letting software

Landlords Looking to Make Additional Revenue From Tenants Alongside Rental Payments

By Chris Horne

Most landlords see the relationship between tenant and landlord as pretty straight forward & passive. The landlord provides the tenant with four walls and sometimes a bed to sleep on. In return a tenant pays the landlord an agreed rent. Occasionally if landlords are lucky they can put the rent up and that is about as complicated as it gets.

The main job for a landlord is to manage the costs such as the buy-to-let mortgage costs and maintenance costs as this will in turn maximise a landlord’s net rent. The net rent being the bit left over after a landlord’s costs have been paid each month generally referred to as a landlord’s cash-flow.

Additional revenues for landlords from tenants

However, recently and prompted by the credit crunch I’ve been seeing more and more landlords using their relationship with their tenants to make additional revenues. This is only sensible and reflects what many companies and businesses do in the wider economy.

Once a business has a customer, their next step is to see how they can retain that customer but then see if there are any way that they can make additional revenue from that customer by selling them additional services. In business parlance it’s all about increasing the average spend.

Let’s examine where it is possible for a landlord to look to make additional income from their tenant in perfectly legitimate and legal ways in order to help landlords cope with their rising costs.

Firstly, the main area where some landlords have for some time being legitimately charging a tenant money is in connection with the management costs of setting up and ending a tenancy.

For years landlords have accepted the whole vetting, letting and moving out of tenants as just part of the process of renting their investment property. However, increasing demands by government in terms of additional regulations such as the Tenancy Deposit Scheme (TDS) and HMO licensing and the soon to be introduced Energy Performance Certificates (EPCs) all increases the time burdens on landlords. These regulatory burdens often come with extra financial costs but most importantly they all take additional time without producing any additional revenue for landlords.

These administrative tasks are what in the service sector would class as professional services. For years many letting agents have been ‘making hay’ out of charging large fees to carry out these basic tasks. Residential landlords on the other hand being largely small amateur outfits have largely chosen to absorb these costs within their overall costs to their business. Given that landlords carry them out themselves and it mainly involves their own time and therefore does not involve incurring any direct financial cost; landlords have generally seen it as just part of the letting process. However, closer research amongst letting agent shows that many of these tasks are charged for.

Some are charged individually, or others collectively as part of the initial letting fee. A breakdown of these costs produces the following as legitimate fees that a landlord could charge their tenant for their professional services as part of the setting up and management of the tenancy.

Possible letting services & possible charges

Credit check £20

Interview charge £20

Tenancy Agreement £20

Setting up DD £20

TDS (guarantor fee) £50

Check in / inventory £50

Check out £50

TOTAL £230

Toby Hone of the website the-home-place in his book on surviving the credit crunch urges landlords to not ignore the potential revenue benefits of charging. He makes the simple point that:

“Why don’t you as the landlord charge your prospective tenant a fee. In most cases the letting agent would do this as a matter of course anyway. ”

His view is that a landlord could charge between £150-250 each time they let a property. Given that the average tenancy last 9 months then this could equate to £200-£330+ each tenant each year. Where a landlord has a multi let where each room is rented out then this could equate to many hundreds if not thousands of pounds each year.

Another example of charging your tenants a fee is where landlords shun the TDS in favour of using a guarantor. This is particularly popular in student letting and our student landlord expert Bee in the bonnet shows how this can be done. In this case it is perfectly legitimate for a landlord to make an admin charge for this.

Once the tenants moves out the landlord also needs to carry out a ‘check out’ for which it is also reasonable to charge a fee for.

Non-performance tenancy charges

There are other charges that the landlord should have set up automatically as part of the tenancy. These are more penalties in respect of non-performance of the tenancy agreement but nevertheless they should be in place. In a tenancy agreement it is worth installing a provision with the Assured Shorthold Tenancy agreement that includes a £35 admin charge for any late payment along with an interest charge payable by the tenant on any overdue amounts of 5% above the Bank of England base rate.

Additional services

Landlords should be aware of the possibilities of charging their tenants for additional services. Just as today consumer is always looking to ease the burden of everyday humdrum chores so tenants are often quite often happy to pay for extra services. For instance many busy professional tenants would be happy to splash out a few extra quid in rent in order to benefit from a wireless computer network or satellite TV. Once installed, these things will generate small but tangible additional revenue for a landlord.

Other services that could be charged for are a laundry & ironing service, together with a cleaner. These are all services that could potentially be attractive to your tenant and which could provide you with valuable additional revenue.

When the tenant leaves

Even when the tenant leaves this could be an additional source of revenue for a landlord. This is because if the tenant fails to clear there rubbish then a landlord is quite within their rights to make a reasonable charge for the disposal of this. Not only is there the disposal of these items but, with the advent of E-bay frequently one person’s junk is another person’s lucky find. An enterprising landlord can often find a use or value out of a previous tenants cast offs.

PropertyHawk is aimed directly at UK Landlords. The site incorporates free property management software letting a landlord track their financial data relating to their property portfolio. A mass of information on BTL mortgages and landlord insurance.

Article Source: http://EzineArticles.com/?expert=Chris_Horne
http://EzineArticles.com/?Landlords-Looking-to-Make-Additional-Revenue-From-Tenants-Alongside-Rental-Payments&id=1464234

Powered By WP Footer

letting software

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

Powered By WP Footer