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Good Landlording

By: Suzanne Smith and Richard Jackson
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  • Summary

  • A weekly podcast co-hosted by Suzanne Smith and Richard Jackson, who discuss practical tips to help you start, grow and succeed as a landlord.
    © 2024 Good Landlording
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Episodes
  • GL#7: How to manage rent arrears

    GL#7: How to manage rent arrears
    May 22 2024
    In this week's episode of Good Landlording, we discuss one of the most difficult aspects of our jobs as landlords, and that's handling rent arrears. Rent arrears are challenging, even if landlords use an agent. The essence of the agreement between a landlord and a tenant is that the landlord provides a well maintained and legally compliant property to live in. In return, the tenant pays rent. If tenants don't pay the rent when it's due, they are in what's called rent arrears. Private landlords run a business and need to be paid the same as any other business that doesn't receive government funding. Being a good landlord doesn't mean you're a charity and you need to provide the property free of charge. If we don't get paid, we can't pay our bills, and may end up going out of business. However, there's a lot landlords can do to help tenants who start to fall into rent arrears. Managing rent arrears is something that all landlords need to understand, so we can minimise the risk of rent arrears, and know what to do if our tenants fall behind with their rent. Richard Jackson and Suzanne Smith share practical tips to help landlords avoid rent arrears, what landlords should do if tenants do fall behind with their rent, and how to help tenants. We also go through options are for evicting tenants in rent arrears both now and when the Renters Reform Bill comes into force. Eviction should be the last resort for landlords, if everything else has failed. What we cover in this episode at a glancePractical tips for landlords to minimise the risk of rent arrearsWhat should landlords do if tenants are in rent arrears?Practical tips to help tenantsWhat is Breathing Space?Late payment processThe last resort: Evicting tenants because of rent arrearsUsing Section 21 Housing Act 1988Using Section 8 Housing Act 1988The new Mandatory Ground 8A in the Renters Reform BillGolden nuggetCredits >> Submit a question: Click here for question form Practical tips for landlords to minimise the risk of rent arrears Prevention is better than cure, and landlords should try to avoid tenants falling into arrears in the first place. Here are 7 practical tips to minimise the risk of rent arrears: Tenant selection. Choose tenants that can comfortably afford the rent. For more information, see Episode 1: What makes a good tenant? Choose the rent payment date carefully. When entering into a new tenancy agreement, ask the tenants when they would like to pay the rent. The best date is shortly after they are paid. You can pro-rate the first payment so that if they move in on the 15th of the month, but want to pay on the 25th of the month, they pay the extra amount in their first rent payment. After that, they'll go onto the new rent payment date. OpenRent have a facility to calculate and set this up automatically for you as part of their RentNow package. Standing order. Ask tenants to set up a standing order so they don't forget to pay the rent. You can tell if they have done this as the rent payment will come in overnight, rather than in the daytime. Track rent payments. It's important to keep track of whether tenants have paid the rent. You can check your own bank account on the payment days, or automate it with (say) Alphaletz. The Alphaletz platform can send the tenant a reminder that the rent is due, and send a chaser if the tenant doesn't pay the rent on the due date. Rent guarantee insurance. Richard recommends taking out rent guarantee insurance for the first year with new tenants. If they are good payers and are never late paying, you can cancel it in the second year. Clarity with letting agents. Make sure it is clear what your letting agents are required to do for late or missed payments, ie who's responsible for chasing it up and then actioning it. Also, ask the agents to tell you if payments are (say) more 5 days late. Don't hope it will get better by itself.
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    Less than 1 minute
  • GL#6: What landlords need to know about rent

    GL#6: What landlords need to know about rent
    May 15 2024
    This week's episode is about a key issue for landlords: setting and increasing rent. Suzanne Smith and Richard Jackson kick off the podcast episode by discussing what the key rent indices say about what’s happening to rents now. Then they share tips about landlords should go about both setting rent at the beginning of the tenancy, as well increasing rent once the tenants have moved in. They also talk about how the Renters Reform Bill will change the way landlords will be able to increase rent. The episode is full of practical tips to help good landlords go about setting and increasing rent in a way that complies with the law and is fair to your tenants, but also recognises we’re running a business. What we cover in this episode at a glanceWhat’s happening to rents at the moment?The Good Landlording approach to setting and increasing rentHow can landlords increase rent?1. New AST for another fixed term2. By agreement2. Using a rent review clause3. Section 13 notice (Form 4)How will the Renters Reform Bill change the way landlords increase rent?Golden nuggetsCredits >> Submit a question: Click here for question form >> Join: The Independent Landlord Community private Facebook Group (landlords only) What’s happening to rents at the moment? The 3 major rent indices (ONS, Rightmove and Spareroom) all agree that the rental growth for the 12 months until the end of March was around 9% in England. According to Rightmove, the average number of enquiries has reduced from 13 to 19 a year ago, which compares favourable to the mere 5 enquiries in 2019. Rightmove point to affordability as the problem - there's only so many rent increases that tenants can accommodate. Rightmove also report that more landlords are having to reduce rents when advertising. 22% of advertisements are ending in a price reduction at the moment, which is a five-year high for this time of year, and is up from 16% a year ago. Price reductions, on the other hand, are now around the more normal percentage of the 23% in 2019. Spareroom data shows a number of postcodes in London where room rents are dropping: SW3 (Chelsea) saw the biggest drop of -11%, followed by 7% in E20 (around the Olympic Park). The Good Landlording approach to setting and increasing rent Private landlords run a business, and not a charity or subsidised social housing. That said, we want to charge a rent that’s fair to the tenants, and fair to the landlords. Costs have increased significantly for landlords over the past few years, and keeping rent at the same level is the same as reducing it in real terms, after taking inflation into account. Suzanne charges new tenants the market rent for the property. For in-tenancy increases with existing tenants, she keeps wage inflation as a guide, and tracks the market rent, but at a discount. She has kept rent increases to under 5%, but has always increased rent every year, apart from during Covid. It's important to avoid rent shock for tenants, when the rent suddenly increases in one go. It's better to increase it little and often. >> Blog post: The Independent Landlord: How to increase rent in 2024 How can landlords increase rent? 1. New AST for another fixed term Agents usually change the rent by issuing another tenancy agreement for another fixed term period, with new rent stated in the agreement. It's simple to do and means you can keep the AST up to date. 2. By agreement Rent can also be increased by agreement, ie via an addendum which both parties sign or a letter which the tenant counter-signs. It's possible to increase rent via email if the tenancy agreement allows amendments by email. 2. Using a rent review clause Often tenancy agreements include a clause that entitles the landlord to increase the rent each year by a set percentage or by reference to an index such as the Consumer Price Index. 3. Section 13 notice (Form 4)
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    Less than 1 minute
  • GL #5: When things go wrong with letting agents

    GL #5: When things go wrong with letting agents
    May 8 2024
    In this week's episode, Richard Jackson and Suzanne Smith discuss what landlords can do when things go wrong with letting agents, and how to make a complaint. It's the third in a series of three episodes on what landlords need to know about letting agents. While the vast majority of interactions with letting agents are positive, it’s important for landlords to know what options they have when things go wrong. Richard and Suzanne discuss how to make complaints to the letting agents and the redress schemes, and the additional protection that choosing Propertymark members provides landlords. The podcast episode also touches on complaints to Trading Standards and taking legal action in the small claims court. This episode follows GL#3: Guide to selecting good letting agents and GL#4: Tips for signing up with letting agents. What we talk about in Episode 5 on problems with letting agentsWhat are the most common complaints about letting agents?Keeping good recordsDifferent ways to make complaints about letting agentsInformal complaint to letting agentsFormal complaint to letting agentsRefer complaint to redress schemePropertymark members - extra recourseComplaint to Trading StandardsLegal actionGolden nuggetsCredits >> Submit a question: Click here for question form What are the most common complaints about letting agents? According to the Property Redress Scheme 2023 Annual Report, the top three categories of complaints about letting agents are holding deposits (presumably by tenants), poor service and management, and tenancy payments and rent collection. Here are other common causes for complaint by landlords: Poor communication and failure to provide information Inspections: failing to carry them out or not preparing a report after they do an inspection Signing up poor quality tenants Not arranging gas safety certificates in time when it’s not due to the tenant failing to give access. Repairs: not carrying out repairs promptly or properly, or overcharging Rent arrears: not chasing late payments properly and not keeping the landlord informed about rent arrears Failing to forward rent onto the landlord Keeping good records It’s important for landlords to keep good records of conversations with letting agents so it’s clear what has been agreed and what feedback has been given. Richard keeps his notes in the Alphaletz property management software so there is a record in the event of a dispute. Contemporaneous notes that are made at the time can provide excellent evidence if a complaint escalates into legal action, where “recollections may differ”. Different ways to make complaints about letting agents Landlords have three different routes to making complaints. The first is to make a complaint to the agent, which is then escalated to the redress scheme if the landlord isn’t happy with the outcome of the complaint. The second is to complaint to Trading Standards. The third is legal action. It is possible to combine one or more of these routes. >> Blog post: The Independent Landlord guide to resolving problems with letting agents Informal complaint to letting agents The first step is to make an informal complaint to the branch by speaking to the branch manager, and making clear where their service falls short and what action you expect. They might not know you’re unhappy and it might be a simple thing that can put right. You can speak to them on the phone or sit down with them in person. Even though this is informal, do follow it up by email so that there is a clear record. This will be useful if they don’t rectify the problem. If you don’t have written evidence, it's as if it didn't happen. Formal complaint to letting agents If the informal route doesn’t achieve the result you were asking for, the next stage is to make a formal written complaint to the letting agent. First ask for their complaints procedure.
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    20 mins
Management Economics Personal Finance
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