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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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Landlord Property Management Software – Evaluation and Analysis of Different Letting Software

By Chris Horne

What is property management software?

Property management software or as it is sometimes known, letting software is software that allows landlords to manage their rental business by enabling them to organise and store the data relating to a landlords letting business. There are a whole range of software companies that produce suites of property management software for landlords, often with various levels of functionality.

What functions can property management software be used for?

There are a whole range of functions that property management software can perform. The main things that property management software is used for in managing a landlords business is as follows:

∑ Recording rental payment from tenants

∑ Providing a financial overview of a landlord’s portfolio in respect of the buy-to-let mortgages secured against the residential investment portfolio and the total value of the residential investments

∑ Enabling a landlord to record key dates such as the dates for the landlord safety certificates or renewal of the landlords buy-to-let insurance

∑ Most landlord software packages will provide the key lettings forms required by the landlord such as: tenancy agreement, section 8 notice, section 21 notice for possession, section 13 notice for increase of rent, inventory.

∑ The landlords and tenants contact details

∑ A means to calculate a landlord income tax liabilities

There is some property management software which offers much more than these basic functions. These ‘high end’ property management software suites are very much aimed at the professional full time landlord who probably has a portfolio of at least 10 residential investment properties and derives their main income from letting out residential property to tenants. The sort of additional functionality available in these property management software packages would be:

∑ Repair monitoring & maintenance schedules

∑ Invoice facility

∑ Preparation of advertising material relating to residential investment properties

∑ Account reconciliation

∑ Creation of a landlords own website to host their rental properties

∑ Financial report writing facility

For most landlords with several properties a basic property management software package is probably adequate to carry out their day to day landlord duties. In fact a more comprehensive property management software suite could be a disadvantage. This is because their complex nature featuring all the ‘whistle & bells’ means that for a landlord to learn how to operate the ‘high end’ property management software will take a landlord many hours if not days to understand and master. It will often mean a landlord having to go on courses and being instructed by the property management software company. This is both costly in terms of the landlord’s time and the overall price of the property management software package.

How much does it cost?

For the basic property management software package landlords should budget about £100. This type of landlord property management software will enable the landlord to carry out the basic management functions relating to their portfolio. For the more advanced facilities a professional landlord would have to pay several thousands of pounds for a full property management software suite. This will of course include full support by the software company and will probably include training on how to use the property management software.

It is also effectively possible for landlords to obtain property management software for free. There is one UK website for landlord’s called Property Hawk that provides within the website the basic functions of landlord software referred to earlier. Technically it isn’t the same as property management software in that it does not sit on the individual landlord’s computer. Instead the landlord’s data is kept on the website’s server. This means that the landlord can only access the data through an internet connection. It does have the advantage that the data relating to their residential investment portfolio is available to the landlord using any computer at home work or any where else they can get an internet connection, rather than only being available on their single chosen PC. It should also mean that should the landlord suffer a hardware failure or loss, that the landlord’s critical property management data is not lost.

What software should a landlord choose?

Landlords should consider carefully the advantages and disadvantages of using specialist property management software. For those landlords with a single property the advantages of purchasing a specialist package of property management software is probably not going to be worth the £100 purchase price given that much of the data recording can be done using a simple spreadsheet. Those landlords with several properties may find the added facilities of property management software useful in organising their residential investment portfolio, particularly if they are unfamiliar with spreadsheets or are not naturally good at organising their lettings business. Those landlords that use the Internet regularly and have good internet access at home, work or even remotely through 3G or WiFi may consider that a web based application is preferable; particularly if it is free to use.

For professional landlords that may employ specialist staff an outlay on ‘high end’ property management software amounting to several thousand of pounds may be justified for their residential investment business. This is because the efficiency savings may allow a landlord to quickly recoup the initial expenditure of the property management software package.

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/?Landlord-Property-Management-Software—Evaluation-and-Analysis-of-Different-Letting-Software&id=747373

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