It is a sad fact of life, but nothing is 100% certain. Unfortunately, we sometimes have to deal with a traumatic change, such as a relationship finishing or a job loss. Both of these can cause both emotional and financial hardship - especially to people left struggling to make ends meet.
One solution that for those facing financial hardship may want to consider is offering a spare room to let to a student or young professional. The welcome income that comes from offering a spare room to rent can make all the difference to a cash-strapped homeowner or tenant.
Plus, if the spare room to let is in your home and fully furnished it should qualify for the Government's Rent a Room Scheme. Through this Scheme a homeowner or tenant can currently earn up to £4,250 of rental income tax-free, although they will need to pay tax on any rental income above this threshold.
How the Rent a Room Scheme works
The Government's Rent a Room can be of help to homeowners and tenants that want to take in lodgers and boost their income. Here are the Scheme's main rules:
• The room to let must be fully furnished and part of your main residence.
• A separate self-contained flat will not qualify as part of the Scheme.
• You don't have to be the homeowner to take advantage of the Rent a Room Scheme. A tenant can also take advantage of the scheme providing they have the landlord's consent.
• You can offer a room to rent in either a flat or a house, providing that it is fully furnished and part of your main residence.
Income tax and the Rent a Room Scheme
Whether you'll benefit from offering a room to rent under the Rent a Room Scheme will depend on your particular circumstances. Bear in mind that if you offer a room to let in your home under the Scheme you can't claim expenses, such as utilities bills, repairs, council tax or insurance.
So, before you decide to opt into the Scheme with your spare room to rent you should look at all your expenses (including council tax) and the total rental income to see if you are better off in or out of the Scheme.
If your costs are fairly hefty, then you may be better off declaring all your rental income and claiming your expenses, so that you are only taxed on the net income.
If you don't usually file for income tax and decide to opt into the Scheme, and your income is below the tax threshold (currently £4,250) the income tax exemption will be automatic and won't require any actions on your part.
If want to opt in and the amount you earn is above the tax threshold, you will need to inform your tax office. This can be done by filing in a tax return and claiming the tax-free allowance.
If you think you are better off claiming expenses you can opt out of the Scheme by simply completing a tax return, making sure you declare all the earnings and expenses from renting your spare room on the relevant pages.
If you are finding it hard to make ends meet because of a change in your circumstance, becoming a live-in landlord through the Rent a Room Scheme may be a good way to help get a bit of extra income to help pay the household bills. Offering a spare furnished room to rent may give you that financial cushion you need.
For more information about marketing rental property contact to vibha@u-rooms.com or to list your property contact u-rooms.com
Article Source: http://EzineArticles.com/?expert=Samul_Swan
Friday 15 October 2010
Tuesday 7 September 2010
Letting Tips for Landlords Renting Property to Students
Here are further tips and advice for landlords letting rental property for students. A potentially high maintenance sector of the property rental market can be made easier for landlords by following these helpful tips.
An Inventory or Schedule of condition is vitally important when landlords let a property to students. Landlords should try and find a free example of an inventory on the Internet and compile a detailed 'Inventory, Schedule of Condition and Safety Check List'. It is worth landlords spending time on compiling an inventory that records every detail of a rental property, its contents, decoration and condition so that any damage or loss occurred during a tenancy can be claimed back.
The safety section should include: number of smoke/heat alarms, carbon monoxide alarm, make a note 'all tested and in working order'; Landlord's Gas Safety Certificate, PAT (Portable Appliance Test certificate of the Landlord's electrical goods) and the 5 year, electrical certificates all supplied; burglar alarm, include note 'demonstrated and in working order' and fire safety equipment has been checked.
Landlords should attach photos, dated and signed by both tenant and landlord on the reverse. They should include photos of all rooms, showing positions of furniture plus key potential problem areas such as inside the cooker, behind kitchen appliances, cleanliness of lounge carpet and the condition of the garden and lawn, if they are maintaining this area.
Landlords should write 'cleaned to a good standard' against rooms in the inventory and provide a definition, so there can be little doubt as to what this means, such as: ''No dust or debris behind, underneath and on top of furniture, fixtures and appliances; cookers are clean and virtually free from burnt on grease, particularly on oven racks and trays; fridges, freezers and microwaves are clean and empty; Venetian blind slats, curtains and covers are clean; hard floors are mopped and any mirrors are clean; bins are washed; walls are free from washable marks and blu-tak type stains.' and so on. A detailed inventory will support claims for damage and cleaning at the end of the tenancy.
Checkout leaflet
Landlords should devise a simple checkout leaflet, outlining the procedures and expectations at the end of the tenancy. Give it to the students at the start of the tenancy. When issuing a Section 21 notice, probably towards the end of the tenancy, remind them about the checkout leaflet.
Duty of care
A landlord's 'duty of care' should include a thorough safety check of their buy-to-let property. A landlord should also provide a 'Household Folder', packed with helpful information. Contents could include: Moving and Living in the Premises, Student and Landlord Responsibilities, General Health and Safety, Location of Services in the House and Electrical Safety, Disposal of Refuse, Condensation, Pest Control, Use of Candles, Noise, Nuisance and Neighbour Disputes, Who is Responsible for what Repairs, Cleaning, Visits by the Landlord, Crime Prevention, Fire Safety, First Aid and Useful/Emergency Telephone Numbers. The landlord's 'Household Folder' could also contain the legal certificates, instructions on the use of appliances and the buy-to-let investment's property's checkout leaflet.
Avoid the Tenancy Deposit Scheme (TDS)
Landlords should stop taking a security deposit and avoid the Tenancy Deposit Scheme altogether. Instead when the contract is signed, landlords should charge each student tenant a perfectly legal, £50 non-returnable administration fee. Landlords shouldn't bother paying for a credit reference check. Students usually have very little credit history. Instead, landlords should create a separate guarantor agreement, which is usually a parent, for each tenant and include 'joint and several' responsibility. Landlords should remind guarantors that if they default 'you may record this with a Credit Referencing Agency and IDS Ltd, who may supply the information to other credit companies or insurers in the quest for the responsible granting of tenancies, insurance and credit.' Landlords should give guarantors the checkout leaflet, so they understand the standards expected at the end of the tenancy. Landlords should make sure the agreement is a deed by including the statement 'This document is a DEED and has been executed as a DEED. This Deed of Guarantee is governed by English Law and is subject to the exclusive jurisdiction of the courts of England and Wales.' Increasingly foreign students rent buy-to-let property and in an extreme case landlords don't want to end up in a foreign court. If landlords are storing guarantor details, register under the 'Data Protection Act'.
If you as a landlord no longer take a security deposit; you must not harass students for money for damage and lack of cleaning, instead send a duplicate copy of your request for compensation to the student's guarantor and they will do the legal harassment for you. Landlords should keep copies of all correspondence.
Insurance cover for a landlord's emergency plumbing
Landlords should purchase 24-hour emergency plumbing cover. One example of this is British Gas Homecare Agreement for central heating, plumbing, drains and electrics. The British Gas plumbing and drains insurance will cover the replacement of a washer in a leaking tap.
As far as the tenant's responsibility for replacing tap washers, I would suggest a landlord includes a general clause in the tenancy agreement such as:
'Replace all defective electric light bulbs, fluorescent tubes, starters, fuses, tap and flexible pipe connections to a washing machine washers and vacuum filters and belts ensuring all reasonable safety precautions are observed.'
Landlords should ensure that all their properties have accessible inline valves in the pipe work, so that leaking taps are easily isolated in order for the repair to be carried out by the tenant, if necessary.
Tenantable Repairs
Landlords should also include the following under the definition of Tenantable Repairs in their modified tenancy contract which aims to shift the responsibility for minor repairs onto the tenant & make this clear from the outset:
"Tenantable Repair" means you are responsible for carrying out safely, day to day small repairs that any home-occupier would normally do e.g. re-hanging a
cupboard/wardrobe door, replacing light bulbs and batteries, tightening screws on furniture and fixtures, refitting a door handle, bleeding radiators
of air, replacing a tap washer, removing mould, refitting a toilet seat or toilet roll holder, tightening or replacing a washer in a flexible water pipe on a washing machine. This list is indicative and not prescriptive of the types of reasonable every day repairs that need to be done to keep the Premises in the same condition as at the start of the Tenancy. This excludes items, which the Landlord has responsibility in law.
How does it work? The tenant either makes the repair. This is easy with inline valves in place or in one particular case they paid for someone to do it for them.
I suggest that it offers a landlord a way of reducing their repair costs. We would suggest that the wording in the clause is slightly amended to include the following sentence as well.
"BUT nothing in this clause imposes on the Tenant any duty placed on the Landlord by:
a. s.11 of the Landlord and Tenant Act 1985; or
b. this Agreement."
Landlords in interpreting tenant repairs & responsibilities may find it useful to refer to Lord Denning judgment in the case Warren v Keen (1954)
Warren v Keen (1954)
(Court of Appeal, 1953)
In this judgement, Denning LJ stated:
"What does 'to use the premises in a tenant-like manner' mean ? ..The tenant must take proper care of the place. He must, if he is going away for the winter, turn off the water and empty the boiler. He must clean the chimneys when necessary, and also the windows. He must mend the electric light when it fuses. He must unstop the sink when, it is blocked by his waste. In short, he must do those little jobs about the place, which a reasonable tenant would do. In addition, he must, of course, not damage the house wilfully or negligently; and he must see that his family and guests do not damage it; and if they do, he must repair
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 http://www.propertyhawk.co.uk
Article Source: http://EzineArticles.com/?expert=Chris_Horne
An Inventory or Schedule of condition is vitally important when landlords let a property to students. Landlords should try and find a free example of an inventory on the Internet and compile a detailed 'Inventory, Schedule of Condition and Safety Check List'. It is worth landlords spending time on compiling an inventory that records every detail of a rental property, its contents, decoration and condition so that any damage or loss occurred during a tenancy can be claimed back.
The safety section should include: number of smoke/heat alarms, carbon monoxide alarm, make a note 'all tested and in working order'; Landlord's Gas Safety Certificate, PAT (Portable Appliance Test certificate of the Landlord's electrical goods) and the 5 year, electrical certificates all supplied; burglar alarm, include note 'demonstrated and in working order' and fire safety equipment has been checked.
Landlords should attach photos, dated and signed by both tenant and landlord on the reverse. They should include photos of all rooms, showing positions of furniture plus key potential problem areas such as inside the cooker, behind kitchen appliances, cleanliness of lounge carpet and the condition of the garden and lawn, if they are maintaining this area.
Landlords should write 'cleaned to a good standard' against rooms in the inventory and provide a definition, so there can be little doubt as to what this means, such as: ''No dust or debris behind, underneath and on top of furniture, fixtures and appliances; cookers are clean and virtually free from burnt on grease, particularly on oven racks and trays; fridges, freezers and microwaves are clean and empty; Venetian blind slats, curtains and covers are clean; hard floors are mopped and any mirrors are clean; bins are washed; walls are free from washable marks and blu-tak type stains.' and so on. A detailed inventory will support claims for damage and cleaning at the end of the tenancy.
Checkout leaflet
Landlords should devise a simple checkout leaflet, outlining the procedures and expectations at the end of the tenancy. Give it to the students at the start of the tenancy. When issuing a Section 21 notice, probably towards the end of the tenancy, remind them about the checkout leaflet.
Duty of care
A landlord's 'duty of care' should include a thorough safety check of their buy-to-let property. A landlord should also provide a 'Household Folder', packed with helpful information. Contents could include: Moving and Living in the Premises, Student and Landlord Responsibilities, General Health and Safety, Location of Services in the House and Electrical Safety, Disposal of Refuse, Condensation, Pest Control, Use of Candles, Noise, Nuisance and Neighbour Disputes, Who is Responsible for what Repairs, Cleaning, Visits by the Landlord, Crime Prevention, Fire Safety, First Aid and Useful/Emergency Telephone Numbers. The landlord's 'Household Folder' could also contain the legal certificates, instructions on the use of appliances and the buy-to-let investment's property's checkout leaflet.
Avoid the Tenancy Deposit Scheme (TDS)
Landlords should stop taking a security deposit and avoid the Tenancy Deposit Scheme altogether. Instead when the contract is signed, landlords should charge each student tenant a perfectly legal, £50 non-returnable administration fee. Landlords shouldn't bother paying for a credit reference check. Students usually have very little credit history. Instead, landlords should create a separate guarantor agreement, which is usually a parent, for each tenant and include 'joint and several' responsibility. Landlords should remind guarantors that if they default 'you may record this with a Credit Referencing Agency and IDS Ltd, who may supply the information to other credit companies or insurers in the quest for the responsible granting of tenancies, insurance and credit.' Landlords should give guarantors the checkout leaflet, so they understand the standards expected at the end of the tenancy. Landlords should make sure the agreement is a deed by including the statement 'This document is a DEED and has been executed as a DEED. This Deed of Guarantee is governed by English Law and is subject to the exclusive jurisdiction of the courts of England and Wales.' Increasingly foreign students rent buy-to-let property and in an extreme case landlords don't want to end up in a foreign court. If landlords are storing guarantor details, register under the 'Data Protection Act'.
If you as a landlord no longer take a security deposit; you must not harass students for money for damage and lack of cleaning, instead send a duplicate copy of your request for compensation to the student's guarantor and they will do the legal harassment for you. Landlords should keep copies of all correspondence.
Insurance cover for a landlord's emergency plumbing
Landlords should purchase 24-hour emergency plumbing cover. One example of this is British Gas Homecare Agreement for central heating, plumbing, drains and electrics. The British Gas plumbing and drains insurance will cover the replacement of a washer in a leaking tap.
As far as the tenant's responsibility for replacing tap washers, I would suggest a landlord includes a general clause in the tenancy agreement such as:
'Replace all defective electric light bulbs, fluorescent tubes, starters, fuses, tap and flexible pipe connections to a washing machine washers and vacuum filters and belts ensuring all reasonable safety precautions are observed.'
Landlords should ensure that all their properties have accessible inline valves in the pipe work, so that leaking taps are easily isolated in order for the repair to be carried out by the tenant, if necessary.
Tenantable Repairs
Landlords should also include the following under the definition of Tenantable Repairs in their modified tenancy contract which aims to shift the responsibility for minor repairs onto the tenant & make this clear from the outset:
"Tenantable Repair" means you are responsible for carrying out safely, day to day small repairs that any home-occupier would normally do e.g. re-hanging a
cupboard/wardrobe door, replacing light bulbs and batteries, tightening screws on furniture and fixtures, refitting a door handle, bleeding radiators
of air, replacing a tap washer, removing mould, refitting a toilet seat or toilet roll holder, tightening or replacing a washer in a flexible water pipe on a washing machine. This list is indicative and not prescriptive of the types of reasonable every day repairs that need to be done to keep the Premises in the same condition as at the start of the Tenancy. This excludes items, which the Landlord has responsibility in law.
How does it work? The tenant either makes the repair. This is easy with inline valves in place or in one particular case they paid for someone to do it for them.
I suggest that it offers a landlord a way of reducing their repair costs. We would suggest that the wording in the clause is slightly amended to include the following sentence as well.
"BUT nothing in this clause imposes on the Tenant any duty placed on the Landlord by:
a. s.11 of the Landlord and Tenant Act 1985; or
b. this Agreement."
Landlords in interpreting tenant repairs & responsibilities may find it useful to refer to Lord Denning judgment in the case Warren v Keen (1954)
Warren v Keen (1954)
(Court of Appeal, 1953)
In this judgement, Denning LJ stated:
"What does 'to use the premises in a tenant-like manner' mean ? ..The tenant must take proper care of the place. He must, if he is going away for the winter, turn off the water and empty the boiler. He must clean the chimneys when necessary, and also the windows. He must mend the electric light when it fuses. He must unstop the sink when, it is blocked by his waste. In short, he must do those little jobs about the place, which a reasonable tenant would do. In addition, he must, of course, not damage the house wilfully or negligently; and he must see that his family and guests do not damage it; and if they do, he must repair
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 http://www.propertyhawk.co.uk
Article Source: http://EzineArticles.com/?expert=Chris_Horne
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