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Landlords – Five Fantastic Ways to Make More Profit

In this two-minute read, we look at five fundamental ways landlords in can make their rental properties more profitable.

Some people think the only way landlords can make more profit is to ruthlessly keep hiking up their tenants’ rent.

But that’s incorrect on two fronts. Firstly, continually increasing a tenant’s rent is no strategy to keep them long term. Secondly, the five ways we’re about to share with you can increase your bottom line without being mercenary.

  1. Review your mortgage rates – regularly: Start by lowering your biggest regular cost – your buy-to-let mortgage. It’s possible to secure a new mortgage six months before the end of your current fixed term. So, if any of your properties are coming up for renewal in spring 2022, start researching the mortgage market now.
  2. Look into going limited – Tax changes affecting landlords in recent years have meant many are putting their rental properties through a limited company. There are several tax advantages but it’s usually landlords with medium to large portfolios who benefit from this approach. A good accountant can advise you on whether this strategy would work for you.
  3. Keep good tenants – Another good reason not to hike up rent every time a rental agreement is up for review is that it can end up with good tenants moving on. A tenant who pays on time, looks after your property, and is respectful to others is valuable to a responsible landlord. A four-letter word that leaves landlords chewing their nails is …void. A void period where your property is empty eats into your profits like nothing else – long-term tenants help you avoid this and any other set-up costs.
  4. Let it go – Some landlords take the DIY approach to lettings and want to do everything themselves. And while this may work for some, others find all the legislation, tenant liaison, and dealing with issues time-consuming and costly. A good letting agent will take care of all that for you, allowing you to get on with your life and have time to look at other investment opportunities – which leads us onto the fifth point.
  5. Grow your portfolio – A competitive buy-to-let mortgage market and soaring rental demand creates more opportunities to grow a portfolio and in turn, increase profits across more properties.

We’re here to help landlords gain a better return on their rental investments. To find out how we do that, contact us today.

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Four Ways Planning Permission Adds Value to Your Home

In this two-minute read, we look at a question we often get asked at around the question of whether being granted planning permission adds value to a property?

The quick answer to this is nearly always a yes.

Here are four ways being granted planning permission can add value to your property.

Lofty ambitions – Adding an extra bedroom

A loft conversion that adds an extra bedroom, especially with an ensuite bathroom, can be reasonably expected to add up to 15% to your property’s value.

In some cases, loft conversions might not need permission due to something called Permitted Development. But ALWAYS check with a local architect first. Don’t rely on a quick Google search, ask an expert.

Possible value added: Between 10% and 15%

Create space by converting a garage

A garage has so much more potential than what it was initially built for. Converting it is a great way to add more living space to your home.

Possible value added: Between 7% and 15%

Side or rear extension

Extending to the side or rear of your existing home can often be done without planning permission. But again, it’s always wise to check with an architect and your local authority before you start anything.

This kind of extension creates a host of possibilities to add more square feet to your home, automatically adding value.

Possible value added: Between 10% and 20%

The big one – Converting a house to flats

Feeling ambitious? This grander type of design is one for people looking to maximise a property’s value.

Being granted planning permission to split a property into separate living accommodations is a brilliant way to maximise value. 

This gives you the option of converting it yourself and renting the flats out or selling the property with the granted permissions to a property developer.

Possible value added: Between 15% (conservative) and 40% (ambitious)

If you know you’re going to sell the property at some point in the short term (12–18 months), it’s possible that simply having the permission granted will add value to your home.

This is regardless of whether you’ve had the work done or not.

Selling potential

Selling a property that has been granted permission for improvements often attracts a broader pool of potential buyers.

And by creating this extra interest, you fuel demand which usually leads to more offers and a higher sales price.

And remember, it’s wise to contact a local architect to see how feasible your ideas are. We can recommend someone to you.

If you want an expert opinion on what kind of value gaining planning permission could add to your property, give us a call today.

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A Landlord’s Guide to Rent Increases

In this three-minute read, we look at the issues landlords should consider before raising rents.

The uptick in inflation, along with pressure on interest rates, means that many landlords will be considering rent increases right now.

Before deciding on a course of action, here are some points to consider.

Why would a landlord raise rents?

  • Rising mortgage and maintenance costs.
  • Tax and legislative changes that impact profitability.
  • Changes in the supply of and demand for rental properties in the local market.

When can a landlord raise rents?

It depends on the terms of the contract. Your tenancy agreement should clearly state how and when rents can be reviewed, and the notice period required for an increase.

It’s vital that you understand the terms of your contract and – unless you enjoy messing with lawyers and tribunals – abide by them.

If you’re unsure where you stand, contact us here at Nest in Essex for independent advice.

How much should you raise rents?

It’s a balancing act as an OTT rent hike could cost you more in the long run.

To hold on to top tenants and enjoy good returns, do your research and play fair.

Look at what other landlords are charging for comparable properties. Be honest about the condition of your property and determine your price accordingly.

Telling your tenant

Be upfront and start the conversation sooner rather than later. That way, your tenant will have time to adjust to the idea and budget accordingly. Always serve written notice within the required notice period.

What if my tenant is unhappy?

Explain that you’re facing rising costs and talk about any improvements you’ve recently made to the property.

If a tenant is happy and settled, they’re unlikely to bother with the expense of moving if a rise is reasonable.

If your proposed rise causes a stir, make a judgement call. Weigh up the costs of finding a new tenant and the risk of having the property sitting empty against the extra income you stand to make.

Look at the big picture. If your tenant is a keeper, consider negotiating. If you’ve had issues with them in the past, maybe it’s time to part ways.

Where problems occur

Issues arise when:

  • A landlord is missing in action for a couple of years and then springs a massive hike on a tenant to make up for lost time.

  • The rent is set too low initially, and the landlord tries to play catch-up by introducing a big hike when they can.

  • Tenant/landlord relations are so poor that rational conversation isn’t possible.

  • A landlord doesn’t understand their contract and tries to bulldoze through a hike at the wrong time.

To avoid these issues:

  • Get professional advice from an experienced letting agent so that you set the rent at the right level the first time.

  • Have a long-term rental strategy. Some landlords, as a rule, increase rents incrementally every year or two to cover rising costs.

  • Ensure your contract is watertight and that you understand it.

  • Communicate regularly with your tenant. If you’re time-poor, a letting agent can do it for you.

For advice on formulating a long-term rental strategy, get in touch with us here at Nest in Essex.

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Why You Should Prepare Now for a Post-Christmas Sale

In this two-minute read, we look at why getting the marketing material for your property sale finalised now is a savvy move.

There’s one day of the year when the stars align for sellers and it’s not too far off.

If you’re planning on selling up anytime soon, you’d be mad not to capitalise on this opportunity.

Keep reading to find out more.

Behold the Boxing Day home hunters

You may think the festive season, with its public holidays, boozy lunches, and family gatherings, isn’t a great time to take a property to market – but you’d be wrong. 

Internet traffic booms on property portals on Boxing Day. 

Zoopla, for example, recorded a 70.5% spike in activity on 26 December last year. And Rightmove and the rest of the portals report similar surges.

Why? On Boxing Day, people have time to think about their future and look at what’s on the market.

But that’s not all

Importantly, those who are perusing property portals on Boxing Day are motivated to move.

Christmas sets all sorts of big life decisions in motion. Some couples decide to cement a relationship by moving in together; others conclude that it’s time to part ways.

Meanwhile, some families recognise that they need more space, while others admit it’s time to downsize.

With this pool of keen buyers, you’d think there would be an abundant supply of sellers. But surprisingly, many people delay putting their property on the market until the New Year.

This means the savvy sellers who get their act together in time for Boxing Day enjoy maximum exposure but less competition – it’s a win-win.

Do something now if you’re serious about selling

Before you put your Christmas decorations up (they’ll date your marketing photos), get your ducks in a row now.

Choose your agent (perhaps one who has suggested such a smart move like getting ready now for all those Boxing Day home hunters?) and organise your property’s paperwork.

Leave the photos, floorplans, and marketing strategy to the agents.

Then enjoy the run-up to Christmas, knowing you’ve done the hard yards and that you’re not missing a trick.

With everything in place, you can simply tell your agent when to launch your property to the market to bring it to the attention of all those serious, post-Christmas buyers.

To find out more about this way of making the most of a great window of opportunity, contact us here at Nest in Essex

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How to Win at Playing Finders Keepers When It Comes to Great Tenants

In this three-minute read, we look at how landlords can find and keep terrific tenants.

‘Finders keepers, losers weepers.’ It’s a timeless rhyme used every day in school playgrounds and all over the UK.

It often applies to someone finding something that’s unowned or abandoned. But it also resonates with local landlords when it comes to having the second most important piece of the rental puzzle – great tenants.

Finding these excellent tenants is one thing. Keeping them is another. And some landlords lose these precious people because of basic, unnecessary errors. It’s enough to make a good landlord weep.

But put the tissues away because here are seven ways you can win at Rental Finders Keepers.

  1. Use a good letting agent. Earlier in this article, we mentioned that tenants were the second most crucial piece of completing a rental puzzle. The first? Well, in our opinion, it’s an excellent letting agent. That’s not because we are one, by the way. It’s because, over the years, we’ve seen countless landlords go down the DIY route to managing their properties and getting themselves in a stressful and expensive muddle. Look for agents with experience, testimonials, industry qualifications, and a clear plan on how they’ll market, manage, and maintain your tenancies.
  2. Know your target tenants. An experienced letting agent will be able to advise you on who your property will most appeal to. Is it a growing family, young professionals, or a retired couple? Knowing this will help with the next ultra-important step.
  3. Marketing matters. Perhaps the biggest error DIY landlords make is not taking the marketing of the property seriously enough. You are ‘selling’ an expensive product after all. This is why photography, property descriptions, and online advertising should be handled by professionals who do it day in, day out. The better your property’s marketing, the better calibre of tenants it will attract – giving you more choice when it comes to the next step.
  4. Setting the rent. By knowing your target tenant, marketing correctly, and listening to expert advice, you’ll be able to set your rent at the right amount. A correctly priced rental (not too cheap or expensive) will attract more interest and ultimately, more offers from quality tenants.
  5. Be prepared for questions. Good tenants tend not to just turn up at a property and say: ‘It’s great, where do I sign?’. It’s a big decision for them, and they’ll have questions such as ‘What council tax band is the home in?’, ‘What are the parking arrangements?’, ‘Are utilities included in the monthly rent?’. Remember, when it comes to the best tenants, this is a two-way selection process as they are savvy enough to research the rental market, so you’ll also need to make a good impression on them.
  6. Check them out. A tenant worth having will have no issue going through a referencing process. Here’s another area where a good letting agency reduces your risk of problems further down the line. Please don’t be shy about asking your letting agent for proof of the referencing process they’ve carried out, which should involve financial, employment, and past landlord checks. Skip this part at your peril.
  7. Keeping them. So, once you’ve found a great tenant, how do you go about keeping them? Well, this is an entire article in itself, but it would be along these lines: Be a good landlord by maintaining the property properly, dealing with issues quickly, charging rent fairly, and acting professionally.

At Nest in Essex, our job is to help landlords find and keep great tenants. To ask us anything about the rental market, contact us today.

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Seven Ways to Prepare Your Rental Property for Winter

In this two-minute read, we look at how landlords can make sure their rental investments stand up to the challenges of winter weather.

With winter officially only a few weeks away, the time is now ideal for landlords to take steps to ensure their properties are prepared for whatever December to February serves up.

By putting a winter property maintenance plan in place, you’re setting yourself and your tenants up for a trouble-free winter period.

Begin with boilers – The best time to service a boiler is in September, ahead of it being plunged into constant action in the months that follow. The second-best time to service a boiler is right NOW. By keeping on top of boiler and heating maintenance, you’ll save a lot of money and avoid hassle in the long run.

Remember your radiators – Bleeding your radiators is a simple, yet effective way of ensuring they are working as well as they should be.

Look at lagging – Frozen pipes that burst are the stuff of nightmares for any serious landlord. So, take the time to ensure pipes are wrapped in lagging to reduce the risks of freezing and potentially bursting.

Go to guttering – Don’t wait until the weather turns before you clean out your gutters. Blockages can build up over time and slowly cause unseen damage.

Insulate everywhere – Insulating a loft is an excellent way of keeping the warmth in and the heating bills lower. But don’t forget that even insulating against draughts can be a small way of making a big difference to how warm a property feels.

Fix that fence – The stronger seasonal winds love claiming a poorly maintained fence as one of its victims. So, act now to ensure any weak spots in your fencing are ready to stand up to whatever the winter winds throw at it.

Check it out – If your property is vacant for any sustained period over the winter months, diarise weekly or fortnightly visits to it to keep an eye on things. If you can’t do this, then it’s the kind of thing a good, local letting agent can do for you.

Your rental property is an asset, and having happy tenants is a key part of making the most of it, so take the time and spend the money on creating a safe, comfortable home for them this winter.

And don’t worry if you’re not a Handy Andy or a DIY Diana. At Nest in Essex, we have good working relationships with maintenance people who can do all the work for you.

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Things to Do Before Buying a Run-Down Property

In this two-minute read, we give you a quick checklist to make sure your project is as pain free as possible.

Got your eye on a property that needs some major TLC? Whether a rental investment or a new home, there’s lots to consider when buying a run-down property.

Finances

First things first, is the property mortgageable? Or is it so run-down that no one will lend you money? If it’s the latter, you may have to think of other financing options such as a bridging loan (a short-term loan), cash (if you have the money available), or a joint venture (if you have an investment partner).

And while we’re talking money, before exchanging any contracts, you need to budget, budget, and budget again. A property renovation is costly at the best of times but restoring a dilapidated property can feel like a black hole of endless expense. Make sure you set yourself a sensible budget and have a contingency fund in case of unexpected costs.

Survey

Getting a surveyor to inspect a potential property seems obvious, but when buying a run-down property, you’ll need more than a basic condition survey or HomeBuyer report. To be extra safe and to understand exactly what you’re buying, organise a Building Survey. This will examine the structural make-up of the property and make recommendations for repairs and potential costs. Don’t skimp on this stage of the purchase, as a surveyor can uncover issues you weren’t aware of and save you thousands of pounds.

Planning permission

If you’ve got plans to extend your doer-upper, be sure to do your research. Some properties are sold with planning permission while some benefit from permitted development. If your purchase has neither, keep in mind that planning is a time-consuming (and expensive) road to travel. This could hold up your renovation dreams, so you need to get the process started as soon as you exchange.

Top tip: Look at neighbouring properties to see what type of extensions have been given permission in the past.

Quotes and professionals

Whether you’re hiring a contractor to manage the renovation or want to project manage yourself, get the right team on board. Meet different builders, ask lots of questions, and make sure you outline exactly what you want done. Heed professional advice, they know what they’re doing. You may also need an architect’s advice and it might be worth speaking to the local planning department for extra information.

To find your dream restoration project speak to us a Nest in Essex.

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The Silent Killer: Carbon Monoxide Poisoning Explained

In this three-minute read, we examine the dangers posed by carbon monoxide.

We recently read a statistic about private landlords that left us scratching our heads.

A whopping 56% of private renters say they live in a property that doesn’t have a carbon monoxide alarm*.

Can such a high percentage of landlords really be ignoring safety advice and flouting regulations on carbon monoxide alarms?

By law, landlords must have:

  • At least one smoke alarm installed on every storey of their rental property which is used as living accommodation, and
  • a carbon monoxide alarm in any room used as living accommodation where solid fuel is used – after that, the landlord must make sure the alarms are in working order at the start of each new tenancy.

Many experts also recommend having an alarm near a gas appliance (such as a boiler), although this is not a legal requirement.

These rules are there for a good reason – carbon monoxide poisoning can cause severe illness and even death. There’s no excuse for complacency.

How is it made?

Carbon monoxide is a by-product of burning fossil fuels. When fuels like gas, oil, charcoal, wood, or coal fail to burn properly (a process called incomplete combustion, caused by a lack of oxygen), carbon monoxide is produced.

Exposure to it is hazardous to humans and animals.

Detecting it

You can’t see, smell or taste it; hence its nickname, the Silent Killer. To keep safe, you need to ensure carbon monoxide alarms and fuel-burning appliances are in good working order.

Good ventilation is crucial, too. Blocked flues and chimneys are problematic, as are poorly fitted flues. 

Other warning signs include: 

  • Black or brown stain marks around heaters and fireplaces. 
  • Pilot lights on gas appliances that extinguish regularly or burn yellow (they should burn blue).
  • Flames that burn yellow or orange.
  • Excessive condensation in a room where there is a device that burns fossil fuels.
  • Excessive soot.

Symptoms

Signs of carbon monoxide exposure include vertigo, tiredness, nausea, headaches, chest pains, and blurred vision. The affected person may slip into a coma and then die. The NHS says 60 people die from carbon monoxide exposure every year.

Keeping your tenants and property safe

Landlords should:

  • Brush up on the regulations and install carbon monoxide alarms where required.
  • Ensure working fireplaces are serviced and swept by a competent person.
  • Have gas appliances regularly serviced by a qualified engineer.
  • Check any carbon monoxide alarms in the property are working when the tenant moves in (note this in the check-in inventory). 
  • Ask tenants to test carbon monoxide alarms regularly.
  • Test carbon monoxide alarms during mid-tenancy inspections. 
  • Endeavour to avoid cowboy builders who could bodge boiler and flue installations. 

For more advice about keeping your tenants safe and staying on the right side of the law, contact us here at Nest in Essex.

*According to a survey by property software company Plentific.