Deposit disputes- an overview

The Deposit Protection Service recently reported that a large number of both Landlords and Tenants fail to submit evidence on time when adjudication has been agreed to during a deposit dispute.  18% of Landlords and 23% of Tenants miss the deadlines clearly set out at the start of the process, or even worse, fail to submit any evidence at all.  If deadlines are missed the DPS will automatically find in the Tenants favour.  This may seem a little unfair but it needs to be remembered that the deposit is the Tenants money and the Landlord needs to prove why they have a claim on it which, in turn, the Tenant need to argue why they don’t!

The DPS clearly set out the process at the very start of the adjudication but these dates are set in stone.  Dealing with adjudication can be time consuming if done properly but it is worth doing thoroughly as you really only get one shot at this. 

Evidence is key – both photographic and written.  It is worth spending time putting together all the evidence that the DPS request and any additional, relevant information.  Try to make the adjudicators job easier for them by highlighting appropriate paragraphs, numbering photographs referred to in documentation and number and list all evidence provided.  Adjudicators look through several of these every day so you want to make sure they don’t miss anything pertinent to the case. 

If evidence is received it will be sent to the other side for their comments, once the adjudicator has glanced over it.  This is the last point at which you can comment or provide any further evidence.  It will then go through the full adjudication.

Remember – the adjudicators’ decision is final!  So spend time on getting the evidence right as there is no comeback!

If you want any advice on adjudication please feel free to ask.  This is something that we will cover in further blog articles.

A nice little earner!

I recently found this little gem on Rightmove:

http://www.rightmove.co.uk/property-for-sale/property-47922271.html

This would make a great little rental property.  The agent is suggesting a rental value of £775pcm but to be honest, we have several on this estate and they range anything from £750 to £850pcm, depending on the condition and specification.

I know I keep going on about ex council properties but, even on the figure of £775pcm, this property will offer you a yield of just over 6% which is about right for this area.

These properties always rent well, usually to families and most of our tenancies on this estate have all been long terms.  These properties appear to have been well built and will offer a good investment for years to come.

If you want any advice on good rental properties like this one, please pop in.

Which semi detached house should I buy in Andover?

A potential investor asked if they should buy a 3 or 2 bed semi detached property to rent out to tenants. The first question I asked them was what was are they looking for from the investment - capital growth in the property or a great yield?

Answering this question will help you figure out which properties you should buy...The average asking price of a 3 bed semi in Andover is £234,920 today compared to £202,535 for a 2 bed semi. The 3 bed semi achieves an average rental price of £940 per month compared to £780 per month for a two bed semi.

That’s a yield of 4.6% for the 2 bed against 4.8% for the 3 bed. So surely, the 3 bed semi is the better bet? Well it does offer a better rate of return, but a 2 bed semi is slightly easier to rent out (less void periods) and will be easier to sell in the future.  The main thing to remember if going for the 3 bed is always make sure that the third bedroom is of a reasonable size rather than just a box room as this can make it difficult to left. 

Pop into our office, call or comment below if you have any questions.

New to investing?

New to investing? – A few top tips

If you have made the decision that property is something you want to invest in as a buy-to-let Landlord there are a few important things you need to know before taking the plunge!

1.       Know your market.  Before you invest in a property, decide who you want to rent to.  Are you happy to rent to sharers?  Do you only want to rent to families?  If you are happy to rent to sharers then bedroom size is key.  Two sharers will want two double rooms whereas a family will take a house with two double rooms and one single but make the decision before you buy.

2.       Invest in kitchens and bathrooms.  These two rooms tend to be very important for renters.  If these rooms are a little tired look at re-tiling, putting in new worktops and changing cupboard doors if the units are sound.  Always make sure there is some sort of shower in the bathroom.  If either of these rooms need gutting and totally refitting don’t spend a fortune on it.  Don’t forget this is a business, not your home!  Put in units that are tough and durable but look good.

3.       Keep colours neutral.  To be honest, you can’t go wrong with good old magnolia.  That way it is easier to freshen up the property between tenancies.

4.       Specialist Landlord insurance.  You must take out specific Landlord insurance.  This is different from your normal buildings insurance in that it will also give you an element of liability insurance which hopefully you will never need!  Also, consider rent guarantee insurance, especially if you have a mortgage on the property.  Again, hopefully you will never need it!

5.       Use the services of a good agent!  Again, make a decision early on about whether or not you are happy to manage the property yourself or just want a tenant finding service.  Whichever it is, it’s always wise to use an agent as they will be able to reference any potential tenants very thoroughly (Find out more about referencing here).  This is likely to become even more important this year with new laws being bought in about identifying overseas tenants – more on that soon!

Keep an eye on our blog for more updates

Home ownership in Britain is falling

Eurostat, the EU’s official statistics office has recently reported that Britain now has one of the lowest rates of home ownership within the EU.  In 2013 the figure was 64.6% which is down from a figure of 70% in 2005.  Only France, Denmark, Austria, Germany and Switzerland were lower while eastern European countries had the highest rates with the top being Romania at 95.6%.

In a separate report the Department of Communities and Local Government state that between 2000 and 2012 2.5m new homes had been bought by Landlords with only 400,000 being bought by owner occupiers.