Before a tenancy starts

Deciding what rent to charge

It is important to set the rent at a realistic level. If a property is marketed at too high a price, you will not attract any tenants. If a property is marketed at too low a price, you may not attract the most suitable tenants and you will miss out on potential income.

For budgeting purposes, you should allow for regular costs such as letting agent's fees and mortgage payments. You should also allow room in your budget for 'void periods' where the property is vacant and you are not receiving any rental income.

Using a good letting agent, ensuring tenants are properly referenced, and maintaining the property to a high standard can help you reduce your void periods.

We can help you decide on the appropriate amount of rent to ask for your property. We can also offer advice on average maintenance costs and void periods for the type, size and location of your property.

Finding a tenant

Landlords can find tenants through a letting agent, or by placing private advertisements locally and online.

Most tenants will start their search for a property online. The major websites for rental properties are Rightmove.co.uk, Zoopla.co.uk, Findaproperty.com and Primelocation.com

A good letting agent will advertise your property on all of these websites. Most letting agents will not charge an upfront fee for advertising your property and you will only pay a fee once a suitable tenant has been found and successfully referenced.

Referencing the tenant

Selecting the right tenant is the single most important factor in the success of your let. Good tenants pay the rent on time and look after your property.

Employment - The most important thing to consider when assessing a potential tenant is their employment history. Are they permanently employed? Have they got a stable work history? Are they earning enough to cover their rent payments and any other outgoings?

An employer's reference should be supplied on headed paper and should confirm that the applicant is employed, how long he or she has worked for the company, whether there is any upcoming change to their employment and their annual salary.

The combined gross salaries of all tenants should be at least two and a half times the rent payment in order for their rent to be affordable. Awarding a tenancy to those who are earning less means you are more likely to encounter problems with rent payments.

Example: If the rent is £750.00 per month, the tenant/s should be earning a gross salary of £1,875 per month (£22,500 per year)

Credit history - You also need to ensure a potential tenant has a good history of paying their debts. A credit search will reveal whether somebody has any County Court judgements, Involuntary Arrangements (IVAs) or has been declared bankrupt. A credit check will also reveal whether a tenant is registered on the electoral roll. Be wary of tenants who cannot be verified at addresses they supply as they may have other addresses where debts are registered.

Previous landlords or letting agents - Previous landlords or letting agents can supply information on how well your prospective tenant's conducted their tenancies in the past. Did they pay their rent on time each month? Did they look after the property and give the correct notice when they left? Did any deductions have to be made from their deposit?

References from previous letting agents should be supplied on headed paper. Where possible, a reference from a previous private landlord should also be in writing.

Instinct and experience - Professional landlords and letting agents will use their many years of experience to help decide whether a potential tenant is right for a tenancy. Face to face interviews can be just as important in helping to decide on a particular tenant as the credit check, employer and previous landlord referencing can be.

Tenant referencing at Phillip James Letting Agents - Our tenant application process and strict referencing criteria ensure our landlords get the best quality tenants.

We carry out the following checks on prospective tenants:

Affordability check
Identification check
Address verification
Credit check
Bank account verification
Employer reference
Accountant reference
Previous landlord check
Previous letting agent check

When tenants are referenced by Phillip James Letting Agents, landlords can enjoy the extra peace of mind that comes with Rental Guarantee and Legal Expenses which pays the rent to a landlord in the event that a tenant becomes unable to pay it.

Council tax

Every property in the UK has an annual council tax rate that is calculated using the council tax band (properties are given a band based on their value), the number of occupants and the financial status of those occupants.

It is usually the responsibility of the tenant to pay the council tax during their tenancy. It may also be possible for landlords to obtain an exemption for council tax during periods when the property is untenanted.

We will contact the local authority and transfer the council tax when tenant/s move in or out of your property.

Find out the council tax band for your property.

Utilities and utility providers

It is usually the responsibility of the tenant/s to pay for utilities such as gas, water and electricity. Landlords are responsible for any standing charges whilst the property is empty.

Meter readings will be taken at the start and end of each tenancy and we will arrange for the transfer of utilities to new tenants.

Telephone and television

Tenants will normally be responsible for their own television licence and telephone bills.

As a landlord, you will need to supply a working television aerial. You do not need to supply a telephone line although properties with telephone/internet facilities available are more attractive to tenants.

Cleaning

Generally speaking, the better the condition of a property when the tenancy starts, the better condition it is in when the tenant vacates.

You should therefore ensure your property is properly cleaned before a tenant moves in. You should also have a professional inventory which lists and photographs the condition of the property at the start of the tenancy. This document can be used to prove that any deductions you need to make from the tenant's deposit at the end of the tenancy are fair.

Taking an inventory

An inventory provides a detailed description of the condition of a property. It is taken at the start of a tenancy and includes photographs to help demonstrate the condition of a property just before tenants moved in. Tenants will sign the inventory to agree the condition of the property.

Landlords have to be prepared for some fair wear-and-tear, but otherwise you can reasonably expect your property to be handed back to you in a similar condition as it was when a tenancy started.

If there is damage that goes beyond fair wear-and-tear, then you can make a deduction from the tenant's deposit. However, new tenancy deposit legislation means the tenants have to agree that your deduction is fair. If they do not, then the decision on whether the landlord can make that deduction is made by an arbitration service.

If a landlord needs to prove that a deduction is fair, the inventory is used to demonstrate to the arbitration service that a tenant is at fault. Inventories are most effective when they are compiled by independent inventory specialists and not landlords or letting agents (as these are often seen to be biased).

Phillip James Letting Agents use a number of third party inventory providers to conduct inventories on behalf of landlords.

Check-in and keys

On the day the tenancy starts, the first month's rent and the security deposit should be paid, the tenancy agreement can be signed and then the keys handed to the tenant/s. Phillip James Letting Agents will visit the property with the new tenants to carry out a check-in procedure. This involves checking meter readings and working through the inventory with the tenant/s.

Preparing a property for letting