Your Buy to Let Questions Answered
Parmdeep Vadesha
October 01, 2008
Many property investors have found success and profit in buying properties and renting them to others over the centuries. If you are a novice investor who is just about to get his foot up the property ladder, a buy to let investment might just be your best bet. However, do not expect a buy to let investment to be easy. With rental incomes, mortgage payments and tenant issues to consider, a buy to let investment can easily turn into a headache if you are not careful. Know what you are getting into before you get your feet wet and purchase your own rental property for investment. We have anticipated some of the questions that most novice property investors may have – and we´ve got the answers for you:
How do I control my tenant´s visitors and guests? Who is allowed to live in the property?
A tenancy agreement should name the individuals who have the right to reside and peacefully enjoy the property. All the others not so named are considered excluded. However, this does not mean that no other person is allowed to stay in the property. Tenants should be allowed a reasonable number of visitors and guests. However, should the tenant have more people staying at the property for a lengthy period of time, or should he take on additional paying lodgers, then the landlord has now a good ground to terminate the tenancy agreement. Having more people than what was originally agreed upon greatly contributes to dilapidation and deterioration of your property far more than the fair amount of wear and tear. You will also have issues getting these other people out should you come to eviction.
Should you request references from your tenant?
Requiring your potential tenant to submit references is often a good idea. This gives you an insight into the character of your tenant, and whether he is likely to give you trouble during the duration of the tenancy agreement. You can easily ask for a character reference from your tenant´s previous landlord. To inquire into his capacity to pay, you can ask your tenant to submit a copy of his bank statements. You can also ask for a reference from your client´s employer to confirm salary details, length of service, character background, and whether the employer believes that his employee has the capacity to cope up with the monthly rental payments.
What is a tenant´s option to renew and option to extend?
An option to renew or option to extend can be to the benefit for both parties, the tenant and the landlord. Most tenants who have relocated to the United Kingdom from overseas would prefer long term contracts (usually in the spans of two to three years), with the option to renew or extend the tenancy agreement upon expiration date. Most large companies who are relocating senior employees and housing them in your property would also require this option as a precondition to the lease. Normally, tenants are expected to give their landlords a notice of at least 60 days of their desire to renew or extend the contract.
How do I control my tenant´s visitors and guests? Who is allowed to live in the property?
A tenancy agreement should name the individuals who have the right to reside and peacefully enjoy the property. All the others not so named are considered excluded. However, this does not mean that no other person is allowed to stay in the property. Tenants should be allowed a reasonable number of visitors and guests. However, should the tenant have more people staying at the property for a lengthy period of time, or should he take on additional paying lodgers, then the landlord has now a good ground to terminate the tenancy agreement. Having more people than what was originally agreed upon greatly contributes to dilapidation and deterioration of your property far more than the fair amount of wear and tear. You will also have issues getting these other people out should you come to eviction.
Should you request references from your tenant?
Requiring your potential tenant to submit references is often a good idea. This gives you an insight into the character of your tenant, and whether he is likely to give you trouble during the duration of the tenancy agreement. You can easily ask for a character reference from your tenant´s previous landlord. To inquire into his capacity to pay, you can ask your tenant to submit a copy of his bank statements. You can also ask for a reference from your client´s employer to confirm salary details, length of service, character background, and whether the employer believes that his employee has the capacity to cope up with the monthly rental payments.
What is a tenant´s option to renew and option to extend?
An option to renew or option to extend can be to the benefit for both parties, the tenant and the landlord. Most tenants who have relocated to the United Kingdom from overseas would prefer long term contracts (usually in the spans of two to three years), with the option to renew or extend the tenancy agreement upon expiration date. Most large companies who are relocating senior employees and housing them in your property would also require this option as a precondition to the lease. Normally, tenants are expected to give their landlords a notice of at least 60 days of their desire to renew or extend the contract.