part 1 - buy to let roadmap

1

ProofCopyNotoptimisedforhighqualityprintingordigitaldistributionProofCopyNotoptimisedforhighqualityprintingordigitaldistribution

Contents

IntroductionHowtoresearchsuitableareasforbuytoletFindingmotivatedsellersBuyingwithalimitedbudgetBirminghamCityCentreMoseleyandKingsHeathHarborneEdgbaston

RiskvsRewardChooseyouragentcarefullyTheidealnumberofbedroomsBrexitandtheUKpropertymarketMortgages-abriefoverviewforwouldbelandlordsTenantreferencingImmigrationchecksandrighttorentBudgetingforbuytoletYourbuytoletstrategyHealthandsafetyFurnitureElectricalchecksGassafetyResponsibilityforgasappliances

AuthorsnoteAcknowledgements

-


2


Introduction

AuthorBio

DanielSperberisthefounderofConcentricSalesampLettingsinEdgbastonaswellasbeingtheauthortheleadingBirminghampropertywebsiteBirminghamPropertyBuzzwwwbhampropertybuzzcom

Danielandhisteamhaveover40yearsexperienceinpropertyandaspropertyinvestorsandlandlordsthemselvesknowwhatitslikedealingwiththedaytodaychallengesofbuyinglettingandmanagingallsortsorresidentialpropertyincludingflatshousesandHMOs

Whatothersaresayingabouttheauthor

Honestandunadulteratedpraisefrombothlandlordsandevenindustryinsiders

DanielisaveryexperiencedforwardthinkingestateagentandbusinessownerHisprofessionalapproachandinvaluableadvicehasbeenaneyeopenertoevenmyselfasanestateagentandbusinessownerofnearlyadecadeIfyouarealandlordorvendorintheareashecoversyoucoulddoyourselfahugefavourbygettingintouchwithhimforachatKevinOakesDansonPropertyServices

ldquoImjusttakingafewmomentstothankyouforafantasticfirstsixmonthslettingourpropertyWearefirsttimelandlordsandneededalotofhelpMovingabroadandlettingoutourbelovedfamilyhomehadthepotentialtobestressfulbutDanielmadeitsoeasyWebarelyhadtoliftafingerrdquoDrJohnKellyLandlord


3


SelectinganareaDecidingonwhereyoursquoregoingtobuyisprobablyoneofthemostimportantdecisionsyouwillmakeaswhereyoubuydictateswhoyouarelikelytorenttoBuyanex-councilpropertyinaroughareaandyoumaynotgettheprofessionaltenantsyouenvisagewhenyoucometomarketthepropertyUltimatelythepropertyandtheareaneedtobeinharmonyEssentiallyyouneedtobeofferingwhatyourtargetmarketwantsHowwelldoyouknowtheareaAretherebetterandworsepartsAreyoulocalandaretherepeopleyoucanaskYouseesomeareashaveabadnamebutinfacttherearegoodpartswhichifyougrewupintheareayouwouldbefamiliarwithAndthisisthekeyndashwhenbuyingordinaryfamilyhousinginnormalsuburbanareasmostlikelyyourtenantswillbepeoplewhogrewupthereWhatyougainwhenyouacquirethisin


4


depthlocalknowledgeisthepowertospotabargainOveralltheareamaybeconsideredtobealsquobadrsquoareaandhencethehousepricesconsiderablylowerbutyouknowthroughyourownresearchthatcertainpartsareactuallywellregardedlocallyIfyoucanrevealthissortoflocalknowledgeyouarelikelytodowellandwhilstyoumayneedtowaitfortherightpropertytocomealongwhenitdoesyouwillsurelybereadytopounceSohowcouldyouimproveyourlocalknowledgeHerearemytopsuggestions1GototheareayoursquoreconsideringandlookaroundforyourselfVisitatdifferenttimesofdayinthesamewayasifyouwerebuyingahouseforyourselftolivein

2MakecontactwithpeopleinthelocalareaSpeaktolocalbusinesses(cornershopsownersareoftenhappytochat)thelocalchippyevenifyoursquovegotthegutstodosostopafewpeopleatthelocalsupermarketandaskthemwherearethebestplacestoliveintheneighbourhood

3UsethewebsitewwwmousepricecomThiswebsitegivesyouallsortsofusefulinformationfromthecrimestatstothelocationofsocialhousingItreallyisavaluableresourceandshouldbeusedIwouldsayasafirstportofcallifyouaretryingtomakeaquickcomparisonofareaswhichyouhaveyettovisitBelowisanexampleofheatmapfromwwwmousepricecomshowingsocialhousingdensityinandaroundEdgbastonBirmingham


5


FindingmotivatedsellersIrsquomluckythatmostofthepeopleIspeaktoinmylineofworkarepositivego-gettersIsupposeinmanywaysinpropertyyouhavetobelikethistomakethingsworkforyouHowevernowandagainIcomeacrossoneoftheglasshalfemptysortsorlsquodoomandgloomersrsquoasIsometimesliketocallthemThesepeoplearequicktotellyouwhysomethingwonrsquotworkforthemldquoIcanrsquotgetadecentmortgageraterdquoorldquoAlltheestateagentsIspeaktoarecrookedrdquoorevenldquoTherearenrsquotanypropertydealstobehadinBirminghamanymorerdquoThelistofcomplaintsorexcusescangoonandonbuttheonethingwhichtheyallhaveincommonisthattheyarejustthathellipexcusesYouseetherearealwayswaystogetaheadofthecompetitionSomeofthemtakemoreeffortandpatiencethanothersndashonethingIalwaysrecommendtowouldbeinvestorsistogoandmeettheagentswhoareactiveintheirchosenareandashbuttherearealsoquickwins


6


SoherersquosonesuchquickwinhellipDidyouknowthatanyonecangoontoZooplaandseeonlythosepropertieslistedinthelast30daysYoudidOkayherersquosthenextbithellipDidyoualsoknowthatyoucanalsospecifytoonlyshowpropertieswhichhavebeenmarkedbytheagentasbeinglsquochainfreersquoYoudidokaysohereisthefinalbitwhichcreatesthemagichellipYoucanalsoorderthelistofpropertiesinorderoftheamountreducedSonowyouhavealistofallsellerswhoarenewtothemarketandarehighlymotivatedtosellTryitforyourselfandseewhatcomesupwhichyoumighthaveotherwisemissed

AREAFOCUS-BIRMINGHAM

WherecanyoubuyinBirminghamwithalimitedbudgetAshousepricesgouppropertyinvestorswithsmallerbudgetsarefindingitincreasinglydifficulttofindpropertiesatthelowerendofthemarketFrommyconversationswithinvestorsthepricepointwhichmostseemtoneedtobuyunderisaroundpound120000SowhatcouldyoubuyatthisfigureWellitalldependswhereyoursquorelookingbutinBirminghamthefollowingcouldbeworthconsideringastypicalexamplesofpotentiallygoodbuytoletinvestments


7


BirminghamCityCentrepound120000willbuyyouastudioapartmentinvariouscitycentredevelopmentsRelativelyspeakingforthefloorspaceyougetthepriceyoupayisquitehighbutthereagainsoistherentmakingstudiosoneofthebetteryieldinginvestmentsinBirminghamCityCentreDownsideLikeallcitycentreapartmentsyoucanpayasubstantialchunkofyourrenteachmonthforgroundrentandservicecharges

MoseleyandKingsHeathAgainpound120000willputyousquarelyinflatterritorybutthistimeyouwillbelookingatonebedsratherthanstudiosIfyouareveryluckyandyoucanfindoneyoumayalsofindatwobedroommaisonettewhichneedsworkTheyieldsherewillbefairlysimilartothecitycentrebutthegroundrentspossiblylowerDownsideThereisnotquitethesamelevelofdemandforflatshereasinBirminghamCityCentre


8


HarborneIfyoursquoreluckyyoumightfindaonebedroomflatinoneoftheolderblocksontheBearwoodsideofHarborneforyourbudgetorastudioapartmentifitrsquosmorecentrallylocatedRentsinHarborneremainhighsosimilaryieldstoMoseleyDownsideThemajorityoftherentalstockinHarborneisterracedhousingmakingflatshardertofindatthisprice

EdgbastonEdgbastonisamassiveareaandifsomeonesaysthataparticularpropertyisinEdgbastonthenyouneedtoactuallylookatwhereitisonthemapConceivablyitcouldlieanywherebetweenPershoreRoad(EdgbastonCricketGround)andCapeHillAvailableoptionsforyouwithabudgetofpound120000willincludebothflatsandhousesInparticularifyoulookoverontheCityHospitalsideofthearea(aroundSelseyRoadSwindonRoadetc)youwillfindarangeofterracedhousingwithinyourbudgetYieldsherewillbeonaparwithCityCentreorhighergiventhatforthemostparttherewillbenoservicechargestopayDownsideWhilsttheareamaybecalledEdgbastonitisnottheEdgbastonwhichyoumightimaginewiththesprawlinghousesandmanicuredlawns


9


RiskvsRewardWithpricesinBirminghamontheriseitrsquosunsurprisingthatmanypropertyinvestorsarestartingtolooktothesurroundingareasforcheaperpropertiesFormosttherootoftheproblemisthelargeamountofdepositrequiredbythemajorityofbuytoletlendersNowthethingisthisndash

wherevertheybuyinvestorsstillwanttoachievegoodyieldsandcapitalgrowthButasweknowifoneareaischeaperthananotheritisprobablybecauseitisnotseenasbeingasdesirableAtextremesthismaymeanthatthecalibreoftenantisnotthesameandwiththiscomesassociatedrisksThisbringsmenicelyontothesubjectofriskversusrewardYouseeyourarelygetsomethingfornothingEitheryougoforanicesafebet(sayatraditionalterracejustofftheKingsHeathhighstreet)withanaverage4yieldoryougoforsomethingmoreriskylikeaflatinanex-councilblockwitha7-10yieldNowmostlandlordsarenotsnobsafterallformostitissimplyabusinessandtheyhavelittleornoemotionalattachmenttothepropertyitselfsothethingtobearinmindwhenoptingforahigherriskstrategyistheeaseofmanagement


10


WhereasthemanagementofapropertyinaprimelocationmaybefairlystraightforwardandeasilytackledbythelandlordthemselvesyoumightwellcomeupagainstsomehurdleswhenlookingafterapropertyinahigherriskareaForexampleyoumayfindyourselfhavingtodealwithhousingbenefitclaimsYoumayalsohavetoacceptthatyourtenanthasmultiplesourcesofincomewhichmaymeanthattheircashflowandconsequentlyyourcashflowarenotassmoothasyoursquodbothlikeInadditionyoumaywellfindthatyourpropertysuffersmorewithwearandtearaslowerincometenantsaremorelikelytobefamiliesthancouplesorsinglepeopleThereisnorightorwronginthisitissimplyacaseofwhatyou(andifyoursquoreusingoneyourlettingagent)feelcomfortablewith

ChooseyouragentcarefullyIrsquodliketotellyouaboutsomethingwhichhappenedearlierthisweekandwhichquitefranklyastoundedmeAlandlordwhoIhaveknownforthebestpartofsixyearsbuthavenrsquotseenforaboutninemonths(youngbabyputhimoutofactionforabit)toldmeabouttheproblemshehadbeenhavingwithhislettingagentNowIrsquodjustliketosaybeforeIgoanyfurtherthatthisisnrsquotaboutanyofthelocalagentsinourareainfacttheagentconcernedisnrsquoteveninSouthBirminghamhoweverIthinkthisisapertinentlessonforanylandlordespeciallythosewithanumberofpropertieswhichtheyentrusttoasingleagentBasicallywhathadhappenedwasthatthelandlordrsquoslettingagent(whomanagedintheregionof50or60propertiesforhim)hadnotbeenpayinghimthefullrentThiswasnrsquotbecausemaintenancehadbeendoneatthepropertiesandthereforedeductedfromtherentitwassimplythecasethatthisdishonestagentassumedthatbecausethelandlordhadsomanypropertieshewouldnrsquotnoticeafewquidmissinghereorthere


11


WhilstIrsquodliketothinkthatiftheyweremypropertiesIwouldnoticeashortfallIcanrsquothonestlysaythatIwouldbeabletotellifIhad50ormorepropertieswithvariousrentscominginatdifferenttimesduringthemonthThelessonhereisthatanydecentagentshouldbeprovidingasamatterofcoursemonthlyemailedstatementsWhetheritrsquosforalandlordwithasinglepropertyinwhichcaseitissimplyabreakdownofrentreceivedminusfeesandmaintenanceagainstrentremittedorforalandlordwithaportfolioofpropertiesasummaryplustheindividualstatementsThankfullythelandlordinquestiongothismoneybackbutitmightnothavebeensuchahappyendingifthesituationhadgoneonforlongerandtheamountofrentindeficithadbeenhigherIndeedhadthelettingagentnotbeensolventthisisasituationwhichmayneverhavebeenputrightAndthisgotmethinkingHowmanylandlordsoutthereareunhappywiththeirlettingagentbutratherthanvotingwiththeirfeetandtakingtheirbusinesselsewhereareinsteadjustputtingupandshuttingupIfthingsarenrsquotrightwhywouldnrsquotyouchangeWhatrsquosstoppingyoufrommovingyourpropertiestoanagentwhoappreciatesyourbusinessIsitbecauseyoubelievethatmovingtoanotheragentmidtenancyissimplytoodifficulttooriskyormaybesimplythatyoudonrsquotknowhowitrsquosdoneIntruthitrsquosnotthatdifficultyoujustneedthenervetodoit


12


WhatrsquostheidealnumberofbedroomsOneofthequestionsIamoftenaskedbynewinvestorsiswhatistheidealnumberofbedroomsforarentalpropertyTheanswerinpartdependsonwhetheryouaretalkingabouthousesorflatsItalsodependsonwhatyourinvestmentstrategyisByinvestmentstrategyImeanwhetheryouaretryingtomaximisetheyieldforshorttermcash-floworgoingforapropertywithpotentialforgoodcapitalappreciationinthelongertermOfcourseyoumaywellbeaimingforacombinationofthetwoToanswerthequestionofhowmanybedroomsisbetterforbuytoletweneedtounderstandtheeffectthishasonboththeyieldandthecapitalappreciationWealsoneedtoacknowledgethatitwillvarybyareaandbypropertytypeLetrsquoslookatMoseleyasanexampleWewilllookatjustoneandtwobedroomflatsinMoseley


13


LetrsquosfirstlookattheaskingpricesAtaglancetheaverageaskingpricetodayofaonebedroomflatinMoseleyispound90000Incontrasttheaverageaskingpriceforatwobedispound133000SowhatabouttherentsWellbasedonwhatisadvertisedtodayonZooplaatypicalonebedroomflatisadvertisedwitharentalpriceofpound500percalendarmonthandatwobedatpound610permonthTranslatethisintoyieldsandthatrsquosayieldof66fortheonebedagainst55forthetwobedSopurelyintermsofachievableyieldstheonebedisthebetteroptionButwhataboutcapitalappreciationWellthisiswhereitgetsabitmoredifficultNormallyifIwasgoingtopredictpotentialforcapitalappreciationIwouldlooktopreviousyearsrsquogrowthasanindicatorHoweverthepastdecadehasbeenaturbulenttimeforpropertyownersandnomoresothanforthosewhoboughtflatsinMoseleyArapidincreaseinthebuildingofnewflatscoupledwiththenationwideeconomicproblemsresultedinvaluesstagnatingoreveninnegativegrowthforsomeThankfullythingsseemtohavesettledsomewhatandifyouwerebuyingaflatnowyoucoulddosowithalotmoreconfidenceAstwobedsappealbothtohomeownersandbuytoletinvestorsthesenormallyofferbothbettercapitalappreciationandareeasiertosellinthelongrunOfcourseanotheroptionwouldbetofocusinsteadonhouseswhichhavecontinuedtoappreciate


14


ShouldyoubeworryingaboutBrexitUnlessyoursquovebeenlivinginacavetheselastcoupleofweeksyoursquollhavestruggledtoescapethetorrentofdiscussionsconjecturesandanalysisinthemediaofthesocalledBrexitWhetheritisrightorwrongremainstobeseenandsurelywewillonlytrulybeabletojudgewiththebenefitofhindsighthoweveronethingwhichseemstohavebeenmissedbythemainstreammediaisthepotentialimpactontheUKpropertymarketNowyoumightsaythatthereasonthishasnrsquotbeendiscussedisbecausetheeffectislargelyunknownbutIwouldsaythatthisisnotthereasonAfterallwhodoesreallyknowatthisstagetheimpactofanimpendingdivorcefromtheEUonanyspecificaspectoftheUKeconomyEventhefutureoftheNHSwhichwasamajorpointoffocusduringthepre-referendumcampaigningseemstobeinquestionSowhyhastheimpactontheUKpropertymarketnotbeensowidelydiscussedintheensuingweekssincethereferendumMyopinionisthisndashpropertyinvestorsfallintooneoftwocampsSeriousinvestorswhohaveclearlydefinedobjectivesfortheirpropertybusinessesThesepeoplehavenrsquotgotintopropertyonawhimInsteadtheyhavethoughtaboutitplannedforitandindeedtheyhaveputinplacecongruentstrategieswhichhelpthemmeettheirobjectivesSuretheymaynowbeconcernedaboutwhatmaychangeintheensuingmonthsandyearsbuttheywilllargelyadaptanddevelopnewtacticswhichwillallowthemtonotonlywhetheranstormbutalsotakeadvantageoftheprevailingconditionsSowhyisthisgroupnottalkingaboutBrexitSimplebecausetheyarebusydoinghellipbusythinkingplanningreviewingandadapting


15


thesepeoplenottalkingaboutBrexitBecauseiftheydidnrsquothaveaplanpre-referendumtheymostlikelydonrsquothaveonenowTobeblunttheyrsquorestickingtheirheadinthesandNowincaseyouthinkIrsquombeingoverlyharshtothissecondgroupletrsquosbeclearndashIhavemassivesympathyforaccidentallandlordsManyofmyclientsfallintothisgroupandtheyarenotinthispositionbecausetheychosetobeMaybetheyboughtatthepeakofthemarketandfoundthemselvesbeingunabletomovewhentheirfamilygrewOthersnodoubtownedhomespriortomeetinggirlfriendsboyfriendshusbandsandwivesOvertheyearstheadvicehasoftenbeengiventhatifyoucanrsquotselljustrentNeverthelessmypointremainsthattheydidnotactivelychoosetobeinthispositionSowhatwillhappentotheUKpropertymarketAtthetimeofwritingIamseparatedfrommycrystalball[IlentittoaWelshfootiefanandnevergotitback]soIwillrefrainfrommakingwildpredictionsHoweverIwillstatethefollowinghellipIrrespectiveofwhathappenspostreferendumthefollowingremainsunalteredhellipdemandandsupplyofhousingYesmortgageratesmaychangeandmortgagesmaybecomemoreorlessaccessiblendashindeedwemayallfeellikewehavemoreorlessmoneyinourpocketndashbutultimatelyweallstillneedsomewheretoliveInconclusionIthinkthechoiceyouhaveasapropertyinvestoriswhetheryouallowexternaleventstodictateyouractionsorwhetheryougrabthebullbythehornsandcreateyourownoutcomeIdonrsquotknowaboutyoubutIknowwhichoneIprefer

ThesecondgrouparetheaccidentallandlordsThesepeoplearenrsquotreallyinvestorsatallThisisthegroupwhoifthewindchangeswillmostsurelyfeeltheeffectsmostkeenlyWhyare


16


MortgagesByMatthewJonesofMoneywatchFinance01217453347AlltoooftenpeopledecidetobuyapropertywithoutconsideringtheimportanceofgettingtheirfinancialduckslinedupWehavehadinstancesinthepastwherepeoplehavespentmanymonthssearchingfortheidealbuytoletpropertyonlyforeverythingtofallapartbecausetheyhadnrsquotdonethebasicsIwouldencourageanyinvestorlookingtobuytolettotakeacarefullookattheirowncreditreportsomethingthebankswilluseinthedecisionmakingprocessoftenmakingitthefirstthingtheycheckviaanautomatedprocessldquocomputersaysnordquoThethreecreditbureausintheUKarecurrentlyExperianEquifaxandCallCreditThefirsttwowillallowyouaccesstoyourcreditreportforthefirst28daysforfreebutwhatmanypeopledonotknowisthatCallCreditallowsyouaccesstoyourrecordsfreeofchargeforlifeviathewebsitewwwnoddlecoukWehavehelpedmanyinvestorsoverthepastfewyearsimprovetheircreditscoreHereareafewsimpleyeteffectivetipsUseyourcreditcardandclearitinfulleverymonthtohelpbuildyourcreditscoreDonrsquotuseyouroverdraftLendersnowtreatoverdraftsthesameastheywouldpaydaylendingBettertohavepound1000inyourcurrentaccountconstantlyandpound1000lessinyoursavingsaccountsMakesureyouareontheelectoralroll-againwehaveseeninvestorswithlargedepositsanddecentincomesfailthelendersinitialchecksbecausetheywerenrsquotontheelectoralrollFinallydonrsquotassumebuytoletlenderswonrsquotbeinterestedinyourincomeThingshavechangedandthemarketisalottighternowadayswithalotmore


17


ReferencingThesadfactisthatevengoodtenantscanturnbadsonoamountofreferencingorcreditcheckswillcompletelyeliminateyourrisksHoweverwithacombinationofthoroughreferencingcreditchecksandtoppingitalloffwitharentguaranteeyoucertainlycanminimiseyourexposuretofinanciallossWhilstnotimpossibleitcanbedifficultforlandlordstodoacreditcheckonpotentialtenantsThisiswhymanylandlordspreferthistobedonebyalettingagentHoweverasabareminimumIwouldsuggestthatanylandlordshouldcheckthefollowing

Checkthatyourpotentialtenantcancomfortablyaffordtherent(30xmonthlyrentasanannualincomeisagoodguide)CheckwiththelandlordhowtheirprevioustenancywasconductedCheckthatpotentialtenantshavethelegalrighttoresideandrentintheUK(seenextsection)

FinallyandthisissomethingwhichmostagentswontsaytoyoubutIwillasIamalsoalandlordsoIwill-useyourgutinstinct

ImnotsayingyoucanrelyonyourgutinstincttospotagoodtenantbutifyourgutinstincttellsyouthatapotentialtenantwillbeproblematicthenyoureprobablycorrectAlotofthisboilsdowntoexperiencebutsuchthingswhichsometimesringalarmbellswithmeinclude

BeingabsolutelydesparatetomoveinOfferingtopayalargerdepositoreventhefullrentupfrontfornoapparentreasonBeingunabletoprovidefullreferencesViewingonbehalfofsomeoneelsewhoyouareunabletomeetuntilthemovein


18


ImmigrationchecksAsalandlordyouhaveadutyundertheimmigrationacttocheckthatanypotentialtenantshavethelegalrighttoresideandrentintheUKYoucandothisbycheckingtheirpassportiftheyareaUKorEUcitizenoriftheyareanonEUforeignnationalbycheckingtheirpassportandanynecessaryvisasYoushouldalsobeawarethatanychildrenundertheageof18shouldberecheckedupontheir18thbirthdayandalsothatvisaandthelikearesubjecttoexpirydatesandconsequentlyrecheckingwillberequiredBeawareatthetimeofwritingandfollowingthereferendumontheUKleavingtheEUthismaybesubjecttochange


19


BudgetToooftennewinvestorsonlyconsiderhowmuchmoneytheyneedforthedepositandneglecttheothercostsThisisbynomeansanexhaustivelistbuttheseareatleastsomeoftheothercostswhichyoushouldfactorinpriortobuyingapropertyDepositforthemortgagemoneytorefurbishthepropertysolicitorcostsmortgageapplicationfeesbrokerfeessurveyfeesmortgagerepaymentswhilstthepropertyisemptyfollowinglegalcompletionpotentialcostsincurredduetoabortivecancelledsalesAndthentherearethecostsoftimesuchasTimeoffworkassessingareastimespentviewingpropertiestimespentdealingwiththesolicitorstonamebutafew

StrategySuchacommondilemmandashdoyoubuyjustonelargepropertyoranumberofsmallerandlessexpensiveones

OfcourseyoucanlookatitfromthepointofviewofwhetheronepropertyorafewsmalleroneswouldgiveabetteryieldorpotentialforcapitalappreciationbutIwouldlookatitinaslightlydifferentway-

IwouldaskyourselfthequestionofwhichisthelessriskyputallyoureggsinonebasketinbuyingonepropertyorspreadtheriskandbuyafewYouseeifonepropertyisvacantortherentnotpaidandthisistheonlypropertyyouownthenyourincomegoesfrom100tonothinginonefellswoopHoweverifyouhavesayfoursmallerpropertiesandthesamethinghappensthenyouhavelostjust25ofyourincomeassumingofcoursethateachpropertybringsyouinanidenticalincome


20


HealthandSafetyFurnitureTheFireandSafetyRegulations(softfurnishings)statesthatallfurnishings(bedssofaschairsandthelike)complywiththelatestfireregulationsEnsurethatyoudonothaveanynon-compliantfurnishingsinarentalpropertyIMPORTANTFailuretocomplywiththeFurnitureandFurnishingsRegulationsmayconstituteacriminaloffenceundertheConsumerProtectionAct1987whichcarriesamaximumpenaltyonsummaryconvictionofapound5000fineandorsixmonthsimprisonmentFrom1stJanuary1997allupholsteredfurnitureinrentedaccommodationmustcomplywiththefireresistancerequirementsoftheFurnitureandFurnishings(Fire)(Safety)Regulations1988(asamended)Allupholsteredorpart-upholsteredfurnitureiscoveredbytheregulationsincludingmattressespillowsandcushionsEachpieceoffurniturethatcomplieswiththeseregulationsshouldhavearectangularlabelpermanentlyattachedtoitwiththeheadingldquoCARELESSNESSCAUSESFIRErdquoIfthefurniturewasproducedpriorto1988ordoesnothavetheabovelabelitwillprobablynotcomply(apartfromantiquesmadebefore1950)


21


ElectricalchecksAnelectricalsafetycheckmustbecommissionedpriortothecommencementofatenancyandmustbecarriedoutbyacompetentperson(aPartPqualifiedelectricianinkitchensandbathrooms)toensurethattheelectricitysupplyandallappliancesarelegalThisincludessupplyinginstructionbookswhereneededforsafeuse

IMPORTANTFailuretocomplywiththeElectricalRegulationsmayconstituteacriminaloffenceundertheConsumerProtectionAct1987thatcarriesamaximumpenaltyonsummaryconvictionofapound5000fineandorsixmonthsimprisonmentThisLegislationmeansthatLandlordshavealegalobligationandadutyofcaretotenantstoensurethattheelectricalinstallationandtheelectricalequipmentsuppliedissafe

TheElectricalEquipment(Safety)Regulationshavebeenmandatorysince1stJanuary1997TheystatethatallelectricalapplianceswithletaccommodationmustbesafeThisappliestobothnewandsecond-handappliancesandcoversallelectricalitemssuppliedfortheintendeduseoftheTenantTheregulationsalsocoverfixedappliancessuchascookersetcTheonlymethodofinsuringthattheseappliancesaresafeistohavethemtestedbyatrainedelectricalengineerusingtheportableappliancetestingequipmentknownasa(PAT)testWhatdoesthismean

AllelectricalsystemsitemsmustbebullCertifiedsafewhenatenancybeginsbullMaintainedinasafeconditionthroughoutthetenancybullMaintainedonlybylsquocompetentpersonsrsquobullFitforpurposeandfreeofdefectsWhatshouldIasalandlorddoAsaminimumhaveanannualelectricalsafetyinspection(ietheEnhancedElectricalinspectionorrdquoE2rdquo)whichincludestheelectricalequipmentEnsureanyinstallationormaintenanceworksaredonebyPartPlsquocompetentpersonsrsquo


22


GassafetyAsalandlordyouareresponsibleforthesafetyofyourtenantsTheGasSafety(InstallationandUse)Regulations1998dealwithlandlordsrsquodutiestomakesuregasappliancesfittingsandfluesprovidedfortenantsaresafe

AppliancesfittingsandfluesinacommunalareabutwhichmaybeusedbytenantsarealsoincludedYouareresponsibleforthemaintenanceandrepairoffluesappliancesandpipeworkprovidedforyourtenantsusebyaGasSaferegisteredengineerAlthoughthereisnoprescribedtimeframeforthesedutiesgoodpracticewouldbethedemonstrationofregularannualmaintenancechecksandsubsequentrepairs

Youarealsoresponsibleforensuringanannualgassafetycheckiscarriedoutwithin12monthsoftheinstallationofanewapplianceorfluewhichyouprovideandannuallythereafterbyaGasSafeRegisteredengineerYoumustkeeparecordofthesafetycheckfor2yearsandissueacopytoeachexistingtenantwithin28daysofthecheckbeingcompletedandissueacopytoanynewtenantsbeforetheymovein

Whatgasappliancesareyouresponsibleforasalandlord

AnygasappliancethatyouownandprovideforthetenantsuseisincludedinyourlegaldutiesIfatenanthastheirowngasappliancethatyouhavenotprovidedthenyouhaveresponsibilitiesforpartsoftheassociatedinstallationandpipeworkbutnotfortheactualappliance

Therearesomegoodpracticemeasuresthatyoucouldadoptwithappliancesthattenantsown

1SendaremindertothetenantthattheirappliancesshouldbeservicedandcheckedforsafetyeachyearbyaGasSaferegisteredengineerandwherepossibleoffertoincludethese(atreasonablecost)withingassafetymaintenanceundertakenonyourbehalf

2Atthestartofthetenancyadvisethetenantofanyfluesorchimneysthatare


23


unsuitablefortheinstallationofagasapplianceYoumayalsowishtoconsiderregulatingtheinstallationofanyappliancebyatenantthroughtheconditionsofthetenancyagreement

3Itisalsorecommendedtoincludeallflues(egchimneys)connectedtogasapplianceswithinyourlandlordsgassafetycheckevenwheretheydonotserveappliancesprovidedbythelandlordThismayalsohelptofulfilotherlegaldutiesundertheHealthandSafetyatWorketcAct1974

4Free-standingcookersconnectedbyaflexibleconnector(bayonetfitting)arenotconsideredtobelsquoreadilymovablersquobutcanbemovedtemporarilyegtocleanthespacetheynormallyoccupythistypeofactivityisnotregardedaslsquoworkrsquowithinthemeaningoftheseRegulations

AnyothertypeofinstallationreinstallationisregardedasgasworkandmustbecarriedoutbyaGasSaferegisteredengineer


24


Authorsnote

IsincerelyhopeyouveenjoyedreadingthisshortbookandyouhavefoundsomeoftheideasandinformationdiscussedusefulInwritingthisIrealisedjusthowmuchthereistoshareonthetopic-notsurprisingIsupposeconsideringthatIvebeenintheindustrysince2002

ThisiswhyintheendIdecidedtomakethisPart1ofatwopartseriesSoifyoufeellikethereareimportanttopicswhichhavebeenmissedoutyoureprobablyright

InPart2Iwillbediscussing

HMOsKeepingyourrepairbillsdownKeepinggoodtenantsPreventingendoftenancyproblemsEnsuringrentcomesinontimeeverytimeDealingwithdampandcondensationPlanningarefurbishmentArticle4LegalnoticesSelfmanageoremployanagentBuyingtorenovate(flip)Workingwithcontractors

AtthetimeofwritingPart2isstillaworkinprogresssoifyoudliketoreserveyourFREEcopyjustdropmealinetodanielsperberconcentricpropertycouk

Ifyouvegotanyquestionsaboutanyofthetopicsinthisbookorneedanyfurtherhelpthenfeelfreetogivemeacallon0121405038907854577566


25

ProofCopyNotoptimisedforhighqualityprintingordigitaldistributionProofCopyNotoptimisedforhighqualityprintingordigitaldistributionProofCopyNotoptimisedforhighqualityprintingordigitaldistributionProofCopyNotoptimisedforhighqualityprintingordigitaldistribution

26


Acknowledgements

ThankstoMattJonesfromMoneywatchFinanceforhissectiononMortgages

SectionsonGasSafetyElectricalSafetyandFireSafetyarereproducedwithpermissionunderOpenGovernmentLicenceandaresourcedfromhttpswwwnidirectgovuk

DanielSperberisfounderownerandco-directorofConcentricSalesampLettingsEdgbastonHisagencyworkswithlandlordsandinvestorsatalllevelsinsellinglettingmanagingandalsoacquiringresidentialpropertyintheBirminghamarea


2


Introduction

AuthorBio

DanielSperberisthefounderofConcentricSalesampLettingsinEdgbastonaswellasbeingtheauthortheleadingBirminghampropertywebsiteBirminghamPropertyBuzzwwwbhampropertybuzzcom

Danielandhisteamhaveover40yearsexperienceinpropertyandaspropertyinvestorsandlandlordsthemselvesknowwhatitslikedealingwiththedaytodaychallengesofbuyinglettingandmanagingallsortsorresidentialpropertyincludingflatshousesandHMOs

Whatothersaresayingabouttheauthor

Honestandunadulteratedpraisefrombothlandlordsandevenindustryinsiders

DanielisaveryexperiencedforwardthinkingestateagentandbusinessownerHisprofessionalapproachandinvaluableadvicehasbeenaneyeopenertoevenmyselfasanestateagentandbusinessownerofnearlyadecadeIfyouarealandlordorvendorintheareashecoversyoucoulddoyourselfahugefavourbygettingintouchwithhimforachatKevinOakesDansonPropertyServices

ldquoImjusttakingafewmomentstothankyouforafantasticfirstsixmonthslettingourpropertyWearefirsttimelandlordsandneededalotofhelpMovingabroadandlettingoutourbelovedfamilyhomehadthepotentialtobestressfulbutDanielmadeitsoeasyWebarelyhadtoliftafingerrdquoDrJohnKellyLandlord


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part 1 - buy to let roadmap

Real Estate