New landlord seeks advice- does this scheme sound safe?

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  • New landlord seeks advice- does this scheme sound safe?

    I am about to enter the lettings game and I would like some reassurance/advice that I am not going to regret the whole thing in time to come.

    I am intending to let my primary residence and move onto a new build which is due for completion end of July 07.
    The property to be let is a 3bed semi, newly refurb'd.

    I have had a few valuations and they have ranged from £550-£725 so I have taken a average and done some calculations (which includes insurances), and will market the property @£650pcm, which leaves me abt £16-£18 in the black each month.

    The TA will be for 6mths and I was thinking of serving a S21 at the same time (obviously dated/timed after the TA has been signed).

    EA fees are roughly as follows on a no let on fee basis:
    1) 75% first months rent + VAT (includes AST, TDS, credit checks, References, adverts)
    2) First months rent + VAT (includes AST, TDS, credit checks, References, adverts)
    3) 75% first months rent + VAT £450min(includes AST, TDS, credit checks, References, adverts)

    Does this sound like a feasible plan? Is there any other advice you guys can offer me to make sure I dont shoot myself in the foot.

    Thanks in advance.....K
    Last edited by kfarmah; 22-06-2007, 22:02 PM. Reason: Trying to attract a response

  • #2
    I have looked thru a number of posts, and I am looking for some general newbie advice. If this has already been answered then plse point in the direction of this post.

    Cheers
    K

    Comment


    • #3
      Originally posted by kfarmah View Post

      ...and I was thinking of serving a S21 at the same time (obviously dated/timed after the TA has been signed).
      A seriously bad move. Lots of debate on this topic here. A decent (and savvy) tenant won't cop it. No way.

      If I was your tenant, I would:
      a) ensure the s21 is invalidated, or
      b) move out at the end of term without notice, (as this is what the s21 is telling me to do)

      Not a good way to promote harmonious T/LL relationship.
      Now signature free.

      Comment


      • #4
        property valuation

        Originally posted by kfarmah View Post
        I have looked thru a number of posts, and I am looking for some general newbie advice. If this has already been answered then plse point in the direction of this post.

        Cheers
        K
        hi there, i am confused of 1 particular thing that if the property is newly ref.d& isa 3 bed semi. why the rent is too low?

        Comment


        • #5
          property details

          ok that is a 3 bed semi detached , what area are you talking about & have you gone through a similar market value oon an average for proeprties like yours?

          Comment


          • #6
            If you issue a S21 at the beginning of the tenancy, are you not telling the tenant that he has to vacate on or before the termination date of the contract? It seems to me that he could then leave at any time before termination date without giving you any notice. Possibly, a third party would see this as contradictory. Mind you, there are different opinions on this and it would be interesting for some clear cut guidance.

            I would prefer a 12m AST with a 6m break clause, rather than a 6m AST, which could mean that you get a number of temporary tenants - may not be particularly good for the decoration.
            ASSUME NOTHING - QUESTION EVERYTHING!

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            • #7
              The property is newly refurb'd, and is achievable for a property in south Birmingham. So I will be quite happy with £650pcm which I think should be easy to get judging by the competition, and also based on the valuations I have had.
              As I said earlier I have taken a reasonable valuation, so I am not being greedy as one EA stated that I could achieve £695-£725.
              Here it is :
              http://www.rightmove.co.uk/viewdetai..._n=1&tr_t=rent

              (.....just for the record I am not trying to advertise)

              Re:S21 I am also getting a mixture of opinions. Some say it offers the most flexibility for both T/LL. Some say it maybe sending out the wrong signal to the T.

              So you think it would be better to serve a S21 only when required and not have it automatically happen at the end of the 6mth AST, by having a T sign it at the same time they sign the AST?

              I thought that when the 6mth AST expires and the S21 had been served that both parties LL/T only have to give 1mth notice (when the AST ends) as it switches to a periodic tenancy. Is my understanding correct ?

              Comment


              • #8
                Originally posted by kfarmah View Post
                I thought that when the 6mth AST expires and the S21 had been served that both parties LL/T only have to give 1mth notice (when the AST ends) as it switches to a periodic tenancy. Is my understanding correct ?
                I think I have just spotted the answer to this:
                1 mth T
                2 mth LL

                In line with the frequency of rent, ie if rent=3mths then 3mths is the T notice and 6mths for LL. Is that right ?

                Comment


                • #9
                  Originally posted by kfarmah View Post
                  I thought that when the 6mth AST expires and the S21 had been served that both parties LL/T only have to give 1mth notice (when the AST ends) as it switches to a periodic tenancy. Is my understanding correct ?
                  Thats why a savvy tenant will be so ^%$#ing p!ssed off at the s21 at the beginning.

                  It removes the tenants right to 2 months notice. Technically it removes any notice at all, though in practice the T has some time before court orders and bailiffs can be arranged.

                  There is no $#@!ing way I would ever live under an expired s21. I would move out without notice at the end of the fixed term because that is what the s21 is telling me.... GET THE %$#@ OUT OF MY HOUSE. And I would have every right to do so

                  It's bad business and morally reprehensible. Any LL that does this is a bum.
                  Now signature free.

                  Comment


                  • #10
                    Originally posted by lorenzo View Post
                    There is no $#@!ing way I would ever live under an expired s21. I would move out without notice at the end of the fixed term because that is what the s21 is telling me.... GET THE %$#@ OUT OF MY HOUSE. And I would have every right to do so

                    It's bad business and morally reprehensible. Any LL that does this is a bum.
                    All very well to adopt this attitude, but I think you'll find any letting agent will issue an S21 at the start of the tenancy... it's very much standard practice.

                    Comment


                    • #11
                      Originally posted by kfarmah View Post
                      In line with the frequency of rent, ie if rent=3mths then 3mths is the T notice and 6mths for LL. Is that right ?
                      No idea what you mean here. After the end of the fixed period of the tenancy, with no S21 notice having been served, the tenant needs to provide 1 months' notice to quit, and the LL needs to provide the tenant with 2 months notice. End of story.

                      Comment


                      • #12
                        Originally posted by Ericthelobster View Post
                        All very well to adopt this attitude, but I think you'll find any letting agent will issue an S21 at the start of the tenancy... it's very much standard practice.
                        It is the only SANE attitude to have. Either I move out or written confirmation that the tenancy will continue as either periodic or a new lease, thereby invalidating the s21.

                        If they are doing it, they are relying on tenants ignorance and/or misleading them to get away with it... even more disgraceful. The ethics of this is gutter level.

                        By moving out without notice, I am obeying the possession order. Think about that.
                        Now signature free.

                        Comment


                        • #13
                          kfarmah,
                          Unfortunately, you are being given some pretty lousy advice at the moment, with the exception of Ericthelobster. It is common practice for the S21 notice to be issued with the tenancy agreement. It could be issued 2 monthe before the end of the term with the same effect, but it does save the landlord having to remember to do it in time. It does also of course give the tenant 6 months notice! If you find you have got suitable tenants who you would wish to continue in the property after the term ends, you can tell them that you are happy for them to continue on a periodic tenancy after the end of the initial term. You will still be able to invoke the S21 notice if things go wrong later.
                          As a new landlord, you should try to either go on a course to get all the basic knowledge necessary, or read up on it. At the top of this page you can click on "books" and find titles which will give you all the info you might need eg there is one called "Renting out your property for Dummies" which I am assuming is endorsed by Landlordzone, and would put you on the right track. You can get into a lot of trouble if you are not aware of the tenants' statutory rights, not to mention landlords' duties.
                          By the way, once you have got the basic info. from a proper source under your belt, you could dispense with letting agents altogether and save yourself some money. I have been letting for very many years and never used an agent. I advertise in the local paper, have had a professional "to let" sign board made up with my email address and website address on it. The website shows photos of the interior of the property which the tenants can view to suss it out.
                          Good luck!
                          Nora

                          Comment


                          • #14
                            Originally posted by Ericthelobster View Post
                            All very well to adopt this attitude, but I think you'll find any letting agent will issue an S21 at the start of the tenancy... it's very much standard practice.
                            Winkworths doesn't issue a S21 at the start, although I can not speak for all their franchises. Their feeling is that you only issue a S21 when it is needed. They also feel that it is contradictory.
                            ASSUME NOTHING - QUESTION EVERYTHING!

                            Comment


                            • #15
                              Thanks Nora Kay and Ericthelobster, your comments confirm what I have read and also what I have been advised by other landlords.

                              I agree that once I am up and running that I will consider dispensing with LA's altogether, but at this moment in time I need to rely on them for my first let.

                              Thanks I will check out the links - however the decision to let has kinds come outta the blue so this forum is a god send !!!

                              Comment

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