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The advantages of renting out your property as an HMO

Most landlords rent out their properties as a whole, but leasing your rental property as a House in Multiple Occupation (HMO) provides an alternative approach.

An HMO is a property rented to multiple households who share common facilities. A household can consist of an individual or members of the same family, which includes:

  • Married or cohabiting partners
  • Relatives or half-relatives
  • Step-parents and step-children

An HMO is considered small if it has at least three tenants from more than one household and large if it has at least five tenants from more than one household.

In an HMO, each household rents individual bedrooms and shares communal areas such as the kitchen or bathroom. Despite increasing rental demand, the number of HMOs in the UK has declined in recent years, making it an opportune time to invest.

So, what are the advantages of renting your property as an HMO?

Increased rental yield

Entering into multiple tenancy agreements with different households can result in a higher rental yield compared to renting out a property to a single household. Additionally, you can adjust the rental rates for different rooms to further increase your rental yield. For example, a master bedroom with an en suite can be rented for more than the smallest bedroom in the same property.

Strong demand in popular areas

HMOs offer a new rental option for young professionals and students seeking accommodation without the need for a long-term commitment. They provide tenants with a more affordable and flexible solution in popular areas.

Traditionally, individuals looking to rent would need to find roommates to afford an entire property, which can be challenging when relocating to a new city for work or education. In recent years, there has been a significant shortage of student accommodation in the UK. Consequently, HMOs have become increasingly popular in university cities to address this shortfall.

Converting an existing rental property into a HMO

Converting your existing rental property into an HMO requires time, effort, and careful attention to detail to ensure it meets HMO standards.

There are minimum room size requirements based on the number of occupants sharing each bedroom. Your property must also comply with safety regulations, such as installing fire doors.

You will need an HMO license if your property has at least four tenants forming two or more households. Some local councils require an HMO license for smaller properties as well, so you should contact your local council for more information.

Reduced void periods

A void period is the time between tenancies when your rental property is unoccupied. As a landlord, you will want to avoid extended void periods, as they can diminish your rental income, especially if you rely on rent to pay your mortgage.

Renting your property as an HMO can help minimise the duration and impact of void periods. Since an HMO is rented out by individual bedrooms rather than the entire property, it is less likely that the property will be completely empty at any given time. Additionally, you can include a clause in your tenancy agreement requiring the remaining tenants to cover the rent shortfall if one or more bedrooms become vacant.

How can we help you?

Interested in discovering the potential rental income of your property as an HMO? Book a complimentary rental valuation to explore your options with our knowledgeable team today by calling 01634 570057 or booking online.

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Landlords: why going fully managed could help you

We recognise that handling a property can become both time-consuming and costly. That’s why we suggest entrusting your property to a professional agent with a fully managed service.

Whether you’re a new landlord or a seasoned property investor of one week or ten years, there’s one thing we can all agree on: managing your property can be challenging. When renting out a property, the need to be accessible to tenants becomes priority. Many landlords and property investors find it challenging to manage multiple properties on their own, especially during busy seasons and holidays, which only adds pressure to these responsibilities.

How can we help you?

This is where a reliable letting agent can play a vital role. Our skilled experts at CR Real Estate can assist in saving you time by overseeing your rental property, handling financial paperwork, and dealing with tenant management.

We understand the significance of time, particularly during busy periods. Our lettings team are here to assist with tenant enquiries, maintenance issues, and much more with our fully managed service. Our expertise will allow you to enjoy holidays and day-to-day living without interruptions from tenants and issues. We offer regular check-ins on your property to ensure it stays well-maintained, which reduces the chances of unexpected expenses that might add extra stress.

From a financial standpoint, the benefits of opting for a fully managed property agent are clear. We can guide you through the complex landscape of property management and enhance your investment for optimal returns. By efficiently managing tasks such as rent collection and property inspections, we ensure your investment is optimised.

Compliancy made simple

The legal responsibilities facing landlords today have significantly increased compared to just a few years ago. Ensuring you’re well-versed in these matters is crucial to avoid hefty fines that could transform your buy-to-let aspirations into a nightmare.

Legislation is notorious for its constant changes, making it challenging to stay updated on all the details. Having a team of experts by your side is invaluable in today’s dynamic environment. As a reputable letting agent we stay informed about any regulatory changes impacting your property investment and present your options in a clear and understandable manner.

Finding tenants isn’t as easy as it once was

There have been significant changes in the rental market, including shifts in tenant expectations. While the demand for quality homes remains high in many areas, tenants are no longer willing to settle for subpar properties or inadequate landlord services. With rental costs consuming a considerable portion of people’s incomes, it’s understandable that they expect nothing less than what they deserve.

Additionally, the challenges in the property buying market have contributed to a ripple effect in the rental sector. Tenancy durations are extending, with many lasting four years or more nowadays. This increased commitment from tenants emphasises the importance of professionalism in attracting the best renters.

Opting for full management services ensures representation by a trusted name that tenants can rely on. This instills confidence in potential renters and significantly improves the chances of finding the right tenant for your property. Additionally, with experienced valuers and negotiators working on your behalf, you stand to secure the best rental price—a clear win-win situation.

Want to discuss your rental property and becoming fully managed?

Don’t hesitate any longer! Give yourself the luxury of time, savings, and a stress-free 2024 — all made achievable through the expert care of our property management agents!

Got a property or portfolio you’d like managed in Medway or any of the surrounding areas in Kent? We’re here to help! Simply get in touch with our dedicated lettings team to find out more about how we can help you become more hands-off with your investment.

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Our top tips to finding new tenants quickly

The surge in rental home demand has created an unprecedented situation where every home listed on the market experiences high demand. Consequently, landlords are faced with an elevated volume of rental applications to sift through in order to choose a suitable tenant. In this blog post, we will explore five effective strategies that landlords can use to speed up the tenant selection process. These tips will help increase the chances of finding the perfect tenant, and reduce the time and effort needed to do so.

Detailed property listings

Creating thorough property listings is one of the most important aspects when renting out your property. Dedicate some time to investigate the frequently asked questions about similar rental properties in Kent, and incorporate the responses into your property description. By proactively providing all the information upfront, including details like the number of bedrooms, available amenities, and proximity to local transportation options; you can assist potential tenants in assessing whether the property aligns with their requirements even before they express interest. This approach ensures that prospective tenants come prepared for viewings, saving valuable time for both parties involved.

Pre-qualify potential tenants

You can simplify the tenant selection process by pre-screening applicants. Prior to arranging viewings, request potential tenants to complete a pre-qualification form. This enables you to assess their eligibility for the property and understand their readiness to undergo reference checks.

This method reduces the risk of investing time in applicants who may not meet your criteria and allows you to focus your attention on those who have a genuine interest and a higher likelihood of successfully passing the reference checks.

Organise block viewings

Conducting separate viewings for every applicant can become a time-consuming and less efficient process, particularly when a property generates high interest. Instead, consider organising group viewings, wherein multiple prospective tenants are shown around the property in intervals of 10-15 minutes. This approach not only saves time for everyone but also creates a competitive atmosphere among applicants. Therefore encouraging them to make quicker decisions and submit their applications promptly.

Confirming attendance

Focus your efforts on confirmed viewings to reduce the likelihood of no-shows and to optimise your time. Prior to the scheduled viewing, send a reminder to the applicants and request their confirmation of attendance. By taking this approach, you can diminish the chances of last-minute cancellations and ensure that you are making the most efficient use of your time during each viewing.

Prepare your tenants for check-in

After you’ve narrowed down your pool of prospective tenants, assist your selected applicants in preparing for the next phase of the rental process by offering them detailed guidance, such as a step-by-step guide. This will help them grasp the requirements for a seamless check-in. This proactive approach not only minimises the need for extensive back-and-forth communication, but also demonstrates your dedication to delivering a positive rental experience.

Want to discuss your property?

We understand that as a landlord the surge in tenant demand can present opportunities and potential difficulties. If you’re feeling daunted by the prospect of securing a new tenant or if you’re interested in learning more about our comprehensive property management solutions in Kent, don’t hesitate to reach out to us by calling 01634 570057 or submit an online enquiry to our lettings experts.

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What’s happening with minimum energy efficiency standards and EPC ratings?

In 2020, the government revealed its intentions to raise the Minimum Energy Efficiency Standards (MEES) for the Private Rented Sector. The plans specified that private rented properties would be required to achieve an Energy Performance Certificate (EPC) rating of C or higher by 2025 for new tenancies, and by 2028 for existing tenancies.

Are landlords ready for changing Minimum Energy Efficiency Standards?

Recent data indicates a gradual enhancement in the energy efficiency of properties available for rent. As the number of properties with an EPC rating of C or higher has increased by 16% since January 2019.

Meanwhile, the number of rental properties with EPC ratings D to G dipped by 11%. These figures suggest that landlords are taking steps to either improve the energy efficiency of their properties; or becoming more selective with their investment choices.

A notable 61% of landlords say that they would not consider investing in a property with a rating below C. This shift in mindset demonstrates a change in priorities and an acknowledgement of tenants’ preference for higher-rated properties.

Will the new minimum standards be included in the Decent Homes Standard?

The A Decent Homes Standard in the private rented sector consultation outlined the suggested measures to implement the Decent Homes Standard in the private rented sector.

This standard is anticipated to be implemented in conjunction with the Renters (Reform) Bill. According to the consultation proposals, one of the criteria, criterion D, requires homes to offer “a reasonable degree of thermal comfort.”

In the House of Commons Committee report on Reforming the Private Rented Sector, a recommendation was made to incorporate the Minimum Energy Efficiency Standards (MEES) into criterion D of the Decent Homes Standard. This suggestion is regarded as a simple and modest simplification of the complex regulatory framework.

Currently, the Minimum Energy Efficiency Standard is not applicable to the social housing sector. Thus there is no necessity for it to be aligned within the Decent Homes Standard.

When will the increased standards be formalised?

The industry is still anticipating the outcome of the 2020 Energy Performance consultation. This will provide additional information regarding the requirements. Energy minister Andrew Bowie recently mentioned that the initial update for this year will merely consist of a summary of the responses received.

Earlier, the Telegraph reported that landlords would be granted until 2028 to comply with the updated energy efficiency requirements. However, there has been no official announcement to confirm this specific date.

What should landlords and agents be doing to prepare?

The present government guidelines for complying with the current MeeS regulations provide a list of recommended upgrades for landlords, along with their average costs. These upgrades encompass options such as internal or external wall insulation, draught proofing, solar panels, among others.

It is anticipated that the government will officially establish a cap of £10,000 on upgrade expenses. Allowing landlords to seek exemptions if the costs exceed this limit. Various sources of funding are available for these types of upgrades.

How can we help?

Contact our expert lettings team today to discuss your property and how we can help you with these changes.

This article is intended as a guide only and does not constitute legal advice. For more information, visit gov.uk.

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How a lettings agent can make investment properties more profitable

Many landlords perceive that the cost of using a lettings agent might impact their profitability; however, it is quite the opposite.

Presenting a well-managed property with comprehensive professional oversight can directly improve your bottom line. There are numerous advantages to using an experienced agent, not least avoiding vacant periods.

How to boost your rental property return

We adopt several strategies as a leading independent Kent lettings agent to proactively increase landlord earnings.

Defined rental property marketing

Property in Kent is in huge demand, particularly with professionals and families.

The outstanding schooling and career opportunities; along with travel links and living standards continue to attract tenants relocating from across London and southeast; as well as prospective tenants from the nearby areas.

CR Real Estate are one of the leading and independently established Kent lettings agents, and we recognise that how we market a high-value rental property is vital.

With a central base in Medway our lettings team applies targeted marketing techniques to attract excellent tenants. This ensures that you receive a premium rental value for your property.

Comprehensive inspections and inventories

We endeavour to maintain a positive rapport with every tenant; and schedule inspections regularly, at your tenant’s convenience. This is to ensure that they enjoy every aspect of renting your residence.

This service means we can respond and act quickly when we need to organise work. Obtaining comparable quotations from respected local tradespeople; and identifying when there are possible issues that need to be addressed.

Attention to detail is an important factor in tenant satisfaction. This means that the vast majority of our managed properties benefit from long-term, sustainable tenancies.

Accurate rental price assessments

Rental properties that have been available for some time are often priced at a static rental figure; increased perhaps marginally over time. Many landlords undervalue their assets and could be earning a far greater value. This depends on each property’s location, quality, sizing, position, and unique features.

Our lettings agents will review your rent; determine whether this should be adjusted; and provide local insights to rationalise any recommended changes in the rental charge.

Securing tenancies faster, and for longer

Private tenants are more likely to rent a property from an agent. As they have the assurance that they will have a nearby point of contact to ask questions; and deal with an accredited, regulated organisation. This preference allows us to develop relationships to support tenants moving to the area from further afield; and pass these benefits onto our landlord clients.

We regularly have waiting lists of pre-vetted tenants looking for local properties. We can accelerate the process by matching tenants with newly available properties in a very short timeframe.

Reducing landlord’s ancillary costs

Over the years, we have cultivated a strong network of contacts, from insurance providers to maintenance companies.

When a property requires repair work or a landlord is looking for a competitive buildings insurance quotation, we can often recommend a provider that will offer a superior price point, thereby saving on property management costs.

Three common reasons that Landlords lose money

There are three primary ways that profits from a rental asset can begin to dwindle.

1. Tenant Liaison

Negotiation is essential; if you have a difficult decision to make, or disagree with a tenant about any element of your property or their tenancy. Disputes, late payments, conflicts and rental arrears are the prevalent cause of landlord losses.

2. Regulatory Mistakes

Over the last two years, there have been many legislative changes. This includes eviction bans, which you must comply with as a landlord. Tenants should be well informed about the regulations surrounding private tenancies; and making an error (even innocently) can be extremely costly.

3. Excessive Maintenance Expenses

All rental properties require general upkeep; but falling behind with gas and electrical safety checks or not inspecting a property until extensive damage has been done can incur large reparatory costs.

A lettings agent is responsible for finding high-quality tenants; but can also assist with managing legal obligations, keeping in regular contact with existing tenants; and acting to preserve the value and integrity of your rental home.

Risks of self-managing a rental property

Independent rental property management is certainly possible; but requires continual communications, assessments, and commitment to upholding property standards to retain the best tenants.

As every landlord will know, there are multiple business considerations to be aware of:

  • Setting up an appropriately compliant deposit retention scheme.
  • Following the correct processes to end a tenancy if required.
  • Conducting thorough inventory checks.
  • Organising end-of-tenancy property inspections.
  • Dealing with maintenance work.
  • Managing tenant queries, requests and potentially complaints.

There are now over 400 rules and regulations related to managing private residential rental properties. All in which include fines for non-compliance or breaches, even when unintentional.

The fundamental risk of self-management is that any one of these requirements is missed or lapses; resulting in financial losses and reputational damage.

Advantages of using an established local Kent lettings agent

Our lettings services depend on the support you require; and are always customisable. We have a management package to suit you; whether you’re looking to improve your rental property profitability or deal with specific challenges. We deal with everything from tenant searches, background checks and deposit management; to full ongoing control over collecting rent, liaising with tenants and ensuring your property runs smoothly.

CR Real Estate focuses on exceptional quality at every turn; commanding favourable rental returns for high-quality Kent properties. As well as providing a fantastic service for tenants looking for a beautiful new home. When correctly managed, we believe that many rental residences have the potential to be more profitable than they are.

For further information about analysing your rental rates, improving returns, and elevating the quality of your Kent rental assets; please get in touch with our Lettings Team for advice from the local specialists.

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How landlords can keep their properties occupied

Congratulations, you’ve decided to rent out your property! We know that this might be obvious but all landlords should try to keep it occupied at all times if possible. If you don’t, the mortgage, council tax and any other bills will be coming straight out of your own pocket and can mount up quickly.

In true Great British weather tradition it seems that the summer may have ended all too soon; with autumn and winter starting to creep in… It’s know in the property market that the colder months can be a hard time for landlords to find new tenants; but hopefully if you follow these tips you will never find your property unoccupied.

Use long term contracts

We’d advise to try and avoid six month contracts where you can. Having people come and go more regularly can be quite disruptive and one year contracts work much better for both landlords and tenants.

Once the contract is up, think about asking your tenants whether they would be interested in signing another contract. You don’t want to get into a rolling contract if possible; as it gives you less peace of mind, knowing they could up and leave at any time.

Think forward

Once you know that your current tenants are planning on moving out, try and visit your property as soon as possible to find out if anything needs fixing or replacing. Put the motions into place and get quotes for any new furniture or appliances; and book in contractors to carry out any work needed as soon as possible.

The best time to do up your property and give it a quick lick of paint is during the first week after tenants have moved out. This means the house will be available for viewings quickly, hopefully resulting in brand new tenants.

Look after your tenants

The easiest way to avoid an empty house is to look after your tenants as well as you can; after all a little kindness never killed nobody. This may sound obvious, but as a landlord it is easy to just ask tenants to sign a few contracts, hand over the keys and walk away.

However taking the time to build a relationship with tenants can go a very long way. It’s also important to try and solve any problems they may have as quickly as possible. That way if your tenants do move out, having a good relationship with them means you can ask them what the reasons behind their move are. If it’s something that can be changed you can do so before any new tenants move into the property.

Advertise

If you do happen to find yourself with an empty house, good marketing and adverts can make a world of difference when it comes to finding new tenants. It’s key to choose an estate agent that you trust and that lists their properties on major property portals such as Zoopla and Rightmove.

At Century Residential, our lettings team take pride in finding the most suitable tenant for your property in the shortest time possible. We understand how much your property means to you, so you can be assured that your letting will be handled professionally, efficiently and effectively. A large majority of our clients come to us through recommendations and that’s why client satisfaction and our reputation are immensely important to us.

Make it easy

The best way to get new tenants is to make it as easy as possible for people to find out about your property. We always try to work smart when booking viewings for our landlords; and always consider block viewing days, where we arrange for as many people as possible can come and look at it.

Need any help? Here’s our number 01634 570057

If you’re looking for help to not just list, rent out or manage your property, please come and speak to a member of our lettings team.

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A Guide to Letting Your Property

Becoming a landlord is not as easy as it may seem; there are several factors that need to be kept in check when you are letting a property. Letting a home involves a lot of preparation and requirements that as a landlord you must fulfil. At Century Residential, we like to give you the best information we can to prepare you for your future plans; so we have created an easy guide to help you.

Check with the lender if you’re on a mortgage

If your property is on a mortgage, you are legally bound to inform your lender about your plans to let the property. Some mortgages do not allow you to let your property; and other mortgages would require you to obtain a consent form before letting it out.

There are some instances where your lender may levy a fee or alter your interest rate when you want to let your property. So, the first and most important thing you must do as a landlord if your property is mortgaged, is to check with your lender about the rules and regulations that apply to your mortgage.

Decide on how long you want to let

Usually, corporate tenants tend to rent for two to three years; with the option to end the tenancy before the mentioned period if they wanted to. If you are looking to let your property for a shorter span, say about six months to a year; then you need to consider coming up with a competitive rent. This will ensure that the property is not left without tenants for too long. You will also need to consider your mortgage if you have one; as some only allow a tenancy for up to 12 months at a time.

Calculate your tax

If you decide to let your property, you are legally bound to inform HM Revenue & Customs as you will be liable to pay taxes. You will have to do a self-assessment tax return; and it may also affect the Capital Gains Tax when you decide to sell your property. You can take the help of a professional accountant, or speak to our lettings team who can connect you to the right people to help you.

Do the necessary renovations

First impressions matter. When you decide to let, make the property look attractive to impress any potential tenants. At the bare minimum, it is essential to declutter, repaint and clean the property before you let it. You can also do decorative and purposeful renovations if you are looking for a higher rental income. With over 200+ properties in our portfolio, we can advise you on redecorating your property for a quick let if you need any guidance.

Rental insurance

Finding the right rental insurance for your property is vital to cover any damage caused to the property or its possessions during the tenancy. While your tenant will be required to take contents insurance; as a landlord, you will have to invest in suitable rental insurance. This will be to cover the cost of the damages caused to the property, possessions in property, accidents or injury to the tenant, or any visitor to the property. It’s important to mention all the high-value items that you leave on the property; and pay the appropriate cover in order to claim any damages. It will also protect you from any loss of rent or breach of tenancy.

Safety checks 

It is mandatory to ensure your property is safe and secure before you let. The mandatory safety checks include a gas safety test, electrical safety test, and appliances safety tests. Smoke alarms must be fitted on every floor for the fire safety test. Only after fulfilling these tests can the property be listed to let.

Inventory list

We always recommend doing a complete inventory listing for all the items kept within the property to avoid any disputes when tenancies end. Appliances, furnishings and other items are mentioned in the tenancy agreement to keep track of your belongings while letting and at the end of the tenancy. 

Should you need any assistance, speak to our lettings team. They will be more than happy to talk you though how we can help you with this.

Finding the right tenant

We understand that being a landlord can sometimes be daunting; as it is quite challenging to find the perfect tenant. When the background checks are skipped, you might end up with unreliable tenants who skip or delay rent, cause damage to property, and more. It is essential to keep a solid background verification in place to select the right tenant who suits your requirements.

With so much to consider, landlords have quite a task when they decide to let their property. Proper documentation and finding the right tenant is the key to have a smooth tenancy. Remember, you can always get in touch with us to ease the process and help you through the relevant paperwork, whilst finding prospective tenants from our large database.

Contact us today

Looking to let your property? We’re on hand to help make the process as stress-free as possible. Call our team on 01634 570057 today to get started. 

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