Good Landlording Suzanne Smith and Richard Jackson

In this episode of Good Landlording, Richard Jackson and Suzanne Smith share lots of practical tips to help landlords manage their buy to lets successfully themselves, without using letting agents.







Richard and Suzanne are both very well qualified to talk about this subject. Suzanne has always self-managed her properties, even with her first as an accidental landlord, and Richard self manages many of his properties.







They discuss what self-managing involves, whether landlords need training or accreditation, what the benefits of self-managing are and lots of practical tips for landlords.







What we cover in this episodeOverview of self-managing rental propertiesWhat does self-management involve for landlords?Do landlords need accreditation to manage their own rental properties?What are the benefits for landlords who self-manage rental properties?Tips for self-managingGolden nuggetCredits























Overview of self-managing rental properties







There's a lot of scaremongering on the part of letting agents, to try and put landlords off managing their properties themselves. They make out that it's really complicated, and something best left to agents.







For some landlords, using a letting agent might be the right approach. They might not have the time or inclination to do it themselves. For guidance on how to choose good letting agents, you can listen to the Good Landlording episode GL #3: Guide to selecting good letting agents .







However, if you're considering self managing your properties, it's really not as difficult as you might think. There are lots of useful tools that landlords can use to automate much of the day-to-day tasks, or you can do it manually, using spreadsheets and calendar reminders.







Also, self managing doesn't always mean you have to do it yourself. Many landlords with larger portfolios use property VAs (virtual assistants). VAs aren't AI, but are specialist admin assistants who provide remote support to landlords. Some landlords employ family members to help, which can be a good way to bring the next generation into the business.







It's possible for landlords to start by using letting agents to find tenants on a "let only" basis and set up the tenancy, and hand over management as soon as the tenants move in. This is what Suzanne did when she first started as an accidental landlord. She didn't start finding tenants herself for three years.







Self-management is the opposite of the "passive income" mindset, that some landlords strive for. It's also something that landlords need to go into with their eyes open, and make sure they understand all their legal and practical obligations.







>> Blog post: The Independent Landlord - How to Self-Manage your Buy to Let







What does self-management involve for landlords?







Self-management means different things to different landlords. However, these are the three key aspects of managing your own property portfolio yourself:









Property management. Looking after the property, which means doing or arranging repairs, maintenance, general upkeep and inspections. This includes arranging the annual gas safety certificate, boiler service, the 5-yearly EICR, PAT testing and managing suppliers, esp the trades.







Financial. Keeping tabs on the various costs that the landlord incurs, and the income due, ie rent. (See Good Landlording episode GL#7: How to manage rent arrears for tips on what to do to minimise the risk of rent arrears.







Tenant management. Looking after tenants after they move in, good communications,

This week's episode of Good Landlording discusses one of the first questions that landlords ask themselves when they're looking for a buy to let: should they buy a flat or a house?







Richard and Suzanne go through the pros and cons of both flats and houses, drawing on their own experiences as landlords, with Suzanne only now investing in houses, and Richard having only ever bought flats as rental investments. 







Suzanne explains the difference between "leasehold" and "freehold", service charge, ground rent, and practicalities, before going through what the new Leasehold and Freehold Reform Act 2024 promises to bring now it is on the statute book.







What we cover in this episodeWhat's the difference between leasehold and freehold?Ground rent and when it becomes a problemWhat does it mean when a flat owner has a share of the freehold?Service charge - top tips for leaseholdersThe advantages of flats as investments for landlordsThe downsides of flats as investments for landlords?The advantages of freehold houses as investments for landlordsWhat makes a good house for landlords?What makes a good flat for landlords to let?Golden nuggetCredits































What's the difference between leasehold and freehold?







For leasehold properties such as flats and some houses, the building itself  and/or the land it sits on are owned by someone else called the "freeholder". The freeholder may be the original developer,  or, they might have sold it onto another company.







Each leaseholder enters into a lease with the freeholder to own the flat or leasehold house for a fixed period of time.  And so this is currently typically 99 years or 125 years for residential properties.  The length of the lease decreases each year until it eventually runs out, unless the parties agree to extend the lease.  A lease is therfore an asset that will that goes down in value the closer it gets to the end of the term. 







When someone buys a flat, the leaseholder transfers the lease agreement to the new owner. This is called "assignment", and the freeholder is likely to need to give consent to the assignment.  And during the the lease agreement, the term of the lease, the leaseholder pays ground rent  and a service charge to pay for repairs and maintenance. 







A leaseholder is a long-term tenant, and a freeholder is a type of landlord. However, to avoid confusion, it is good practice to use the word "leaseholder" to refer to somebody who holds a long term lease, and keep the word "tenant" for someone who has a a tenancy agreement with a landlord.







When someone buys a lease, they pay a "premium" for the lease, which is an upfront payment for the right to occupy the property for the term of the lease.







Ground rent and when it becomes a problem







Leaseholders also pay ground rent, which may be a "peppercorn" (a nominal amount which the freeholder does not collect), or a more substantial sum. Over the last few decades, some developers and freeholders have seen ground rent as a profit centre, and have included onerous ground rent clauses into their leases, which increase over time. Sometimes ground rent doubles every 10, 15, 20 or 25 years.







Onerous ground rent provisions are a big problem as many mortgage companies refuse to lend money on properties which have them. Ground rent above a peppercorn was abolished for new leases a few years ago, and it was supposed to be restricted in the Leasehold and Freehold Reform Act, but it got dropped at the last moment, when the election was called. 







>> Blog post: The Independent Landlord - The latest news on the reform of groun...

With the fall of the Renters Reform Bill, and the upcoming general election, Richard Jackson and Suzanne Smith pick the brain of leading solicitor David Smith from JMW to explore what the election is likely to mean for landlords.







In this episode we discuss what happens to the Renters Reform Bill now, and analyse what a new Labour or Conservative government might bring for landlords. We step away from the hyperbole and catastrophising, and take an objective look at what we currently know about the policies of both Labour and the Conservatives.







As always, we bring the practical perspective of landlords, and share tips on what we're doing to filter out all the noise that an election brings.







We recorded this episode on 24 May 2024, shortly before parliament was prorogued ahead of the General Election on 4 July, before any of the parties have published their election manifesto.







With this episode, we reached a big milestone: episode number 10! We've released 8 regular episodes and 2 on the Renters Reform Bill since we launched Good Landlording on 10 April, less than 7 weeks ago. We've also had well over 10,000 downloads, before this episode goes live! That's a fantastic achievement for a new show, run by podcast newbies.







What we cover in this episodeWhat happened to the Renters Reform Bill?What we know about Labour's policies for the Private Rented SectorWhat if the Conservatives win the election?Advice for landlords in this period of uncertainty before the General ElectionCredits































>> Submit a question: Click here for question form







What happened to the Renters Reform Bill?







The government abandoned the Renters Reform Bill in the brief wash-up period on 24 May when a few bills managed to be rushed through the House of Lords, like the Leasehold and Freehold Reform Bill.







As the Renters Reform Bill fell, any new government would need to draft a new bill from scratch, with a new long title, if they want to pursue rental reform after the election.







Of course, some of it would no doubt look the same, but a new Bill would have to start all over again to go through all of its stages  in the Commons and Lords, which would take several months. 







>> Blog post: The Independent Landlord - Renters Reform Bill: What happens now?







What we know about Labour's policies for the Private Rented Sector







Labour has not yet published their manifesto. However, David Smith predicts the following might feature in Labour's policies for landlords should they win the general election and form a government"









Abolition of Section 21 and fixed term tenancies, but with a few additional grounds for landlords to terminate a tenancy, for instance if they want to sell, or it's a tenancy for agricultural workers.







Regulation of letting agents and other property agents.







Some sort of rent stabilisation measures, as opposed to rent control. He does not see this as a bad thing for landlords as they would move to yearly increases in line with inflation, instead of just increasing rents when tenants change.







Increased devolution of housing powers to local authorities.







More regulation around management standards and quality, along the lines of Rent Smart Wales, which would bring more consistency than the piecemeal the current selective licensing approach.







Landlord register.







Better enforcement by local authorities.

In this week's episode of Good Landlording, we discuss one of the most difficult aspects of our jobs as landlords, and that's handling rent arrears. Rent arrears are challenging, even if landlords use an agent.







The essence of the agreement between a landlord and a tenant is that the landlord provides a well maintained and legally compliant property to live in. In return, the tenant pays rent. If tenants don't pay the rent when it's due, they are in what's called rent arrears.







Private landlords run a business and need to be paid the same as any other business that doesn't receive government funding. Being a good landlord doesn't mean you're a charity and you need to provide the property free of charge. If we don't get paid, we can't pay our bills, and may end up going out of business. However, there's a lot landlords can do to help tenants who start to fall into rent arrears.







Managing rent arrears is something that all landlords need to understand, so we can minimise the risk of rent arrears, and know what to do if our tenants fall behind with their rent.







Richard Jackson and Suzanne Smith share practical tips to help landlords avoid rent arrears, what landlords should do if tenants do fall behind with their rent, and how to help tenants. We also go through options are for evicting tenants in rent arrears both now and if the Renters Reform Bill had come into force. Eviction should be the last resort for landlords, if everything else has failed.







What we cover in this episode at a glancePractical tips for landlords to minimise the risk of rent arrearsWhat should landlords do if tenants are in rent arrears?Practical tips to help tenantsWhat is Breathing Space?Late payment processThe last resort: Evicting tenants because of rent arrearsUsing Section 21 Housing Act 1988Using Section 8 Housing Act 1988The new Mandatory Ground 8A in the Renters Reform BillGolden nuggetCredits







>> Submit a question: Click here for question form























Practical tips for landlords to minimise the risk of rent arrears







Prevention is better than cure, and landlords should try to avoid tenants falling into arrears in the first place. Here are 7 practical tips to minimise the risk of rent arrears:









Tenant selection. Choose tenants that can comfortably afford the rent. For more information, see Episode 1: What makes a good tenant?







Choose the rent payment date carefully. When entering into a new tenancy agreement, ask the tenants when they would like to pay the rent. The best date is shortly after they are paid. You can pro-rate the first payment so that if they move in on the 15th of the month, but want to pay on the 25th of the month, they pay the extra amount in their first rent payment. After that, they'll go onto the new rent payment date. OpenRent have a facility to calculate and set this up automatically for you as part of their RentNow package.







Standing order. Ask tenants to set up a standing order so they don't forget to pay the rent. You can tell if they have done this as the rent payment will come in overnight, rather than in the daytime.







Track rent payments. It's important to keep track of whether tenants have paid the rent. You can check your own bank account on the payment days, or automate it with (say) Alphaletz. The Alphaletz platform can send the tenant a reminder that the rent is due, and send a chaser if the tenant doesn't pay the rent on the due date.







Rent guarantee insurance. Richard recommends taking out rent guarantee insurance for the first year with new tenants. If they are good payers and are never late paying,

This week's episode is about a key issue for landlords: setting and increasing rent.







Suzanne Smith and Richard Jackson kick off the podcast episode by discussing what the key rent indices say about what’s happening to rents now. Then they share tips about landlords should go about both setting rent at the beginning of the tenancy, as well increasing rent once the tenants have moved in. They also talk about how the Renters Reform Bill will change the way landlords will be able to increase rent.







The episode is full of practical tips to help good landlords go about setting and increasing rent in a way that complies with the law and is fair to your tenants, but also recognises we’re running a business.







What we cover in this episode at a glanceWhat’s happening to rents at the moment?The Good Landlording approach to setting and increasing rentHow can landlords increase rent?1. New AST for another fixed term2. By agreement2. Using a rent review clause3. Section 13 notice (Form 4)How will the Renters Reform Bill change the way landlords increase rent?Golden nuggetsCredits















>> Submit a question: Click here for question form







>> Join: The Independent Landlord Community private Facebook Group (landlords only)















What’s happening to rents at the moment?







The 3 major rent indices (ONS, Rightmove and Spareroom) all agree that the rental growth for the 12 months until the end of March was around 9% in England.







According to Rightmove, the average number of enquiries has reduced from 13 to 19 a year ago, which compares favourable to the mere 5 enquiries in 2019. Rightmove point to affordability as the problem - there's only so many rent increases that tenants can accommodate.







Rightmove also report that more landlords are having to reduce rents when advertising. 22% of advertisements are ending in a price reduction at the moment, which is a five-year high for this time of year, and is up from 16% a year ago. Price reductions, on the other hand, are now around the more normal percentage of the 23% in 2019.







Spareroom data shows a number of postcodes in London where room rents are dropping: SW3 (Chelsea) saw the biggest drop of -11%, followed by 7% in E20 (around the Olympic Park).







The Good Landlording approach to setting and increasing rent







Private landlords run a business, and not a charity or subsidised social housing. That said, we want to charge a rent that’s fair to the tenants, and fair to the landlords. 







Costs have increased significantly for landlords over the past few years, and keeping rent at the same level is the same as reducing it in real terms, after taking inflation into account.







Suzanne charges new tenants the market rent for the property. For in-tenancy increases with existing tenants, she keeps wage inflation as a guide, and tracks the market rent, but at a discount. She has kept rent increases to under 5%, but has always increased rent every year, apart from during Covid.







It's important to avoid rent shock for tenants, when the rent suddenly increases in one go. It's better to increase it little and often.







>> Blog post: The Independent Landlord: How to increase rent in 2024







How can landlords increase rent?







1. New AST for another fixed term







Agents usually change the rent by issuing another tenancy agreement for another fixed term period, with new rent stated in the agreement. It's simple to do and means you can keep the AST up to date.







2.

In this week's episode, Richard Jackson and Suzanne Smith discuss what landlords can do when things go wrong with letting agents, and how to make a complaint. It's the third in a series of three episodes on what landlords need to know about letting agents.







While the vast majority of interactions with letting agents are positive, it’s important for landlords to know what options they have when things go wrong. Richard and Suzanne discuss how to make complaints to the letting agents and the redress schemes, and the additional protection that choosing Propertymark members provides landlords. The podcast episode also touches on complaints to Trading Standards and taking legal action in the small claims court.







This episode follows GL#3: Guide to selecting good letting agents and GL#4: Tips for signing up with letting agents.







What we talk about in Episode 5 on problems with letting agentsWhat are the most common complaints about letting agents?Keeping good recordsDifferent ways to make complaints about letting agentsInformal complaint to letting agentsFormal complaint to letting agentsRefer complaint to redress schemePropertymark members - extra recourseComplaint to Trading StandardsLegal actionGolden nuggetsCredits















>> Submit a question: Click here for question form







What are the most common complaints about letting agents?







According to the Property Redress Scheme 2023 Annual Report, the top three categories of complaints about letting agents are holding deposits (presumably by tenants), poor service and management, and tenancy payments and rent collection.







Here are other common causes for complaint by landlords:









Poor communication and failure to provide information







Inspections: failing to carry them out or not preparing a report after they do an inspection







Signing up poor quality tenants







Not arranging gas safety certificates in time when it’s not due to the tenant failing to give access.







Repairs: not carrying out repairs promptly or properly, or overcharging







Rent arrears: not chasing late payments properly and not keeping the landlord informed about rent arrears







Failing to forward rent onto the landlord









Keeping good records







It’s important for landlords to keep good records of conversations with letting agents so it’s clear what has been agreed and what feedback has been given. Richard keeps his notes in the Alphaletz property management software so there is a record in the event of a dispute.







Contemporaneous notes that are made at the time can provide excellent evidence if a complaint escalates into legal action, where “recollections may differ”.







Different ways to make complaints about letting agents







Landlords have three different routes to making complaints. The first is to make a complaint to the agent, which is then escalated to the redress scheme if the landlord isn’t happy with the outcome of the complaint. The second is to complaint to Trading Standards. The third is legal action. It is possible to combine one or more of these routes.







>> Blog post: The Independent Landlord guide to resolving problems with letting agents







Informal complaint to letting agents







The first step is to make an informal complaint to the branch by speaking to the branch manager, and making clear where their service falls short and what action you expect. They might not know you’re unhappy and it might be a simple thing that ca...