Renting a home when tenant demand is high
- 1 October 2010
- From the section Business
Demand for rental homes is increasing according to the latest research from the Association of Residential Lettings Agents (Arla), with some 70% of member offices saying it now outstrips supply.
Many prospective landlords will therefore be jumping at the opportunity to let out a property for the first time, while finding a suitable home may be a challenge for tenants.
Here is some advice on what both tenants and landlords should do to make the relationship run as smoothly as possible.
In today's market, the biggest piece of advice for anyone considering entering the rental market is to carefully research every aspect of the process, and avoid making rushed decisions.
For prospective landlords this means investigating rent levels in the local area and relevant legislative requirements, and running the appropriate checks on potential tenants.
For those seeking a home to rent, it is a question of understanding your rights and consulting experts, such as reputable, licensed agents, throughout the process.
Let us start with tenants.
Small print is a big deal. Every tenancy agreement is different, so it is important to carefully read yours before signing it - even if you are not a first-time tenant.
Look out for areas that could be crucial further down the track. For example, if you are expecting your employment situation to change ensure there is a break clause built in.
Equally, if you are planning to expand your family, watch out for clauses limiting a tenancy to adults-only.
Next, ensure your finances are sorted.
The recession has left many people in financial difficulties. Sensible landlords and agents will be carefully checking prospective tenants, looking for any signs of unreliability - so if you are in a secure financial position, make it clear.
Equally, make sure you go through a reliable, licensed agent who will carry out the relevant checks on both parties - financial problems are not confined to tenants - before signing an agreement.
To stay or not to stay?
For many already living in a rented property, it will be prudent to stay put until issues with employment financial stability are clearer.
Remember that landlords are usually within their right to increase the rent on a property each year and there may be a charge to renew your tenancy, so factor this into your financial planning.
It is inevitable that some landlords will need to exit the market, or that some tenants will need to move home.
Therefore, if your agreement is a fixed-term contract, check for a break clause. This will usually allow either landlord or tenant to give two months' written notice after a particular date of the tenancy, enabling termination of the contract earlier than its original fixed term.
Managing a property
Next, let us turn to landlords, who should not go it alone.
Many landlords opt to work with a letting agent to help let or manage the property. It is crucial to fully research any agent to guard against unregulated, unethical agents.
A good agent should be able to help a landlord find reliable tenants, conduct the relevant reference and credit checks and ultimately help protect the investment.
Make sure the property presents itself well to the market in terms of the décor, the condition of the furnishings and also the mechanics of the house - such as the heating system.
It may be easy to find a tenant when there is a dearth of properties, but a good quality property is likely to attract better and more loyal tenants, and achieve a competitive rent level.
In addition, do not forget to prepare a detailed inventory of the property, including a schedule of the condition of the contents, walls, ceilings, doors and other fixtures and fittings.
Finally, ensure you have specialist buildings and contents insurance; without a specific reference to letting, you may be uninsured.
Consider taking out insurance to protect against a tenant not paying rent. This is a particularly sound investment in a tough economic climate.
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