Part 2 ~ Why Sell To Buy, When You Can Let-To-Buy?

Managing Your Property! (see Blog n News, Be The Best Landlord, 30th April 2010)

As we explored in Part One, Letting-To-Buy not only allows you the convenience of side-stepping any property sales-chain when wanting to relocate elsewhere but also allows you to enjoy increasing wealth through the rising value of your current house: wealth that someone else is paying for i.e. the tenant.

But, as this may be your first venture into LTB and becoming a Landlord, this article explores Who Does What? after you have acquired your Let-To-Buy re-mortgage on your current house.

Until you are completely comfortable with what you are doing as a Landlord, we recommend you engage a reputable Letting Agent who will guide you through the entire process educating you along the way. This relationship, should quickly ease your emotional involvement with a former home, allowing you and your family to enjoy extra income and capital growth over the medium to long term.
 
Remember, you may now be worth twice as much in property asset value than you were just a few weeks ago.   And, there is nothing stopping you from repeating this process again and again. 
 
The following check-lists help you to grasp your new role as a Landlord, as you learn how to manage your property portfolio for income and growth:

Who Does What?

The Letting Agent is there as your professional guide for as long as you need them. You pay him/her a fee, so expect to employ them gainfully, especially in your early months as a new Landlord.
 
The below is not an exhaustive list however, the agent will:

- Advise you on your legal responsibilties as a Landlord ~ including, staying on top of changing regulation (also see www.landlords.org.uk)

- Find your tenant ~ including, advertise, interview, accompany viewings and obtain employer and bank references

- Write up Tenancy Agreement ~ usually a 6-month, Assured Shorthold Tenancy Agreement (AST)

- Advise on correct insurances ~ (you pay the premiums) including, landlords void period and, tenancy deposit protection scheme 

- Arrange for gas and electric safety checks ~ usually annually including, obtaining appropriate certificates (your expense)

- Advise what white goods/furnishings will attract the better tenant ~ landlord rights are the same now for furnished or unfurnished tenancy

- Organize routine maintenance and repairs ~ including, annual checks of connections and appliances (your expense)

- Collect/distribute rents ~ from the tenant(s), less fees, to you

- Undertake inspection visits ~ usually twice a year or at tenancy changes

- Deduct their fee ~ fees are usually negotiable when you have several properties under management with the same agent but usually starts between 10-15% of the monthly rent

You should:

- Remove any items of commercial/sentimental value ~ expect to replace anything you leave behind every 3-5 years and, takes photographs and make full inventory of everything remaining

- Clean the property thoroughly ~ there are cleaning companies who will prepare for tenancy (surf Internet for Tenancy Cleaning)

- Organize the re-direction of your mail ~ the Post Office will advise: we suggest at least 12-months re-direction.
 
- Label stop-cocks and isolation switches ~ essential for the protection of tenant and property should there be a water leak or electrical fault
 
- Leave appliance instructions with copies of warranties/service contact numbers ~ in case of breakdown or emergency you don't want to be called out at three in the morning

- Ensure sufficient keys are provided ~ especially one for the Letting Agent

- Decide whether you shall engage a contract gardening service ~ for larger plots of land that require landscape management; you could add this cost as a Service Charge within the AST

- Open a dedicated cheque account with your bank ~ to receive your rental income(s) and pay your costs, bills and mortgage, keeping a clear audit trail

- Keep ALL receipts/statements ~ for maintenance, repairs, replacement of white good/furnishings and, mortgage interest paid or you can't offset expenses against your income tax bill

- Inform your Tax Office ~ usually via your first Self-Assessment Return as a Landlord
 
And, there you have it.

Let-To-Buy could be your answer to moving on without the drama and costs normally associated with giving up one property to acquire another: making you richer in the process.

In A Nutshell:

    * Release capital to buy your next home
    * Secure future capital growth on current house
    * As Cash-buyer you avoid the tangle of a property Sales-Chain
    * Deligated property management gives peace of mind
    * The tenant pays your let-property mortgage(s)
    * You enjoy excess rent over mortgage payments
    * You enjoy capital growth on your new home
    * You enjoy extra income in retirement from let-property as rents continue after the finish of mortgage payments
    * You will have a significant estate to leave to your heirs
    * You may add more BTL property to your portfolio as often as you like 

We hope you have enjoyed reading these articles and will capitalize on the messages within over the medium to long term. 

Do call or email us, any time, to discuss your property investment strategy: we are here to help.
 
You may download any Article from our website and will find them listed under Recent Blog Entries, on the right of the Home Page.  Call if you don't find one covering your questions.

For 25% Below Market Value property opportunities see www.bmvpropertyinvestmentdeals.co.uk

Leave a Comment

Name *
Email (not published)
URL
Code   
(all comments are moderated by site admin)

Submit Comment