Investment Spot of the Day

New Windsor Terrace, Falmouth

For Sale through Kimberley's at £185,000

Click the link: http://www.rightmove.co.uk/property-for-sale/property-32801022.html#


This three bedroom end of terrace is situated just off Killigrew Street and a few hundred metres from The Moor side of town.

It is an area popular for student letting but is equally appealing for families that want to be close to town, King Charles and Marlborough Rd Primary Schools.

As a 3 bed student let you are likely to get a return of at least £11,000 PA. This equates to a gross return of close to 6% on investment assuming you pay the full asking price.

A conventional family let should secure £775PCM/£9300 PA. This equates to a gross return of just over 5% on investment.

In the last year the Zoopla House Price god suggests that prices in the immediate postcode have risen by 4.5% (in the region of £7700). The property has a registered EPC rating of
E 41.

Is your Tenant Mad, Sad or Bad?

This is Part Two of a series of three Blogs where we look at dealing with Tenants and Tenancies that have perhaps turned sour. In Part 1 we looked at avoiding problems. In this Blog we look at practical solutions when problems present themselves.

You have picked a lovely tenant and all is going well, then suddenly there is a problem. What then? In these circumstances tenants usually fall into three categories. They are either mad, sad or bad. How they are depends on the solution.

 

The Mad Tenant

 

 

This is the tenant that is unhappy or even angry. They see a fault, and they perceive the problem lays either in the property and critically a failure by you Mr/Mrs Landlord to address it.

 

You can stand on your high horse, huff and puff and do nothing or you can be pro-active. Sort the problem out! Spell out what you are going to do and when you are going to do it. Most people (tenants included) are reasonable decent people. Don't let a small thing fester for a few quid. It will always develop. A small gesture – bottle of wine, pizza vouchers can go a long way to getting things back on an even keel.

 

We all have our own moral codes that determine whether we believe we being reasonable or not. You might think that you are being reasonable but you may not be. Share your dilemma with the most reasonable person you know. Talk to an agent about your issues, try and be objective with the facts. Most good agents will give some time up to talk you through how they might resolve something.

The Sad Tenant

 

 

Tenants and tenancies do not usually start off with things going wrong. The most common trigger for this is some sort of personal or family trauma. Losing a job, a failed marriage, an illness or bereavement are all part of life. Your tenant will be affected by it and either the care of a property or failure to pay the rent maybe symptom of the trauma.

Get to know your tenant. Check on them with a quick phone call once a month. Formally inspect the property within the first six weeks and every three to four months after this. I'm not suggesting be best buddies but be communicative, show them a human side, show them that you care and you may find that this is reciprocated in a time of stress and trauma. If they can’t pay and you value the tenant, then agree a payment plan. If the tenant is not looking after the property because they are spending hours at the hospital? Knock £50 off a month and use this for the occasional cleaner or gardener. I'm not suggesting for one minute you lose all senses and forget you are in it to make money.  Make a benevolent gesture sure, but make a decision because it is prudent to do so. Don't lose sight that your tenant is part of your investment because he/ she is in your property.

Bad tenant: Is your Tenant one of these? …….

A tenant that is a ‘rotten apple’ is the most difficult kind. You have tried to resolve a problem. You have worked with the tenant, perhaps shown empathy in the face of their personal adversity and they throw it back in your face. What do you do then?

 Don't lose your head but prepare for the worst as soon as possible. Even the most experienced landlord or agent will have experienced a bad tenant. You need to be on the front foot rather than let the problem take control.

 This approach depends on circumstance. There isn't a one size fits all solution. There is the practical and there is the legal. Be honest with yourself. If you don't feel confident here call in the professionals. A day or a week spent without direction is a day or week where you are no further to ‘lancing the boil’.

 

The PRACTICAL solution

1. If the tenants are in financial difficulty offer to release them from the contract early. Negotiate with them regarding their deposit and cut your losses. What's the point of trying to pursue people with no assets anyway?

2. You won't see this in the books and it can backfire but you could pay them off to leave your property. You could verbally offer them something and see their reaction. You could make them a without prejudice offer.  Make sure that you get them to put it in writing that they intend to give up the tenancy.

3. Offer to go to a mediator. Shelter or Citizens Advice may help here.

 

Alternatively  please contact us at  Rainbow Property

 

Next Week: Paul Beevers Director of Rainbow Property and Landlord and Tenant Solicitor will go through some legal options if your tenancy has gone badly wrong.



Investment Spot of the Day

Conway Road, Falmouth


For Sale through Miller Countrywide at £175,000

Click here to go direct to the agent:

http://www.rightmove.co.uk/property-for-sale/property-34070829.html

 

What could be a more straightforward investment than a 2 bedroom modern mid-terrace property?

It appears to be in good order with modern bathroom and kitchen, double glazing, gas fired central heating, bedrooms with built-in wardrobes and enclosed garden.

It is close to Falmouth Secondary School and St Francis and St Mary’s Primary Schools.

This should be a ‘bread and butter’ investment that is ready to go.

It should return £725 PCM giving a gross return of just shy of 5%.

 

The Zoopla House Price God indicates prices have risen 4.52% in the last 12 months.

You will have tenants queuing up for this one all day long……..

 

 

 

Landlords how to avoid problem tenants and save yourself time, money and grief.....

A Landlords biggest challenge comes when something goes badly wrong in a tenancy. The twin fears of a tenant not paying or not looking after a property can lead to a nightmare scenario of lost income, damage and stress. What does a landlord do then?

 

This blog is split into three parts because there is quite a bit to it. A damn fine read it won't be. It might just save you time, money and grief though!

 

Part One will look at how to avoid problem tenants in the first place.

 

Part Two will look at practical solutions to tenancy problems by asking "Is your tenant Mad, Bad or Sad?"

 

Part Three will look at legal solutions to tenancy problems

 

PART 1: Prevention of Problems is better than a cure. After all….

 

 

 

Talk about the blinking obvious, but the best way to deal with a problem is not to let them happen in the first place! This can be easier to achieve than it sounds, but only if you look out for the warning signs. This begins before the prospective tenant views the property the very first time you speak with the tenant. It continues right up to the point when they sign the contract.

 

As a landlord particularly those without the support of an agent, you have to a certain type of person. You have to be fair, open minded and compassionate. But you also need to have it within you to be objective, firm and sometimes selfish – yes selfish!

 

As long as you act within the law you decide the sort of person or family you are looking for, don’t be bullied or cajoled into doing something that makes you feel uncomfortable. The point at which you do this you are on a slippery path. Always remain in control.

 

How to remain in control

 

1.      Ask searching questions of your prospective tenant even before you allow them to view the property. A topic in itself for another day but think of it like going on a date. Be cautious from the outset. Who are they? What do they do for a living? Where are they renting currently? How long have they been in their current property? Why are they moving? What are their gardening skills like? What would their current landlord say about them? Are the kids under control? How tidy is their car? How well do they present?

 

If they are scruffy buggers or their car is like a tip, it might just be a warning sign!

 

2.      Vet your tenant thoroughly using an independent referencing agent. The cost of this is no more than £20 per tenant. It could be the best £20 you spend. After all you spent thousands on buying the property in the first place.

3.      Be wary of taking on tenants with bad debt and credit history. Tenants with a poor credit rating are not necessarily bad people. However play the percentage game and avoid unnecessary risk. If you do take them. Ask for a bigger deposit, 3 months rent up front or a Guarantor.

 

 

4.      Don't promise to do something straight away. Impulse decisions often lead to poor decision making. Give yourself some breathing space to decide whether you want to accept that dog, provide a washing machine, take a person on DSS and so on.

5.      Take personal references too. In small towns like Falmouth, Truro, Helston, Redruth and surrounds you may know friends of friends. Who your tenant chooses as their referee may tell you a lot.

6.      Use the power of social media as a tool to find out a little about your prospective tenant. Anyone can tell you what you want to hear – Facebook, Twitter and LinkedIn are incredibly useful resources. Often problems come from the tenants friends and hangers on rather than the tenant themselves. Does your tenant get ‘trollied’ three times a week? Have they just come out of a violent relationship? Are they happy in their current job? Answers to these are often obvious in the murky folds of a Facebook account or hidden behind a Twitter rant.

7.      Get a tenant to write and tell you why they want the property. Get them to send you pictures of how they live. The good ones that want your property will do this.

8.      If you are not sure about a prospective tenant then don't give them a contract. If you do give them a contract because you are ‘up against it’ make it 6 months.

 

 From a landlord’s perspective, if the letting process becomes unnecessarily complicated then don't be frightened to pull out. If your prospective tenants fail to pay you a deposit on time, are less than forthcoming with references, change the goalposts on the starting date, announce that granny is moving or they have a pet etc. these are warning signs of a tenancy that is unlikely to be plain sailing! My advice is to withdraw your offer and go back to the drawing board by looking for a new tenant. It is far better to do this now, rather than have the nagging doubt once they are in.

 

There are lots of decent, fantastic,lovely, caring respectful tenants out there. It's the charlatans the ‘wrong-uns’ you have to look out for. They don't go around with labels attached – it is your job (and my job) to scratch below the surface.  What do you feel intuitively about them? Is that little voice telling you to beware? Take a friend along when you meet the prospective tenant. If there is a couple split them up and ask the same questions – they won't expect it but establish whether they are being consistent. Beware of fairy tales and sob stories. Think Little Red  Riding Hood, The Boy who Cried Wolf and Hansel & Grettle. They are Grimm Fairy tales in more ways than one...

 

 

Above all else Remember Prevention is better than Cure.

 

As one wise doctor once said….

 

“What fits your busy schedule better? Exercising one hour a day or being dead

24 hours a day?’

 

Exercise your right to be in Control!

 

 

Next Week: Is your Tenant Mad, Sad or Bad?