Five Priorities Ayrshire Landlords Need to Know

As a landlord in 2023, it’s fair to say there are a lot of challenges on the horizon. From changes to rental rules, tax upheaval, mortgage mayhem… it’s all going on.

 But the first thing to remember is your tenants and their experience of your property. It’s all too easy to move new people into your vacant rental and forget about them until a problem arises. So why not try and make the tenancy run as smoothly as possible from the outset?

 In this three-minute read, we look at five priorities Ayrshire landlords need to know and should consider.

1)     Create a property welcome pack

 It costs virtually nothing apart from time and a little bit of patience, but so many landlords don’t bother to provide the basic information a tenant needs to improve their tenancy period.

 A welcome pack could contain the following:

 ·       Landlord and agent contact details

·       Where to find instruction manuals

·       Location of electric/gas meters

·       How to work the thermostat

·       Tenant’s responsibilities

·       What to do in the event of an emergency

You may have the information already, but putting it in one place positions you as a mindful and helpful landlord. Type it out, laminate it and make sure it’s in a place where the tenant can find it. Once done, it will also benefit future tenants.

2)     Improve energy efficiency

 For most landlords, getting a vacant property let is the main priority. But why not use short vacant periods to start some energy efficiency improvements? Get the boiler serviced, make sure all the lightbulbs are energy-saving ones and check the condition of floor/loft insulation.

 3)     Get informed

 There are numerous legal reforms happening which will affect private rentals – tax changes, eviction notice reforms, pet-friendly tenancies and so on. Make sure you’re up to date and know what’s going on so it doesn’t come as a surprise later. Being informed and prepared should be a priority for all landlords.

 4)     Mortgage check

 When does your mortgage deal end? Are you on a fixed or variable buy-to-let deal? It’s essential you know the answers to these questions so you can prepare yourself for getting a new deal when the time comes. Get in touch with a mortgage broker if you’re nearing the end of a mortgage deal so you can see what’s available.

 5)     Communicate

 Whether it’s with your tenant or your managing agent, clear communication should be a priority for all landlords. While you don’t have to engage in weekly chats with your tenants, checking in with them periodically is a great way to keep on top of things such as repairs and maintenance and to avoid any unexpected issues or call-outs out of hours.

 A short text or email to ask how it’s all going is non-intrusive yet shows willingness to set things right if needed.

 Are you looking to let a vacant property? Get in touch with our team at Parkview Property 01292 442888


Landlords Guide to HMOs in Ayrshire

 

As a landlord, you might be thinking about how to get more value from your property. While the rental market for single tenancies is booming, have you considered a House in Multiple Occupation (HMO)? Here's a short Guide to HMOs

These days, HMOs are big business. In simple terms, it’s where a single property is made into multiple dwellings. And currently, the rental market is crying out for more.

HMOs are no longer dingy bedsits of the past, they’re more like high-quality studio apartments under one roof.

In this three-minute read, we take you through the basics of an HMO, what you need to know about them, and how they can make you more money.

The legal definition of an HMO

A property is an HMO if at least three tenants are in residence, they form separate households (i.e. not a family or flat sharers), and they share bathroom, kitchen, and/or toilet facilities. A large HMO is where at least five tenants share the property and facilities.

Do I need permission to convert a property into an HMO?

Before you even consider turning your property into an HMO, get on your local council’s website and do some research. Many areas are subject to Article 4 directions. This basically means you can’t convert a property into an HMO without applying for planning permission.

You also need a licence to run/own an HMO, which is why it’s so important to speak to your council about their requirements.

Why are they so popular?

It’s simple: supply and demand. As the demand for rentals grows, so does the cost of renting. Add in increased costs of living, and many young professionals might not be able to afford the rent on their own. HMOs are a great way to bridge this gap, especially in larger cities.

What are the benefits of an HMO for a landlord?

It’s all about the money. Many investors have found that renting out rooms individually gives them a greater rental yield than a single tenancy.

Also, short-term occupation means even if one room is vacant for a period, the landlord still gets an income from the other tenants. 

What should I know if I’m considering starting an HMO?

As with any property investment, an HMO has its ups and downs. If you’re a part-time landlord with a busy job, an HMO might not be the right move. There is a lot of work involved and you’ll need time to go through the process of planning applications, licensing, property conversions, tenant-finding, and so on.

Also, not every large house can be easily converted into an HMO, so it’s worth getting an expert in.

The initial expense of an HMO can be high as there are a lot of legal requirements you’ll need to meet to make it suitable for tenants as set out here. Also, HMOs are normally furnished, so there’s that cost on top of the building work.

If you’re a landlord looking to find a property to convert into an HMO, or if you have rooms to rent in an HMO, get in touch with our lettings team at Parkview Property


Are You A Landlord?

Why Renting Your Ayr Property to Family Could Be Problematic

If you are a Landlord, here are some questions you should ask yourself before you rent your property to family or friends.

Do they need to sign a tenancy agreement?

Yes, yes, and yes again! They might be family, but they’re also your tenants and both parties need to know what is expected of them. For example, a financial transaction will take place each month, and you need to make the rules clear from the start. Otherwise, you may be putting your income at risk.

Should I take a deposit?

This is a personal decision that you need to make, as there’s no legal requirement for a landlord to take a deposit. However, it is a good way to protect your property and any contents from damage.

Similarly, by having a professional inventory carried out before they move in, both parties know the exact condition of the property and how it should be left.

Should I do a tenant reference check?

Asking family for personal finance details? It might make you feel awkward just thinking about it, but it’s an essential step of the rental process.

While you may think you know your family/friends’ financial background, it’s still worth making extra checks. Referencing will ensure that your potential tenant can pay the rent and highlight any issues with previous landlords.

Are there any legal issues I should be aware of if I rent to family/friends?

Not exactly, but renting to family/friends could cause problems if you have a mortgage. In fact, a lot of lenders are quite strict about this issue, and you may need to ask their permission before you move family in.

This is because the lender could be concerned that you’d charge family members less rent, or be more lenient if they didn’t pay – both of which could impact loan repayments.

Renting to friends or family can often be a great option, but it’s one you need to consider carefully and go into with your eyes wide open.

Good relationships with family and friends is priceless!   My advice would be to avoid renting to them.  Unless you use the services of a good letting agent, we can act as a ‘go-between’ if things get awkward.

For more advice on anything and everything related to rental property in Ayr, call our lettings team today.


Changes to Eviction Notice Periods

Landlords have been hit hard by the emergency legislation known as the Coronavirus (Scotland) Act 2020, which came into force on 6th April 2020. 

The 2020 Act, amongst other things, increased the notice period to 6 months for a number of grounds for eviction, regardless of how long the tenant had been resident in the property or how high the arrears were for example.  The changes were initially to remain in force until 30th September 2020, it was then extended to 31st March 2021 and frustratingly, again until the end of March 2022.  I’m sure I am not alone and  have been waiting with bated breath to see what would happen next.

I’m pleased to report that on 29th March 2022, the Coronavirus (Scotland) Acts (Early Expiry of Provisions) Regulations 2022 comes into force, bringing an end to what many landlords and Letting Agents feel have been excessive notice periods before tenants require to vacate their rented properties. 

What this all means going forward;

The Regulations stipulate that some of the changes made by the Coronavirus (Scotland) Act 2020 will expire on 30th March 2022.

The extended notice periods, including the 6 month notice period which has been used in most cases, will no longer apply.  The original 28 day and 84 day notice periods will be reinstated, meaning that landlords can seek an order for eviction far quicker than they have been able to since April 2020.

Warning - Take Note

Although this is great news for many Landlords, the 2022 Regulations stipulate that if a Notice was served on a tenant prior to 30th March 2022 the extended notice periods will still apply.  In addition, you cannot simply send out a new Notice using the same terms.  If you try, the notice period cannot expire earlier than the notice period applicable to the existing notice.

Furthermore, regarding Rent Arrears, the Regulations don’t go as far as to reinstate the mandatory grounds for eviction, nor do they get rid of the obligations placed upon landlords to issue pre-action information and take reasonable efforts to agree suitable payment plans.

The Coronavirus (Recovery and Reform) (Scotland) Bill is currently before the Scottish Parliament and seeks (amongst other things) to make the temporary changes noted above permanent.  If the Bill comes into force, the Tribunal will have to consider, whether it is reasonable to grant the eviction order, regardless of the ground used and landlords will have to continue to comply with the pre-action obligations introduced by the Rent Arrears Pre-Action Requirements (Coronavirus) Scotland Regulations 2020, or a version of them. 

Here at Parkview Property, we have been keeping a close eye on the changes to eviction notice periods. Whilst we are pleased to report this most recent change, when it comes to Lettings Legislation, we urge all self-managing landlords to seek advice from a good letting agent, or a solicitor.

For more clear and understandable advice, please feel free to contact us.  We are always here to help, and our advice is always free.


What Tax Expenses Can Ayr Landlords claim against?

https://youtu.be/5gZwc3Eu77s

A guide for Ayr landlords to declaring their rental income in the best way possible and what you can claim against.

If you rent out a property and receive a rental income from that, you must declare it. You have to pay tax on any profit. It doesn’t change your employment status to ‘self-employed’ though, as it’s considered an investment.

Of course, HMRC can be more complicated than a day at Hogwarts. The best advice will be to seek professional advice from an accountant but we’ve picked out some key points to start you off.

Start hoarding

HMRC unimaginatively call this ‘record keeping’. Be disciplined and keep receipts, bank statements, invoices, rent books, even mileage logs, so you (or your accountant) can easily make the deductions against your tax bill. This means you get to keep more of the profit away from ‘the tax man’ in a legal and ethical way, of course.

Expenses claims

There are a range of other allowable expenses. They are deductible only if they’re exclusively for renting out a property and if you pay for them yourself. This could include:

  • Water, council tax, electricity, and gas
  • Insurances
  • Services of, for example, cleaners or gardeners
  • Accountancy fees
  • Ground rents
  • Service charges

Maintenance and repairs

The definition from the gov.uk website is: ‘A repair restores an asset to its original condition, sometimes by replacing parts of it’.

If the property requires new guttering after a storm, this would be considered a repair and therefore, a deductible expense.

However, if you wanted to improve the guttering for another reason, like changing the colour, this would not be allowable.

Improvements are not an allowable expense, like replacing a laminate kitchen work surface for granite. The exception to this is updating things to their ‘nearest modern equivalent’. This could be things like changing single-glazing to modern, double-glazed windows.

If you replace an item with an upgrade, then you can claim the cost as if you had replaced like-for-like. Take the work surface example: a 2m length of laminate would be £150. The same size granite work surface could be £600. You could claim the £150, not the £600.

Domestic item replacement

Furnishings like carpets and curtains are likely to be able to be deducted, as long as you’re replacing like-for-like. Beds and free-standing wardrobes, or other items that can be considered ‘movable furniture’ are also deductible. Appliances, such as TVs or fridge/freezers, and even smaller items, like cutlery and crockery can be offset against your income.

Partial expenses

If you’re letting a property that you have a mortgage on, you can’t deduct the full amount of the mortgage payment. You can only offset the interest element of the mortgage repayment against the income. Similarly, if you use your car for a purpose related to the rental property, you can only deduct the vehicle running costs for that particular purpose. This includes mileage rate deductions.

For rental opportunities in Ayrshire, get in touch with us on 01292 442888. I specialise in Lettings and Lettings Legislation and can help you consider the market and the best options out there for you.

COPYRIGHT Parkview Property 2022


Buy To Let Property, should you use a Ltd Company?

Should you set up a Ltd Company for Your Buy To Let Property? Before becoming a landlord, you need to consider how you want to buy your rental property. There’s lots of tricky tax stuff to consider and changes to tax relief over the last few years mean that becoming a landlord might not be as profitable as you first think.

So, what should you do? Should you buy a rental property in your personal name or via a limited company?

Setting up a limited company

Since 2016, more private companies than ever before have been set up to hold buy-to-let properties (primarily because of tax changes) and it’s relatively easy to do. Whether you’re starting a company on your own or with others, it’s a matter of choosing a name, deciding who does what, having a company address, and registering online with Companies House.  

Keeping the accounts and records for a limited company can be a lot more complicated than personal tax, so it’s always advisable to hire an accountant. In addition, proper accounts are a legal requirement when running a limited company, so by hiring a professional you can have peace of mind that things will be done the right way.

Taxing stuff

Tax. Ugh. A word that makes everyone feel slightly sick. And when you’re a landlord, it’s an area you need to get your head round.

Over the last few years, the government has brought in several tax changes that impact private landlords with property in their own names and their level of tax relief. In simple terms, this means less profit and more tax.

Limited companies now hold more tax advantages for landlords. For example, a limited company can still treat mortgage costs as an expense along with other related costs of managing a rental property. In addition, limited companies are subject to corporation tax which is currently set at 19% (although this is set to increase), instead of income tax, which changes depending on your rate of pay.

Other tax areas to investigate if thinking about setting up a limited company include:

  • No capital gains tax
  • Inheritance tax issues (if you plan to pass your property on)

Always speak to an accountant or financial advisor when it comes to tax matters.

If you’re thinking about buying a rental property, please speak to us at Parkview Property.


Rental Guarantors and Ayrshire Landlords

This three-minute read explains the role of rent guarantors.

When a landlord has a niggle of anxiety over whether a prospective tenant will pay their rent, there is a way they can help protect their investment.

A landlord can ask a tenant to provide a guarantor to ‘guarantee the tenancy’.

Guarantors are often family members or close friends – and a little bit like a human safety net.

If the tenant can’t (or won’t) pay what they owe the landlord, the guarantor has to stump up the cash – or face the landlord at a Tribunal.

Extent of liability

As with so much in the lettings game, it all depends on the terms of the contract.

While some agreements only cover unpaid rent, others will also cover things like damage to the property.

An agreement should clearly state what is covered and outline the circumstances under which the contract will end.

This is important. If the guarantor has a change of heart mid-tenancy, they can’t simply walk away from their commitment. The agreement is legally binding.

When to use a guarantor

It comes down to the landlord’s discretion, but often a guarantor is used when a tenant:

  • Is new to renting.
  • Has gaps in their employment history or has recently started a new job.
  • Is a student.
  • Has a credit rating that is lacking in some way. That doesn’t necessarily mean the tenant has had financial problems; they may be young and have never had a credit card or other loans.

Important points

  • A landlord must check a guarantor’s credit and employment records closely (just as you would with a tenant). Guarantors are often required to own a property and have a gross annual income three times the rent of the rental property they are acting as a guarantor for. 
  • Most landlords prefer the guarantor to be UK-based as it’s easier to run credit checks on them and take legal action if required.
  • Issues can occur when people agree to be the sole guarantor on a rent agreement without realising this makes them liable for all outstanding rent and damage costs. For example, a mother agrees to be a guarantor when her daughter moves in with her boyfriend. However, the couple split, the ex-boyfriend disappears, and Mum is livid that she has to cover his payments.
  • Landlords must ensure that a guarantor understands what they’re signing, or they could claim that they were misled or pressured into an agreement.

For more information on any aspect of renting out a property, contact me, Janice Molloy, Tel: 01292 442888


Common Ways Your Ayrshire Home Could Be Making You Ill

In this two-minute read, we explore issues in your home that could be making you feel unwell and how to cure them.

For most of us, our home is a haven. But what if it is making you ill?

Mould and damp

Mould and damp are caused by excess moisture in the home – perhaps due to leaking pipes, roof damage, or condensation build-up. They can cause respiratory issues, nausea and vomiting, and general illness, so it’s important to stay ahead of any fungal growths or damp patches.

Quick tips to prevent mould are:

  • Air your bathroom when bathing to get rid of condensation
  • Keep your home well ventilated to avoid excess moisture
  • Where you notice mould, wipe it away with detergent or mould treatments (in more serious cases, call in the professionals to get rid of it)
  • Hang your wet laundry outside or by an open window to prevent moisture build-up.

Excess dust

No matter how clean your house is, dust and dust mites can be found within most properties. They are a common allergen and can cause asthma symptoms. Ongoing exposure may result in allergic rhinitis (runny nose, watery eyes).

Reduce dust and mites by:

  • Regularly vacuuming carpets and mopping floors
  • Dusting with a damp cloth
  • Change bedsheets weekly and wash in warm water
  • Vacuum upholstered furniture, such as sofas.

Carbon monoxide

It’s important to have a working carbon monoxide monitor in all properties, as this gas is a silent killer. Some causes include poorly installed and/or badly ventilated appliances, such as cookers and boilers, blocked flues or chimneys, paint fumes, and smoking indoors.

Early signs of carbon monoxide poisoning include an ongoing headache, dizziness, sickness, and shortness of breath.

Cleaning products

While a clean home is important, limit your use of cleaning products such as oven cleaners, bleach, and aerosols. All of these contain chemicals that can cause irritation to the eyes and throat resulting in headaches and breathing issues. 

Lead paint

Lead paint was banned in the UK in 1992 but can still affect older properties. Once lead paint starts to crack or peel, its dust can cause serious problems, especially for children and pregnant women.

If you suspect your older property has got areas of lead paint, speak to a building professional about how to get rid of it.

The good news is, what we’ve outlined above is very rare but if you’re concerned about any problems in your home, speak to us at Parkview Property.


How Ayrshire Landlords Are Finding and Keeping Dream Tenants

‘Finders keepers, losers weepers.’ It’s a timeless rhyme used every day in school playgrounds in Ayrshire 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 Parkview Property, our job is to help landlords find and keep great tenants. To ask us anything about the Ayrshire rental market, contact us today.


How To Switch Letting Agent

https://www.youtube.com/watch?v=H4AoJm3Xwfc&t=3s

If your letting agent is delivering sloppy service or hitting you up for extra fees, then it’s time to think about switching.

Many Ayrshire landlords mistakenly think changing agents is a messy and complicated process, but it’s relatively simple.

Why change?

Most landlords switch because they’re unhappy with the level of service they’re getting from their agent.

It’s time to consider switching if:

- You find yourself doing more and more of the legwork when it comes to maintenance, repairs, and safety checks because the agent is disorganised or lazy – or both.

- The tenant is calling you because the agent’s not returning their messages.

- The agent adds a commission to contractors’ fees.

- Regular inspections are not taking place.

Finding the right agent

Before you switch, do your research and look for an agent who is:

-         Local. Many corporate chains outsource their property management services to out-of-town contractors (although they don’t tell you this when pitching for your custom). Choose a local, independent letting agent instead – they’re best placed to keep a close eye on your property and, if there’s an issue, can be on-site in a jiffy.

-         Accessible. Go with an agent who is hands-on and easy to get in touch with – they’ll be far more accountable than a third-party contractor who you’ve never met face to face.

-         Committed to using local tradespeople. Local plumbers, electricians, and gas engineers will be more likely to work to a high standard as they have a reputation in the area to protect. Avoid agents who use contractors from further afield and charge commission on contractors’ fees.

What does switching involve?

  1. Read through the contract you have with your agent and understand your notice period and any other restrictions you need to be aware of. Many landlords find it easiest to switch when a tenancy is ending or up for renewal.
  • Serve notice in writing to your letting agent. Instruct your agent to release all tenancy documents – such as electrical and gas safety certificates – to your new agent.
  • Instruct your existing letting agent to release the deposit to the new agent.
  • Notify your tenant about the change and give them the details of the new agent.

And that’s it! A few simple emails and you can be on the road to a less stressful, more successful landlord/letting agent relationship. Your new letting agent will keep a check to ensure all the right documentation arrives, and you can rest easy.

For more information about our property management services, get in touch with me Janice Molloy,  at Parkview Property.