Emerald Guide To Managing Residential Property

Watson David

Description

The Property Investors Management Handbook, Revised Edition, revises and updates the previous edition in the light of ongoing changes in the law and also practice, specifically changes to tax regimes and also how to take advantage of investment opportunities.

Sujets

• Droit et juridique

Informations

• Publié par: Straightforward Publishing
• Date de parution: 23 juillet 2020
• Nombre de lectures: 0
• EAN13: 9781913776237
• Langue: English
• Poids de l'ouvrage: 1 Mo

Extrait

THE PROPERTY INVESTORS MANAGEMENT HANDBOOK-MANAGING RESIDENTIAL PROPERTY
D AVID W ATSON
E DITOR : R OGER S PROSTON
Emerald Guides
Emerald Guides
Straightforward Co Ltd 2020
All rights reserved. No part of this publication may be reproduced in a retrieval system or transmitted by any means, electronic or mechanical, photocopying or otherwise, without the prior permission of the copyright holders.
ISBN: 978-1-913342-44-9 ePUB ISBN: 978-1-913776-23-7 Kindle ISBN: 978-1-913776-13-8
Printed by 4edge www.4edge.co.uk
Cover design by Bookworks Islington
Whilst every effort has been made to ensure that the information contained within this book is correct at the time of going to press, the author and publisher can take no responsibility for errors or omissions contained within.
C ONTENTS
Introduction
Ch.1 Deciding to invest in Property-points to consider
Ch.2 Developing Your property Portfolio-Costs
Ch.3 Finding Suitable property -Buying a property
Ch.4 Buying a property at auction
Ch.5 Sourcing Suitable Tenants and Management
Ch.6 What should be provided under the tenancy
Ch.7 Knowing The law
Ch.8 Understanding Rent and Sources of Rent
Ch.9 Repairs and improvements
Ch.10 Houses in Multiple Occupation (HMO S)
Ch.11 Taking back your property
Ch.12 Private tenancies in Scotland
Ch.13 managing the finances-tax and other issues
Useful websites-Glossary of terms
Index
Sample tenancy agreements and notices
I NTRODUCTION
The aim of the new edition of this book (updated to 2020) is to demonstrate in a clear and uncomplicated way the main considerations involved in developing and managing a residential property portfolio.
Although more stringent financial rules are deterring some landlords from investing in the rental sector and although it is getting harder for the would be landlord to gain access to the buy-to-let sector in the south east of England because of high prices, the opportunities for landlords to invest and make a decent return generally, in particular in the Midlands and North, are better than ever, with rents across Britain set to rise by more than 20% over the next five years and with more and more individuals and families moving into the private rented sector.
Coronavirus temporary law changes
At the time of writing, we are in the middle of the coronavirus epidemic, and quite apart from the effect on the general public, housing is affected across the board. Housing sales and rentals have just got underway again after a brief suspension. Would-be property investors and potential landlords need to be aware of the changes, however temporary.
In relation to the management of property, the government has warned landlords that they are still legally obligated to carry out urgent health and safety repairs. However, it clarified that non-urgent repairs should be done at a later date, as agreed between tenants and landlords.
The government issued the following the guidance: Landlords remain legally obligated to ensure properties meet the required standard - urgent, essential health and safety repairs should be made. An agreement for non-urgent repairs to be done later should be made between tenants and landlords. Local authorities are also encouraged to take a pragmatic, risk-based approach to enforcement. The government said it is committed to supporting landlords as well as tenants. The statement added: We have also agreed with lenders that they will ensure support is available where it is needed for landlords. Landlords will also be protected by a three-month mortgage payment holiday where they have buy-to-let mortgages. Landlords have been warned to take note of the upcoming Minimum Energy Efficiency Standard regulation coming into force on 1 April 2020. The changes mean properties where tenancies predate April 2018 have to have an Energy Performance Rating above E. When initially introduced in April 2018, all properties marketed for let were legally required to have an EPC (energy performance certificate) rating of E or above before the commencement of any new tenancies. However, the legislation will shortly be extended to also cover properties where current tenancies pre-date April 2018. Landlord regulatory requirements have not been relaxed during the coronavirus outbreak and financial penalties for non-compliance remain enforceable, with a potential fine of up to 5,000 per infraction. The government stated:
Landlords should make every effort to ensure they are meeting at least the new minimum standards despite the logistical challenges imposed by the outbreak.
It is vital to maintain open channels of communication with tenants to ensure that they are not vulnerable or self-isolating before proceeding with any essential work.
All court possession orders have been suspended with immediate effect. This affects mortgage holders as well as private and social renters across England and Wales. This will affect cases in the system as well as new cases for at least 90 days, though the timeframe may be extended.
A government statement said: Landlords will have to give all renters three months notice if they intend to seek possession (i.e. serve notice that they want to end the tenancy) - this means the landlord can t apply to start the court process until after this period. This extended buffer period will apply in law until 30 September 2020 and both the end point, and the three-month notice period can be extended if needed.
Tenants are still liable for their rent and should pay this as usual. If they face financial hardship and struggle to pay this, support is available.
In the first instance they should speak to their landlord if they think they will have difficulty meeting a rental payment, and in this unique context we would encourage tenants and landlords to work together to put in place a rent payment scheme. However we have also put specific measures in place.
Overall, private letting of residential property has grown significantly in the last 25 years. However, in some cases those who are involved in letting property do not have the professional knowledge needed to manage effectively and often end up in a mess. Little thought is given to the fact that a complex framework of law covers the landlord and tenant, defining the relationship between the two.
This book covers the acquisition, letting and managing of property in depth and should enable the landlord, or potential landlord to develop a portfolio of properties and manage effectively and efficiently, at the same time protecting his or her asset, whether it be a house, flat or House in Multi-Occupation.
Also included in this edition is a detailed guide to landlords tax obligations, including capital gains tax and advice on how to minimize liability. This book is essential reading for any landlord, or potential landlord and should prove to be invaluable.
****
C HAPTER 1
DECIDING TO INVEST IN PROPERTY-GENERAL POINTS TO CONSIDER
Investing in Property
The overall demand for private rented property is now stronger than ever, with the mortgage market restricted for purchasers and house price inflation, particularly in the south east, creating the need for high deposits which people cannot find. Lending has become far more stringent, owing to the banks unwillingness to loan money, particularly to property investors. Essentially, accessing finance has become a big issue. The banks favor those with large cash deposits. This is the same in the buy-to-let sector as for domestic mortgages.
However, if finance can be arranged then the yields that one can expect from buy-to-let properties are high by comparison, currently standing at 6% on average. Of course, this depends on where the property is located. See overleaf for tables indicating the best and worst buy to let areas in the UK.
A yield is a portfolio s annual rental income as a percentage of total value. The reason is that demand for private rented property is high, particularly as first time buyers cannot get a toehold in the market. They are instead turning to the private rental sector. Therefore, investing in property, for the longer term, as opposed to investing for short-term gain, is still a viable option.
Best and worst buy to let areas in the UK
Landlords looking for the UK s best buy-to-let areas in 2020 should consider Liverpool and the North East of England, as well as Scotland. (bear in mind that these figures change over time and you should carry out your own research before buying).

Liverpool s L1 postcode is currently the best place to buy-tolet in England, Scotland and Wales. It generates an impressive yield of 10 per cent, according to the new research. L1 is the main retail area, home to Liverpool One, as well as the commercial district and Chinatown
it s followed by Falkirk s FK3 postcode and Glasgow s G52 postcode in Scotland. They produced an average investment return of 9.51 per cent and 8.71 per cent respectively
the worst area for buy-to-let is in commuter town St Albans - its AL5 postcode produces a rental yield of just 1.95 per cent
Where are the best buy-to-let areas?
Sixteen of the top 25 postcodes are in the North West (predominantly Liverpool) and Scotland.
The North East also features prominently in the best areas for buy-to-let. TS1 and TS3 in Cleveland ranked fifth and twelfth respectively, while Sunderland features twice with SR8 and SR5, and Gateshead s NE8 is ranked eighteenth.
The majority of the strongest postcodes in Britain have a yield of around 7 per cent. These include Leeds LS2 at 7.92 per cent, Cardiff s CF43 at 7.61 per cent, Aberdeen s AB11 at 7.2 per cent, and Lancaster s LA14 at 7.06 per cent.
According to the research, here are the 10 best buy-to-let areas 2020:
Area
Rental yield
Liverpool, L1
10.00%
Falkirk, FK3
9.51%
Glasgow, G52
8.71%
Liverpool, L11
8.67%
Cleveland, TS1
8.50%
Kilmarnock, KA1
8.31%
Liverpool, L6
8.12%
Leicester, LE1
8.00%
Leeds, LS2
7.92