agents to deduct basic rate tax from rent they collect for non-resident landlords. Non-resident landlords are persons (this term includes individuals, companies and trustees) who have UK rental income and a ‘usual place of abode’ outside the UK. Letting agents do not have to deduct tax if HM Revenue & Customs tell them not to. HMRC will tell an agent not to deduct tax if non-resident landlords have successfully applied for approval to receive rents with no tax deducted. But even though the rent may be paid with no tax deducted, it remains liable to UK tax. So non-resident landlords must include it in any tax return HMRC sends them. We recommend that landlords apply for approval as soon as they know they are likely to fall within the scheme.

07. Landlords' obligations

Insurance

Landlords need a specialist landlords’ buildings insurance policy when letting a property that also covers their contents - e.g. carpets, white goods and furniture. Landlords should also consider rent guarantee and legal expenses cover and emergency assistance insurance. We can recommend a specialist insurer who assists thousands of landlords every year but because our Intirely Let and Intirely Managed services include comprehensive rent guarantee and legal expenses cover at no additional cost, our landlords have one less thing to worry about.

Licensing for shared housing

Certain types of shared housing, ‘Houses in Multiple Occupation’ (HMOs), have to be licensed under special local authority rules requiring that the property must meet additional fire and electrical safety standards. The legislation sets a limit to the number of occupants in a property and the size of an HMO determines whether you need a licence. This varies between councils so it’s important landlords check with their local council to see whether the rules are applicable to their property.

Mortgage consent

If you are letting a property, including your own home, you should have a buy-to-let mortgage in place. Buy-to-let mortgages are similar to residential mortgages except the interest rates and arrangement fees can be slightly higher and most lenders will only lend up to 80% of the loan to ratio value (the property’s value as a mortgage). When deciding whether to give you a mortgage, lenders consider your credit history, the property’s value and the likely rental income. They will typically expect the monthly rental income to be up to 20% higher than the interest payable.

Leasehold consent

Landlords who own apartments are required to inform the freeholder of their plans to let the property, as freeholders may prohibit certain types of lettings. Landlords should check their lease agreement carefully for any such restrictions.

08. Why use an agent?

Comprehensive marketing

Finding good quality tenants can be exhausting, time consuming work. Leading letting agents attract thousands of potential tenants by giving their landlords’ properties maximum possible exposure. Leading agents should have their own website dedicated to lettings. Increasingly, tenants use the internet to find properties. Without comprehensive online property details, high quality photographs, floorplans and printable brochures, there’s a chance your property might get overlooked.

The days when tenants would search agents’ shop windows for properties are quickly disappearing. In today’s fast-paced market, properties listed with agents that have a significant online presence barely hang around for hours - let alone days. Therefore, it’s important to understand how your agent intends to market your property. Agents who only channel limited resources to lettings might simply put a sign up outside the property, place a small ad in their shop window and post property details on a couple of internet property portals. Other agents, with more resources, are likely to reach the mass market by being on all the leading internet property portals.

We have one of the most technically advanced and comprehensive agents websites in the UK and advertise our landlords’ properties on the leading internet property portals including Rightmove, Globrix, Primelocation, Propertyfinder, Findaproperty, Hot Property, UK Property Shop and Property Live. The end result is a faster let at the best possible price with minimal rental voids.

Thorough referencing

Finding good quality tenants means conducting thorough and comprehensive reference checks. Leading letting agents will use a referencing company to verify the status and background of each applicant. No stone should be left unturned to ensure that applicants are who they say they are and are capable of paying the rent for the duration of the tenancy.

We use a leading independent specialist referencing company, to rigorously vet and qualify each and every applicant. They verify the applicants’ credit, employment and income status and then conduct bankruptcy, ID and county court judgement searches. We also obtain references from previous landlords and only recommend the very best applicants to our landlords. Our referencing standards are stringent because when it comes to your property, there’s no room for error.

Accurate tenancy agreements

Legislation and tenancy laws have had a significant impact on tenancy agreements. It takes an expert to know how to reflect the scheme and workings of English law within each document; from standard six monthly Assured Shorthold Tenancies (AST’s) to Non-Housing Act Agreements and Premium Leases. We are experts in drawing up legally binding and accurate tenancy agreements to give our landlords the very best when it comes to protecting their property and income stream.

Legal guidance

With so much red tape and legislation governing the industry, landlords face a minefield of legal responsibilities. These responsibilities range from protecting tenants’ deposits to producing gas and electrical safety certification. Breaches of certain types of legislation often have criminal sanctions attached including fines, imprisonment or both. Therefore, it’s essential all the relevant procedures and laws specific to your property and tenancy are followed. Knowing that you can trust your agent to get it right is crucial. Because we are specialists in our field, we can identify and guide you through each and every piece of legislation that applies to your particular property and unique situation.

09. Choosing an agent

A regulated agent

All good lettings agents are recognised by the leading professional bodies governing the industry. These bodies ensure that agents abide by a strict code of conduct, have the appropriate level of mandatory professional indemnity insurance in place should things go wrong and have the relevant industry experience and qualifications. They also ensure agents protect their clients’ money in a secure client account. Placing your trust and property in the hands of an unregulated agent is high risk so using an Association of Residential Letting Agents (ARLA) registered agent is strongly recommended.

We’re fully accredited members of ARLA as well as The Property Ombudsman for Lettings (TPO) and the Deposit Protection Service (DPS). We’re also registered with the Information Commissioner’s Office in accordance with the Data Protection Act to guarantee our landlords’ and tenants’ details are kept secure, treated with the strictest of confidence and not shared with third parties.

A specialist agent

While other agents are busy providing a plethora of property services, specialist letting agents can spend all day every day doing one thing; focusing on helping busy landlords let their property in the shortest possible time at the best possible price. It’s important you use an agent that is not a ‘Jack of all trades’ and is an expert in lettings. Many letting agents work alongside estate agents and, in many cases, the same individual will also deal with property sales, auctions - and everything else related to their industry! While choosing an estate agent can seem reassuring, particularly if they are part of a national brand, landlords can receive a better more individual service from a specialist letting agent. Often, estate agents only have one or two desks dedicated to lettings and with lettings internally viewed as the ‘poor relation’ to sales, they prefer to concentrate on sales where the fees are much higher. Agents who mainly deal in sales are used to short-term relationships with their clients and may not have the experience needed to offer the long-term, quality, customer-focused service so essential for lettings.

An honest agent

By the time you’ve factored in all the ‘hidden costs’, like inventory fees, deposit protection and tenancy agreement fees, comparing costs can be an arduous task – and let’s not forget the other add-on’s like safety testing fees, EPC costs, and set-up and renewal fees. We recommend that you use an agent who doesn’t try pulling the wool over your eyes. They should be happy to answer all your questions clearly and be upfront and honest about their fee structure, services and procedures. All the paperwork should be transparent and easy to follow.

If an agent is making commissions, or getting kick backs from maintenance companies and other suppliers they use, but passing the full cost on to you, they must disclose this fact to you in writing by law. Also, where an agent uses their own maintenance company or division to carry out chargeable repairs on your property, it’s questionable whether the price paid for the repair is actually the fair market rate. It’s prudent to check that the agent is not profiting from you twice for the same work i.e. once for organising the repair (the cost of which should be included in the management fee) and again for the actual repair.

You will find honesty and clarity form the cornerstone of all your dealings with us. Our all inclusive fee structure is simple to understand and we guarantee that there are no ‘hidden costs’. We make it our business to always tell you the truth. We only use trusted independent contractors to carry out work on our landlord’s properties - and we get no kick backs, and make no profits from using them. We do, however, benefit from goodwill and preferential rates which are directly passed on in full to our landlords.

For more information on lettings feel free to contact us.

Disclaimer and copyright. Whilst we have covered many areas of lettings, this guide is by no means comprehensive. Therefore, this document should not be relied upon as a basis for entering into any transactions. Whilst the facts have been checked, Intire take no responsibility for any damage or loss suffered. The information contained in this guide cannot be reproduced without our consent.