The sales market may be hellishly slow, particularly over the summer, but it’s good news for agents, who are perfectly placed to ease the pain of clients and demonstrate their worth.
Let to let could be the solution for clients who are either unable to sell their property; unable to find their next dream home; currently unwilling to pay the hefty stamp duty bill they’d face if they purchased a new property; or perhaps they’re moving temporarily to secure a job or school place.
Here’s how to help clients get it right.
- Ensure the numbers add up
First things first: your client needs to ensure that the rental income they could secure on their property exceeds their monthly mortgage interest payment.
Buy-to-let mortgage lenders now require rental income to equate to at least 125% to anything up to 145% of these monthly payments.
Your client will also need to ensure that they pass lenders’ new stress test, which is designed to assess borrowers’ affordability. This means that rental income needs to exceed a monthly mortgage interest payment based on an interest rate of 5.5%, even if this is way above a borrower’s current mortgage rate.
It is key that borrowers can also afford to make any necessary repairs to their property during a tenancy, as well as upgrades to, for example, wiring, to meet regulatory requirements before a tenancy starts.
- Prepare the property
Why not go that extra mile and help your client to ensure that their property if fit for renting, even if they’re not paying for a full property management package with you. Who’s to say that they won’t do so in the future because of your excellent service to date?
From the wiring to the gas central heating, at the very least you can help direct them to where to check the regulatory requirements to which they have to adhere.
- Sweat the small stuff
Clients need to be aware that they can never sweat the small stuff enough, starting with arranging a comprehensive tenancy agreement. Should they, or should they not, include a break clause? Should they offer their property furnished or unfurnished? Should they consider a rent guarantee scheme and if yes, how can you help them?
- Use a tenancy deposit scheme
There’s still some confusion surrounding the right for a landlord to access their tenant’s deposit, despite tenancy deposit schemes having been introduced in England and Wales 10 years ago.
It’s important to stress the importance of these schemes for both landlords and tenants, not least because they’re a legal requirement.
- Ease the property search process
While guiding your clients through the minefield of renting out their property, you should be ascertaining exactly what they need and want in the rental property to which they plan to move. What’s a realistic budget given the rental income they’re likely to secure on their own property? Which features are essential? How long do they intend to live there, and which features really matter given this duration? Do they require school places?
By making yourself indispensable throughout both letting processes, you’ll not only secure two sets of fees, but hopefully a lifelong client who’ll be more than happy to recommend your business to friends and family.