If you are a landlord or buy to let investor who manages to keep up to date with the never-ending changes the Scottish government have been introducing over the past few years, then I’m sure you will be aware that the Scottish property market is currently navigating through a series of further legislative changes, such as rent caps, rent increases, the adjusted EPC regulations, among other developments. Not to mention the increases in mortgage rates, which have more or less doubled in the last few months.
It may be difficult to feel any kind of optimism during these times!
In the ever-changing landscape of the property market, in my experience as both a landlord and agent, adopting a long-term perspective is always key. Peaks and troughs are inevitable, and of course it’s crucial for landlords to assess their investment goals. During times like these, it should allow you the opportunity to re-evaluate your property portfolio; consider whether to stay in the market for the long run or explore alternative investment opportunities.
Landlords should be considering what’s more viable right now; self managing their properties, employing the services of a professional agent , or in some cases, selling their buy to let investments.
Great for those landlords who maybe work part-time or are retired. A bit more challenging for those who work full-time as they may struggle to find time to deal with advertising, viewings, tenant-vetting, applications, moves-ins then the overall management of the property such as dealing with maintenance; then there’s the keeping on top of the ever-changing and challenging legislation.
If you are considering self-management, it may be worthwhile thinking about becoming accredited with Landlord Accreditation Scotland (LAS) who provide support to manage your tenancies.
One of the key things to think about here is; How valuable your time is to you.
Letting agent services
For those landlords thinking about using a letting agent, make sure you use a good reputable agent that will be open and honest about what they can do for you. Consider what you need and want from your letting agent; ensuring they work well with your investment goals. Make sure you chose an agent that is a fully qualified letting agent and is on the Register of Letting Agents. This means that they have gone through training, keep on top of their CPD and are registered with membership bodies that means they follow a strict code of practice.
A well-chosen agent can help maximise your returns and ease the burden of day-to-day management.
Our thoughts and advice
While the rental market is currently buoyant, it’s important for landlords to resist the temptation to hastily increase rents. Taking a thoughtful approach and considering the long-term goal is key. Great properties can command excellent rents, but it’s equally crucial to attract tenants who are looking for a property where they can settle and call home, meaning you can sustain a long-term tenancy.
Lower income tenants often come with misconception. Many lower-income tenants prove to be great tenants, paying rent on time, caring for the property, and establishing long-term residency. Furthermore, there are potential benefits for landlords, such as grants for insulation and heating upgrades, especially relevant given the upcoming EPC regulations.
Of course, it is more important than ever to make sure you are vetting your tenants properly. Whether you use a credit reference agency, or your management agent does this for you, it’s important that tenants are correctly vetted. In my experience, just because a tenant has a low credit score does not mean that they are unsuitable. A good credit reference report should give you enough information to allow you to decide on the most suitable applicant. The main points to focus on when processing prospective tenant applications are; financial affordability, how often they’ve moved around and their reasons behind this, and employment references or guarantors. Bear in mind, if your applicant has a guarantor listed on their application, the guarantor should go through a similar vetting process.
If your goal is to optimise rental income, it’s worth pondering the condition of the property you’re putting on the market. If you anticipate an increased monthly rent, moving from, let’s say, £650 to £850, it’s essential to consider what you’re providing to the tenant in terms of the property’s condition, decor, and style.
In this current market, tenants are willing to pay more for a property that’s in great condition. So, make sure the property you are offering to the market is best placed to attract great tenants who will hopefully stay long term.
Selling your property
If you have a tenant in situ in a property that you want to sell, then it may be worthwhile speaking to some letting agents who may have suitable buy to let investors on their books.
It’s obviously a challenge trying to evict tenants right now but if you are looking to sell, then it may be worth considering selling at a lower price to an investor, then the tenant can stay. Hopefully less hassle for all.
We also work with a couple of investors who would consider off market deals at the right price. Just call or email me direct to discuss these opportunities.
We also offer home sales services, so if you are looking to sell your property, don’t hesitate to contact us for advice, or a property valuation. I’d be delighted to hear from you.
So going back to the question, can we find some optimism? I suppose it all depends on how you look at your investment.
Finally, if you have any property related questions at all, simply give us a call or drop me an email at firstname.lastname@example.org
Have a great week!
Nykky, Director @ brikk haus
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