At Keystones Property, we pride ourselves in the fact that we have such an incredibly low rent arrears ratio to how many we have let and managed. I put this down to the care, organisation, values, and training of the staff.
In my opinion, there are a few ways to obtain a good tenant and I do speak about this in another blog, so check it out to get a full understanding on this skill, because it is a skill!
But I wanted to write a blog on the value that you receive when choosing a good letting agency and what goes into the initial rental, then following that, I will write another piece on the management of a rental property too.
So, let’s get into it…
After the initial valuation, pricing the property up and agreeing on fees, we will take photos and floor plan if need be, to instruct the property. On the valuation, we will cover what you need to make yourself compliant with regulations, be it a landlord license or not, your EPC rating and anything else that needs to be addressed.
We advertise the property on all property portals relevant to the marketplace, such as Rightmove, Zoopla and On the Market. Not all agents will market on all 3 to get you maximum exposure.
There are always tenants looking for property in the marketplace, however, to be truthful a tenants lifespan of looking for property usually lasts no longer than one month (think about it logically) it is completely different to purchasing, so any agent who states they have hundreds of tenants on their database, then beware because the chances are he or she is just trying to win business....
• Valuation – 1 hr approx. + travel
• Photos & Floor plan – 1 hr (unless taken on the initial valuation)
• Listing online and brushing photos – 1 hr
Once marketing the property, we will book in the viewings. We receive 100s of calls from tenants on our properties, providing they are priced competitively, this is extremely time consuming, and any landlord that has advertised the property themselves will understand the sheer volume that will come through to us.
We have a pre-qualification process that gets asked every single time, making sure that we ‘write down’ what a tenant tells us over the phone such as; how many people including children moving in, how much they earn, what they do for work, employed or self-employed, when they need to move by and why they are moving from their current residence. This is all written into our database so that once the viewing is booked, we can clarify this with the tenant who wants to take the property.
The importance of this is that every tenant has a story, and their stories need to match up because our values as a company are not to have liars, it starts with this process.
Once the tenants are booked in for an open hour or two on the property, we will then proceed with email confirmations from our software system, texts the day before and confirmation calls on the day.
• Prequalifying and viewings – 4-8 hrs
• Emails, texts, and confirmation calls – 30 mins
On the telephone calls, we are listening to how the tenants conduct themselves, and their story and if they appear to be organised, you can generally tell over the telephone your favourite tenants. These will be highlighted by the staff before the viewing.
On the viewing, it gives us a chance to meet the tenants. What are we looking for?
We are looking for tenants that turn up on time, nice and pleasant people who can conduct themselves in the right manner. We will look at signs such as, if they take their shoes off or offer to, their cleanliness and how they appear to take care of their appearance, a clean and organised person usually means a clean property. How their children are behaving and how much control they have over their children too, the last thing we want is to give the property back to a landlord with drawing on the walls and in a bad state.
This above may sound harsh, but it is why we have not had any rent defaults over the past 2 years since writing this blog, it works!
Once a tenant is chosen, we will request a holding deposit from the tenants and an application form is to be signed with any requirements or requests a tenant may have.
We then obtain 3 months bank statements, 3 months payslips or tax returns, IDs, and Visas from the tenants and/or a guarantor if needed.
This is where we are highly trained, we have training videos and do a lot of work when choosing a tenant.
Firstly, it is the character of the tenant. We ask ourselves several questions to find this out:
• Has the tenant been forthcoming with documents and sent the documents in an organised fashion?
• Have the tenants’ attitude, and demeanour been correct in our eyes, have any negative red flags that could cause difficulty to our landlord should we proceed with them?
• What do their bank statements look like? Are they constantly in the Red? Do they have loans outstanding? Are they paying their bills? Again, any red flags?
Once we are satisfied with the above, we will then proceed to speak with the landlord first over the telephone, then an email offer.
An offer will be sent to the landlord disclosing how many people, the jobs of the tenants and all the relevant information upon moving, then once an acceptance is made from the landlord we will proceed to reference.
Timescale for the above:
1-3 hrs depending on how many tenants want to take a property
Our main motto when it comes to tenant referencing is that we can obtain our landlord with Rent Guarantee Insurance and Legal Protection, even if the landlord does not want it.
In my opinion, this is the most important thing, ‘expect the best, but prepare for the worst!’ is our motto with lettings.
As mentioned before, it is an art and skill, not all agencies have the same process, so this is extremely important when choosing your agent to look after your asset.
The tenants have to qualify for referencing and earn 30x the monthly rent to cover the rent, bills, etc… this is checked via Keystones when the tenants submit their documents to us.
They will then have to submit them again to a referencing company, the reason we take them in house first is that we trust our judgement more than a reference company. Bear in mind that most reference companies are employing human beings that we cannot control at Keystones, so to make sure we have that element of control, we look through documents inhouse first before referencing starts.
Remember, a failed reference means the property is back on the market, the landlord wastes time and therefore money due to an inexperienced agency.
The reference companies will also look at Bank Statements, employer references, and previous landlords’ references and check for Defaults, Bankruptcy, CCJs and general poor credit.
Once, this has been completed, we will then contact our Rent Guarantee Insurance company to make sure that our tenants pass for Rent Guarantee Insurance for the landlord.
Compliance is key and we make sure our landlords are up to date with their certificates. The legal requirements upon writing this blog (2023) are:
• EICR – Electrical Installation Certificate – lasts 5 years (sometimes 2 years so check certificate), sometimes 10 years on a new electrical installation (please check your paperwork)
• Gas Safety Certificate – 1 Year (if it is a new boiler, make sure you check if you need servicing done annually for your warranty to be valid)
• EPC – Energy Performance Certificate – lasts for 10 years and is a legal requirement, needs to be an E Rating or above, soon to be C+ Rating to be valid from 2025.
• Landlord License – Depending on the borough, this is needed. Call us to discuss this or email us. Usually £500-£900 for years from the last allocation of licenses.
We make sure that our landlords are compliant with the above and when it comes to the signing, we make sure the tenants sign for all of the above as received, as well as:
• How to Rent Booklet
• Deposit Protection Forms with Terms and Conditions
• Damp and Mould Booklet
• Assured Shorthold Tenancy
1-4 hours depending on if certificates are already in place
It is a legal requirement for any landlord to register a deposit within 30 days from receipt, supply your tenant with the Deposit companies Terms and Conditions, and Prescribed Information Document to make sure you are covered.
We receipt a 5-week deposit which is the maximum legal amount we can take.
We do not opt in for the No Deposit schemes where tenants pay the agency monthly, although a great business model for us to make money, an insurance scheme to pay a landlord out on damages doesn’t make much logical sense to us, if an insurance company is covering the tenants deposit and paying out for the tenant, they will try to make it as difficult as possible. Insurance companies are in business and don’t really like to pay out if they can help it.
Payment and Agency Fees:
We collect the first month’s rent and deposit, and we receipt our agency fees from the first months rent, and maintenance will be drawn off of this too, you will have a breakdown via an invoice/statement for your tax purposes.
We take our management fees or rent collection fees in line with the rent, e.g. if the tenant pays monthly then we take our fees monthly.
If we are managing the properties, we will handle the utility companies for our landlords, the key cutting process, and any backlash from the inventory and make sure of a swift and hassle-free move in.
With management, you are paying for any maintenance and repairs to be dealt with accordingly, any of the tenants issues whether easy or not are dealt with via Keystones and we will basically take the whole process away from the landlord, the landlord can then focus on their day job whilst we focus on ours.
Monthly or Yearly statements with backed up invoices from tradesmen, some landlords like this monthly and some annually.
Rent Guarantee Insurance:
In my opinion, this is vital. As mentioned above ‘expect the best but prepare for the worst’ in this instance.
As I am currently writing this in January 2023, I can confirm that we have only had to use the Rent Guarantee Insurance 3 times since we opened our doors in 2013 and each time they have paid out. From 2022 to 2023 we managed circa 150 properties for our landlords, and we had a 0% Rent Arrear rate, which is impressive due to all the above and our processes.
Judging by our statistics, we are one of the best letting and managing agents out there, hence why in 2019 we won the best letting agent award in East London from the British Property Awards and year after year won the Romford Award.
However, I still say that it is vital that Rent Guarantee is in place should you have the unfortunate circumstance of a tenant falling into arrears and cannot pay rent.
The Rent Guarantee Insurance will assess the case, pay a landlord out monthly in arrears and also cover the eviction costs of a tenancy, in some circumstances, they will pay for up to 75% of the monthly rent whilst a property is not lettable due to building work for a maximum of 2 months.
Choose your Rent Guarantee Insurance wisely, don’t just go for the cheapest.
We look through the policy wording of our insurance company twice per year, as they do change often, again this is another service we offer behind the scenes to our landlords.
A buy to let property is an asset, something that allows you freedom in life, something that you can use to put your children through private school. Don’t cheap out on your monthly management fee, our monthly management fees are on a par with a 3-course restaurant meal for a family of 3 people. It makes sense not to cheap on this costly mistake.
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