buy to let

How Can Landlords Keep Their Tenants Warm This Winter?

By Chris Horne

“Save on heating bills, put them on the fire” I’ve heard one landlord remark. Landlords should clearly implement a slightly more responsible attitude.

Seriously with the last vestiges of the ‘Summer’ disappearing, a landlord’s thoughts naturally turn towards securing their buy-to-let investment property for the Winter. This probably means a landlord trying to get the various outside jobs done before the weather turns.

One concern for any responsibly landlord is to ensure that the tenants are warm. This is not only a concern but also a legal obligation under section 11 of the Landlord & Tenant Act 1985

“(c) To keep in repair and proper working order the installation in the dwelling for space heating and heating of water.”

Whilst this legislation does not set out any legal minimum in terms of the temperature, keeping tenants warm does make good business sense. A warm tenant is a more likely to be happy tenant and therefore more likely to stay longer. A cold tenant is very likely to be off as soon as they can, exposing the landlord to a possible void period and to additional letting costs.

There are two ways that a landlord can make their property warmer. Firstly a landlord can insulate their buy-to-let investment property more effectively and secondly a landlord can look to increase the effectiveness of their heating system.

INSULATION IN RENTAL PROPERTY

Many buy-to-let residential properties particularly the older buy-to-let properties have sub-standard insulation. There are a number of ways that a landlord can improve the insulation of their buy-to-let investment property.

The main ones are:

Cavity wall insulation

Insulation in the loft

Draft proofing

Pipe and tank insulation

Glazing – normally installation of UPVC double glazing

There is some excellent advice on the Energy Saving Trust website on the kinds of ways landlords can insulate their investment properties, the costs involved and the potential financial savings.

Insulation doesn’t need to cost landlords the earth

The big issue that landlords have with the laudable aim of energy conservation is that, whilst the capital investment is incurred by them as the landlord; it is the tenant that effectively receives much of the financial benefit in the form of cheaper heating bills.

However, what landlords may not realise is that recent changes in the tax system means that individual landlords (and other landlords who pay income tax) who let residential property and install loft insulation, cavity wall insulation and solid wall insulation to properties have been able to claim a deduction in their income tax bill, this is called the Landlords Energy Saving Allowance (LESA).

The maximum amount which can be claimed is £1,500 per property.

Following the 2006 Budget, from 6th April 2006 the Landlords Energy Saving Allowance (LESA) has been extended to enable landlords to also claim the allowance for expenditure from installing draught-proofing and for insulating hot water systems in dwelling houses which they let.

Further information is available from Her Majesty’s Revenue and Customs.

Landlords do however need to be wary that they do not by improving their residential investment properties insulation, then cause damp problems through inadequate ventilation.

IMPROVING THE HEATING

The other way a landlord can keep their tenants warm and happy is by improving the heating. The vast majority of housing including buy-to-let investment properties now have central heating. In 2005 the English House Condition Survey found that just under 9 out of every 10 properties (88%) had central heating a further 7% had storage heaters.

The reality therefore for most landlords is that an improvement to the heating system involves an upgrade to the central heating system. The efficiency and effectiveness of a heating system largely depends on the type and age of the boiler, with most boilers lasting between 10-15 years. The difficulty for many landlords can be deciding when to upgrade to a new model. I was faced with this exact conundrum recently. I had a problem with a 10 years old boiler which packed up depriving tenants of hot water & heating making prompt action vital. The plumber suspected it was one of two parts the gas valve or the PCB board, both costing over £150 with fitting costs on top.

What did I do? Risk having one part fitted to find out it was actually the other that needed replacing? Then potentially having replaced 2 parts would I have been better off having a new boiler fitted at the outset? In the end I contacted the manufacturer and their technical department were able to run through a few diagnostic tests to pinpoint the part I needed. I am now hoping that the boiler lasts several years longer before it has to be replaced by a new condensing boiler.

Condensing boilers

Many landlords may not be aware that since the change in the Building Regulations in 2005 all newly fitted boilers have to be high efficiency, which generally means condensing boilers.

Condensing boilers are have also required to be fitted in Scotland since 1st May 2007 with the revision of section 6 of the Building Regulations.

A high efficiency condensing boiler works on the principle of recovering as much as possible of the waste heat which is normally rejected to the atmosphere from the flue of a conventional (non-condensing) boiler. The best high efficiency condensing boilers convert more than 90% of their fuel into heat, compared to 78% for conventional types. I found this useful site for a ranking of boilers in relation to their efficiency.

How do they work?

The extra efficiency is accomplished by using a larger heat exchanger or sometimes two heat exchangers within the boiler, which maximises heat transfer from the burner as well as recovering useful heat which would normally be lost with the flue gases. When in condensing mode (condensing boilers do not condense all the time) the flue gases give up their ‘latent heat’ which is then recovered by the heat exchanger within the boiler. As a result the temperature of the gases exiting the flue of a condensing boiler is typically 50-60°C compared with 120-180°C in a current non-condensing boiler. At the same time an amount of water or ‘condensate’ is produced.

The fact is if a landlord’s boiler is between 10-15 years old then it probably is not efficient by modern standards. Replacing a landlord’s old boiler with a new high efficiency condensing boiler is likely to save around a third of the heating bills straight away.

Costs

A new condensing boiler will cost about £750 inc. vat for a decent make.

However the additional plumbing kit will probably cost another £250 and then there is the fitting costs of at least £250. Bank on at least £1250.

Having purchased a new boiler landlord can then insure themselves against further maintenance costs by taking out boiler insurance.

I would caution landlords from automatically taking out this type of cover without carefully considering the benefits. This is mainly that it guards a landlord against an unexpected large bill. If a landlord’s cash-flow is stretched then this might be the safe option. However landlords should appreciate that at a minimum of £100 pa the cost of the insurance over the lifetime of the boiler would amount to the entire replacement cost. Therefore, they may be better off setting up a monthly ‘sinking fund’ equivalent to that of the insurance. This way they can build up a cash fund that is available should disaster strike. Should this not happen then the money can go towards the eventual replacement cost of the boiler.

One thing is for sure, keeping the tenants warm and happy this Winter isn’t getting any easier or cheaper!

Chris Horne is an experienced landlord and property professional who now runs the website Property Hawk, a site aimed directly at UK Landlords. The site incorporates free property management software that enables landlords to track all their financial data relating to their portfolio. It allows users to print tenancy agreements and other forms FREE FOREVER. The site generates a real time rent book for each property as well as calculating a landlords tax liability. The service is totally free to use at propertyhawk.co.uk

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http://EzineArticles.com/?How-Can-Landlords-Keep-Their-Tenants-Warm-This-Winter?&id=783091

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buy to let

A Tenant Dissapears from a Rental Property – What Should a Landlord Do?

By Chris Horne

In many ways it’s the landlord’s worst nightmare.

You as the landlord turn up one morning unexpectedly and there it is; your buy-to-let property, empty and abandoned like the ‘Mary Celeste’. With any luck the tenant has just removed themselves and their possessions and not any of your residential investment property. Unfortunately, I was not so lucky as one New Year when I arrived at my residential investment property to discover that half of my new kitchen had also been removed, along with a new washing machine and fridge freezer. To make it worse just as I was digesting this information I heard a knock on the door. It was a prospective tenant coming to have a look around my buy-to-let property. I was it would be fair to say, pretty speechless.

What to do?

The first thing a landlord shouldn’t do is over-react and panic. Take a sharp in-take of breath and then a landlord should try and remain calm.

Unfortunately, if there are no forced signs of entry then buy-to-let contents insurance will not cover a landlord for their losses. It is worth a landlord reporting any theft to the police so that if should you catch up with your tenant at some stage the extent of your losses are documented and can be verified.

The other thing is a landlord should not assume abandonment, and go about changing locks on the assumption that the tenant has given up their tenancy. A tenant’s disappearance does not bring a tenancy to an end, even where the tenant is no longer paying the rent and has removed half a landlord’s kitchen as in my particular case. What a landlord needs to do is follow the legally required steps to bring a tenancy to an end by either issuing a section 8 or section 21 notice.

Landlords tracing a tenant

A landlord firstly should ensure that they obtain possession of their buy-to-let property legally to enable them to re-let their residential investment property. Landlords however will also want to ensure that they get any monies that were due to them before the tenants disappeared. This will probably involve taking the tenant to court.

The problem with taking court proceedings against a tenant is that a landlord needs an address for the tenant to serve the legal documents on.

The process for landlords tracing a tenant can be easy or it may prove to be impossible, particularly where a tenant is a ‘professional tenant’ & is well versed at doing a bunk and leaving their debts behind whilst disappearing into the ‘ether’. The first step a landlord should use to try and trace a tenant is to compile a comprehensive list of information that a landlord has on the tenant. A landlord should have some basic details resulting from the original credit check they carried out on the tenant. Information such as previous address and date of birth will be useful in being able to potentially trace the absconded tenant.

For instance a landlord could then use these details and the facility provided by a company such as Tracemart to try and locate the tenant.

Alternatively a landlord could employ a dedicated tracing agent such as 1st Locate who will do all the leg work for a landlord. 1st locate offer a service where they assign one of their dedicated researchers to a landlord’s case on a no results no fee basis. This service will cost a landlord £35. They also offer landlords a trace and collect service which means that they will do the work of collecting the debt as well as tracing the tenant.

Once a landlord has a tenants address they are able potentially to take legal action through the courts against the tenant to recover the debt.

Landlords employing a private investigator

Where a landlord has a very large debt amounting to several thousands of pounds and is confident that the tenant has a sizeable income or assets, in which case a landlord could consider employing a private investigator. PI’s aren’t cheap and you will be looking at paying £30+ per hour for them meaning that bills can easily run into the hundreds if not thousands of pounds. However, a good one may be able to access information that you and I couldn’t and if it means finding a solvent professional tenant it could easily be worth it.

Word of warning for landlords

However, a word of warning also gained from personal experience. Even if the landlord is successful in getting a County Court Judgement then if the tenant has little or no income and no assets, the amount that a landlord will receive could mean that a tenant will take many years to pay off the debt. The likelihood is that payment will not be continuous. In this case a landlord is right to ask themselves whether it was worth the cost and effort involved & this question should always be asked early on in any proceedings.

Even where the tenant is working and the landlord obtains an attachment to earning Order the landlord will need details of where the tenant is working. This is because the landlord or solicitor acting for them will need the employer’s details in order to be able to write to them and instruct them to make payment. The good thing once this has been done an attachment of earnings order means that a landlord’s payment is automatically taken out of their tenant’s wages, by a tenant’s employee, before they receive their net wages in the same way as tax is paid through PAYE (pay as you earn).

Selling a landlords debt

I have heard about some landlords who have attempted to sell on their tenant’s debt to a debt collection agency. The reality is that a landlord who does this will forgo most of their debt. Even for a primary debt source i.e. a debtor who might also be a home-owner the most a landlord is likely to receive from the debt collecting company is around 30p in the pound or 30%. Where more likely it is a case of a tenant that has absconded and cannot be traced; the amount a landlord is likely to receive is in the low single figures – in other words effectively nothing!

The importance of landlords vetting their tenants

All this highlights the importance of a landlord doing a good job of vetting the tenant in the first place.

This includes carrying out a credit check on their prospective tenant. Getting a good tenant at the outset will minimise the chances that the tenant is likely to abscond. Where they do; a landlord should then have the background information necessary to stand a reasonable chance of at least getting part of their money back should the tenant decide to disappear into the night!

Chris Horne is an experienced landlord and property professional who now runs the website Property Hawk, a site aimed directly at UK Landlords. The site incorporates free property management software that enables landlords to track all their financial data relating to their portfolio. It allows users to print tenancy agreements and other forms FREE FOREVER. The site generates a real time rent book for each property as well as calculating a landlords tax liabilty. The service is totally free to use at http://www.propertyhawk.co.uk

Article Source: http://EzineArticles.com/?expert=Chris_Horne
http://EzineArticles.com/?A-Tenant-Dissapears-from-a-Rental-Property—What-Should-a-Landlord-Do?&id=877132

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