In a Real State

Who Lives in My House?

With tenants in abundance these days you can afford to be very selective. Sadly, the typical agency mentality is to try and persuade you to accept an offer below what could potentially be achieved or with conditions generally driven by the tenant. My advice is to not forget you are in the driving seat here and with market conditions strong, stand by your guns!

In the last 60 days of a tenancy you can afford to be a little more particular as you are still receiving the income, but beware this can quickly bite you on the preverbal bottom if you’re not careful. I’m not suggesting be the “Wolf of Wall Street” but unless you are completely happy with the terms of an offer, and if you have some time to market before the end of the current tenancy, hold back. If you are offered three occupants fir your two bedroom apartment and one wishes to use the sitting room as a bedroom, say no! OK, that’s an extreme example but it does happen more than you probably realise. Corporate organisations are moving more people nationally than they used to and make sure your agent has good contact with Relocation Agents etc in order to hopefully identify a quality tenant. Exposure is everything and more often than not a quality tenant will come from out of area, not within the immediate vicinity. At Complete RPI we utilise the entire market to source you a tenant; we are not just local representation.

References are vital so make sure your agent uses a reputable referencing organisation. This should not be up for negotiation. The process is very simple and at the point a tenant is identified they complete a pre-populated form which is passed through a referencing agency with a simple scoring system – either a PASS or FAIL, plain and simple. In fairness it’s important to ascertain on what points the prospective tenant has failed as these could become favourable points of negotiation. A case in point: we recently identified a tenant moving from overseas to work in the banking sector and he failed on a credit score as he has spent no time in the UK. In summary he passed all other criteria such as employment status and previous landlord references and we were happy he was who he said he was and was gainfully employed. At this point as we could not ascertain any credit history we took a commercial view and negotiated six months rental in advance! All in all a great outcome and the tenant has proven to be excellent. In the case of ‘the computer said no’, common sense prevailed.

As a matter of course Complete RPI provide free rental guarantee insurance for our clients, which will protect against any rental arrears. It is well worth taking out such insurance subject to references; however you will normally have to pay premium.

It is worthy of note that Complete RPI at the time of writing have an occupancy rate of 98% with a UK national portfolio.

As with house prices, the regional picture is mixed. For those looking to invest in buy-to-let now, you have to spend some serious time crunching the numbers to make sure a property stacks up financially. Investors would be wise to appreciate it’s mainly capital growth over a long time period where traditional buy-to-let often delivers best. To really earn money from income these days, you really should consider property with a higher yield in “middle England” and then you have to look at the net income - not just gross yield. It’s essential to make sure you also have an exit strategy in place. We at Complete RPI will produce an investment strategy from the outset, highlighting true net returns and cost calculators. This can be done for new clients with existing portfolios and is an excellent overview of your exposure to the market.