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Guides, Landlords
Understanding Rent Arrears – How to Protect Your Income as a Landlord
Understanding Rent Arrears – How to Protect Your Income as a Landlord Rent arrears can be one of the most challenging aspects of property letting, often creating financial strain for landlords and emotional stress for both parties. As a landlord, it’s crucial to have a clear strategy for rent arrears advice, ensuring you safeguard your income while maintaining a positive relationship with your tenants. In this guide, we’ll explore effective ways to handle unpaid rent, outline how to protect your revenue, and provide insights on offering tenant support during tough financial times. What Are Rent Arrears? Rent arrears occur when a tenant fails to pay rent on the scheduled date, resulting in a debt owed to the landlord. This shortfall can accumulate quickly if not addressed, leading to larger financial implications for landlords. Being proactive in preventing and managing rent arrears is an essential part of landlord income protection. Why Early Action Matters Cash Flow Management – Missed or late rent payments can disrupt your regular income stream, making it harder to cover mortgage payments or maintenance costs. Tenant-Landlord Relationship – Promptly addressing arrears can help preserve goodwill, preventing further escalation or a breakdown in communication. Legal Implications – Rent arrears that linger may necessitate legal action, which can be both time-consuming and costly. Common Causes of Rent Arrears Understanding why tenants fall behind on payments can help landlords devise fair and effective solutions. Unexpected Financial Hardship Job loss, sudden illness, or family emergencies can lead to a tenant struggling to meet their financial obligations. Poor Budgeting or Money Management Some tenants may simply lack the knowledge or discipline to manage monthly expenses, resulting in recurring late payments. Household Changes A change in household dynamics—like a new baby or an additional family member—can increase living costs and reduce disposable income. Rent Increases If rent is raised beyond a tenant’s capacity to pay, they may start accumulating arrears. Communication and Tenant Support While recovering owed rent is your priority, offering tenant support can go a long way in finding a mutually beneficial resolution. Open Dialogue As soon as rent is overdue, initiate a respectful yet firm conversation with your tenant. Ask about the reasons behind the missed payment and explore possible repayment solutions. Flexible Payment Plans In some cases, creating a structured repayment plan can help the tenant catch up over time, reducing the likelihood of eviction. Signposting to Financial Advice If your tenant is experiencing ongoing financial difficulties, direct them to free debt counselling services or budgeting tools. This balanced approach not only helps your tenant but also strengthens the landlord-tenant relationship, which can be beneficial if you wish to continue letting the property to them long-term. Strategies for Landlord Income Protection As a landlord, you need to safeguard your income while being empathetic to genuine financial hardship. Here are key measures to consider: Clear, Comprehensive Tenancy Agreements Ensure your tenancy agreements explicitly state the rent amount, due date, and any late payment penalties. This clarity can be invaluable if legal action becomes necessary. Regular Rent Reviews Conduct periodic reviews of the rental amount. If you decide to increase rent, do so reasonably and communicate the changes well in advance. Sudden, steep hikes can strain your tenant’s finances and risk arrears. Proactive Referencing and Insurance Tenant Referencing – Screen potential tenants by checking their employment status, credit history, and references from previous landlords. Rent Guarantee Insurance – Consider insurance that covers unpaid rent for a defined period, offering peace of mind and financial stability. Maintaining a Repair and Maintenance Schedule Well-maintained properties tend to attract responsible tenants who value their living space. By promptly addressing repairs, you can foster tenant satisfaction and reduce the likelihood of disputes over rent. When Legal Action Becomes Necessary Despite your best efforts at tenant support and negotiation, rent arrears can still escalate. If the tenant fails to comply with a repayment plan or refuses to communicate, you may need to consider legal proceedings. In Scotland, landlords may have different legal routes, such as serving a Notice to Leave under the Private Housing (Tenancies) (Scotland) Act 2016, depending on the type of tenancy agreement. Court Proceedings, if all else fails, you might need to pursue court action to recover the arrears and regain possession of your property. Before embarking on any legal route, it’s wise to seek professional rent arrears advice from property lawyers or letting agents like Cairn, who can guide you through the complexities of tenant eviction and debt recovery. Frequently Asked Questions How quickly should I contact a tenant about unpaid rent? You should aim to reach out as soon as the rent becomes overdue. Early communication can prevent misunderstandings and stop small arrears from growing into a more substantial debt. Can I evict a tenant immediately for rent arrears? Eviction rules vary depending on your location. Generally, you must follow a legal process, which often involves serving formal notices and possibly attending court. Immediate eviction without notice is typically illegal. Will Rent Guarantee Insurance cover all arrears? Rent Guarantee Insurance policies differ. Some may cover the full arrears up to a certain limit, while others cover only part of the debt. Always check the terms and conditions to ensure you have adequate coverage. What if the tenant refuses to engage in repayment discussions? If a tenant refuses to communicate or make any repayment arrangements, you may need to proceed with formal legal action. Seek expert advice from a letting agent or legal professional to ensure compliance with relevant regulations. Balancing Empathy With Business Sense Dealing with rent arrears is an inevitable aspect of being a landlord, but it doesn’t have to be overwhelming. By staying alert, maintaining open communication, and implementing robust landlord income protection measures, you can minimise financial losses and preserve a positive tenant relationship. At Cairn, we understand the importance of balancing empathy with business sense. With the right approach, rent arrears can be managed effectively, ensuring that you protect your income while offering the necessary support to your tenants. For personalised guidance on rent arrears and protecting your landlord income, get in touch with Cairn today!
Guides, Glasgow, Landlords, Legislation, Letting, Tenants
LATEST UPDATE ON THE REPAIRING STANDARD JAN 2023
Latest update to the Repairing standard – Lead Pipes Private rented properties as we all know are heavily regulated and in addition to all other requirements expected to be adhered to, all private landlords must ensure that their properties are served by a water supply system that is in a reasonable state of repair and […]
Guides, Edinburgh, Portobello, Properties
Focus on Portobello (Property & History)
Focus on Portobello (Property & History) Located a mere 3 miles east of Edinburgh city centre, Portobello is a beautiful coastal suburb standing opposite the breathtaking Firth of Forth. Once a popular Scottish seaside resort, it now offers a generous mix of property types and amenities, perfect for families and professionals alike. In this short post, we take a look at Portobello’s history, property, and reasons why you might want to call this particular part of Scotland home. A (Very) Brief History of Portobello Originally known as Figgate Muir, the area now known as Portobello was used as pasture for cattle by the monks of Holyrood Abbey. By the 18th century, it was a haunt for sailors and smugglers. And in 1742, a cottage was built on what is now the High Street by George Hamilton, a seaman who’d served under Admiral Edward Vernon. Hamilton was part of a crew who’d captured Porto Bello (“beautiful port”) in Panama in 1739, and so he named his cottage “Portobello Hut” in honour of the victory. From that point on, Portobello continued to grow and thrive, becoming an industrial town where bricks, glass, paper, soap, pottery, and even mustard were manufactured. In 1833, the town was officially made a burgh, and by 1896, it was incorporated into Edinburgh. Between 1846 and 1964, a railway station provided easy access to the resort town for visitors from all over the country. They would flock to the town for the sandy beach, promenade, amusements, and open-air heated swimming pool, where a certain Mr Sean Connery once worked as a lifeguard. In later years, the arcade amusements and funfair attractions gradually disappeared. However, what remains is a small, sought-after residential area with history and fresh sea air at every turn. And as recently as 2021, it was considered one of the top eight places to live in Scotland by a Sunday Times panel. What About Portobello Property? Similar to many parts of the capital itself, Portobello properties for sale often include gorgeous (and spacious) Georgian and Victorian flats and large terraced houses. But it’s not a town trapped in time. Modern developments have started to pepper the landscape, allowing first-time buyers the chance to get on the property ladder in this picturesque part of the country. Why Choose to Live by the Seaside? Besides the east coast beach and promenade (filled with cafes, restaurants, and bars), you’ll find everything you need in and around Portobello High Street. From independent shops to a butcher, fishmonger, coffee shops, and a bakery, you’ll certainly be well fed! Meanwhile, for those “bigger shops,” you’ve got your choice of Lidl, Morrisons, and a Sainsbury’s Local, while a 24-hour Asda is just a short car journey away. And for entertainment, the nearby Fort Kinnaird shopping centre offers high street brands, restaurants, a gym, and a cinema. If you’re considering Portobello to raise a family, schooling is available for all levels, from nursery to secondary school. And higher education is only a stone’s throw away. Queen Margaret University, the University of Edinburgh, and Edinburgh college are all located in and around the city. Finally, for commuters, the A1 and motorway are both easily accessible. Plus, regular buses run into Edinburgh city centre (and further afield) throughout the day and evening. Ready to Start Your Portobello Property Hunt? Use Cairn We’ve long had a presence in Edinburgh, and we’ve recently opened a brand new Portobello office to better serve those wishing to move to, rent from (or sell from) this stunning seaside town. Interested in buying in Portobello? Or do you need a local estate agent to help you sell or rent your Portobello property? No matter if you’re a house-hunter or seller, Cairn can help. Contact us today to learn more.
Guides, Edinburgh, Selling
Edinburgh Estate Agents: Your Brief Guide to Selling Your Home in Scotland’s Capital
Edinburgh Estate Agents: Your Brief Guide to Selling Your Home in Scotland’s Capital Selling your home in the capital? Finding the right Edinburgh estate agents is step one, but there are other costs and considerations, too. This short post will share everything you need to know about putting your Edinburgh home on the market. First, Hire Your Edinburgh Estate Agents Choosing the right Edinburgh estate agent can make all the difference to how quickly (and for how much) you can sell your property. Ideally, you’ll want someone with local knowledge, experience, and a track record of success in your area. Someone like Cairn. Here’s how we can help you sell your property in Edinburgh: It all starts with the valuation: We give you an honest, realistic valuation based on assessing relevant market data and industry experience. Next comes the legal stuff: We’ll recommend you a choice of industry professionals (with favourable rates) to help with your home report and conveyancing. We can also advise you on how to tackle any of the works suggested by the home report. Putting eyeballs on your home: We take a proactive and in-depth approach to marketing your property. This includes: Placing a “FOR SALE” board on or as near to your property as possible Designing hard copy and PDF brochures with professional quality photography and descriptions to highlight the key and best features of your property Generating an accurate floor plan Creating digital marketing Posting property details on all key online residential property portals, including Rightmove & Zoopla Presenting your property on our own website with a downloadable PDF brochure Featuring your property on social media Circulating our property listing to Cairn’s active purchaser database weekly Displaying a window card in our office Preparing for and conducting viewings: Before showing your property to prospective buyers, we can provide home staging advice linked to target markets and budgets. We then host open or accompanied viewings, follow up on queries, and regularly report on progress. Negotiation and sale: Finally, we liaise with purchasers on your behalf in an open negotiation to get you the best possible price for your home. Interested in getting started? Arrange a valuation here. Other Important Considerations + Costs When Selling Beyond the services we provide above, there are a few more costs and considerations when selling your Edinburgh home. These include: The home report: This is a compulsory part of putting your home on the market in Scotland. The home report provides all the essential information a potential buyer will need to make an informed decision about making an offer. We can help you arrange this, or you can find a provider yourself. The price will vary depending on the size of your home but usually costs somewhere in the region of £250 to £750. Conveyancing fees: Once you’ve accepted an offer on your home, “conveyancing” can begin. This is the legal term for the transfer of ownership from you to the buyer. If you’re working with a separate conveyancer or conveyancing solicitor, you should expect fees to cost around £1,500. Removal costs: An often overlooked cost, removal (and storage) is vital, especially when you’re working to a tight deadline, or there’s a gap between moving out of your old home and into your new one. Costs will vary depending on your needs. You may wish to hire a van and do it yourself, or you might need a professional removals company to help you pack and transport everything. Expect to spend anywhere from £400 to £1,200, and sometimes more. Cairn: Your Edinburgh Estate Agents As one of Edinburgh’s leading local estate agents, we can help you sell your home without any fuss or drama. Get in touch to learn more.
Guides, HMO Properties, Landlords
Getting to Grips with HMO Licencing
Getting to Grips with HMO Licencing Are you a landlord looking to understand HMO licencing better? Here’s everything you need to know. If you’re thinking about renting your property to 3 or more tenants who aren’t related to one another, then you’re going to need an HMO licence. But what is it? Why does it matter? And what are your responsibilities? Let’s dig a little deeper. So, What is an HMO? HMO stands for House in Multiple Occupation. According to GOV.UK, an HMO is any residential property rented by at least 3 people who aren’t from the same household (for example, a family) but who share facilities such as a toilet, bathroom, and kitchen. It’s also known as a “house share”. Letting your property as an HMO is subject to strict conditions. These include: The property can’t be occupied as an HMO without a licence. Even if you have an application pending and it’s likely to be accepted, letting as an HMO without the correct paperwork will land you in hot water. The maximum penalty for doing so in Scotland is a fine of £50,000 upon conviction. The licence is issued by the local council in which the property is situated. The licence is typically valid for 5 years, but this can vary from one council to another. It may be issued for a shorter period if there are concerns over how the HMO property will impact neighbours. The council has the right to assess your property for potential risks. If you fail to comply with safety regulations, you could face criminal prosecution. It’s therefore vital that you ensure your property is safe and compliant before renting it as an HMO. The number of tenants. By law, you can only rent your property to as many people as stated on your licence. This is checked before your licence is issued. Assessors will inspect your property to see how many people can comfortably live there. If you exceed the number of tenants on your licence, you could face a hefty fine. HMO Licencing: Landlord Responsibilities As a landlord of an HMO, the buck stops with you when it comes to managing and maintaining the property and keeping your tenants safe. To stay on the right side of the law, you must: Be a registered landlord Keep important certificates up-to-date Undertake quarterly inspections and fire training Fit smoke alarms on every level Keep fire escapes clear from obstruction Ensure upkeep of communal areas Make sure waste disposal facilities are in place What Are the Benefits of an HMO? While the rules and responsibilities of renting out an HMO can be overwhelming, the benefits more than make up for it. HMOs can produce far higher rental yields than your typical buy-to-let property, and the demand for shared housing is fairly constant, no matter the economic backdrop. Plus, you can always pass those responsibilities onto a property management company (like Cairn) if you’d rather take a back seat. Interested in letting an HMO property? Here at Cairn, we offer a variety of HMO Development and HMO Property Management services. Get in touch to find out more.
Guides, News
How can your garden grow (your house value?)
How can your garden grow (your house value?) We Brits love our gardens. So much so, Zoopla has recently reported that we are willing to pay a huge £27,000 premium to buy a property with a garden and a sizeable £243 a month extra in rent. Those in London and North East England are spending […]
Guides, General
Getting To The West End
Getting To The West End For decades, the West End of Glasgow has been a much sought-after place to set up home. The sprawling area from Charing Cross to Partick to Hillhead and beyond comprises some of the most attractive postcodes in the city, if not the country. The beautiful green spaces of Kelvingrove and […]
Guides
Student Safety at College and University
Student Safety at College and University University or College is a great time for a work hard, play hard attitude, but if you’re moving away for the first time or just starting a new academic year, it can be overwhelming. You might think that common sense is all you need to stay safe when around […]
Guides, General
A Complete Guide to Buy-to-Let Mortgages
A Complete Guide to Buy-to-Let Mortgages If you want to become a landlord or develop a property portfolio, you’re likely to need a buy-to-let mortgage. These specialist mortgage deals are different to standard mortgages – and it’s important to understand the key differences. Here’s a useful guide to help you. Buy-to-Let Mortgages – What Are They? If you’re intending to buy a property with a view to letting it out, you’ll need a specialist mortgage. In fact, it’s illegal to purchase a property with a standard mortgage if you intend to generate an income from it – so it’s important to let your mortgage lender know exactly what your plans are. A buy-to-let mortgage is often only available for people who already own a property, and who have a good credit rating. Exact policies differ, but generally speaking, a mortgage provider will also expect to see evidence that you earn £25,000 or more per annum. How Are They Different? Buy-to-let mortgages don’t differ that much to ordinary mortgages; and getting to grips with them shouldn’t be too tricky. However, here’s a few key differences that you need to be aware of. Interest-only. The vast majority of buy-to-let mortgages are interest-only. That means, with each monthly repayment, you’re not paying off any of the capital, only the interest owed against the loan. What are the implications? At the end of the mortgage term, you will need to repay the capital – so you’ll need to have your finances in order by then. Interest rates. Interest rates are often higher than standard mortgages, and you’ll need to factor this in when you make a purchase. Higher deposit. As a buy-to-let property purchase is effectively a business move, the minimum deposit required is often higher than with standard house purchases. On average, expect to pay 25% of the property’s value. Specialist fees. Most buy-to-let mortgages also incur specialist fees, which are more expensive than standard mortgage fees. What Can You Borrow? When you apply for a buy-to-let mortgage, your provider will want to know more information about the purchase and the potential rental yield. This is so they can establish how much they can safely lend you. You can get a good idea about how much you can borrow by working out your rental income. The maximum amount you’ll be loaned is directly linked to the rental yield you can expect to generate. If you’re not sure what this is, ask letting agents in the local area, or check online to see what similar properties are making. Typically, your rental income needs to be at least 25% higher than your monthly mortgage payments. Important Things to be Aware Of Like any form of borrowing, buy-to-let mortgages come with risks attached. It’s important not to rely on the sale of the property to repay your mortgage, as property prices are volatile and your house may decrease in value – meaning you’ll have to find the remainder of the money owed from somewhere else. Unlike other financial products, if something goes wrong, it’s unlikely that you’ll be covered by any consumer protection – so it’s important to make sure your finances are all in order before proceeding with the purchase.
