7 STEPS TO PROPERTY MASTERY!

How to use this guide

*Either read the guide in full or go the relevant section. There are 7 section in total, all the most important aspects of property. The difference with guide is that I have also given real examples, these are highlighted in yellow like this. Example. * Its exactly like everyone says property (generally) is not a get rich quick scheme. It takes lots of hard work and you must expect set- backs. That said by having this guide you are at a distinct advantage. Its taken years to perfect....do it my way and you will have plenty of success in the long term!!! To your greatest success. Sections.... 1. 2. 3. 4. 5. 6. 7. Moving Tenant Into Property and Evicting A Tenant Selecting Good tenants Managing Expenses Maximising Rents/Reducing Voids/Collection of Rents Managing Your Time Renting to LHA Tenants/Collection of Top Up Payments Tracking Key Data Including Spreadsheets

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1. Moving A Tenant Into A Property to Evicting a Tenant

Its dead simple allowing someone to move into your property. Its dead simple when everything goes according to plan and you have a tenant who pays the rent on time every month. Unsurprisingly its usually when things go wrong that landlords react to problems. And in my experience they lose a pile of money because they have not set up a tenancy correctly They make the problem worse by failing to act once a problem has emerged (a problem has emerged as soon as the tenant starts repeatedly missing rent payments). Even if they have only missed one payment, if they are not returning phone calls or are avoiding you, you should take action immediately. Many landlords have a go themselves because they really dont appreciate how important it is to get these things correct. Dont make this mistake dude.

This will lead to extra delays when trying to evict tenants and worse some landlords leave themselves open to potential criminal charges by harassing tenant (usually because the landlord becomes frustrated and tries to take the law into their own hands. To set up a tenancy correctly you should serve a S21 at the start of the tenancy. Ideally you should also secure a guarantor. And if its a Housing Benefit Claim you should also have them complete a letter of authority. In a world were many tenants want to dig there heals in and were judges tenant to side with tenants when given any opportunity, setting up tenancies correctly is vitally important.
Example Please see here to see exactly how the forms should be completed and what forms will be received when you are evicting a tenant. Go to my website www.potential2lettingsblog.com and check out the How to Section! Note: Some documents will appear to be duplicated, this is because when you submit the court paperwork you also need to supply a copy of the tenancy agreement and S21.

2. Selecting Good Tenants

Good tenants will pay the rent, look after your property and be there long term. Bad tenants will make your life hell. Whats the magic formula? Some people will insist you must take a deposit and you must get a guarantor, and the applicant must pass a credit check. Sounds easy doesnt it? I wouldnt disagree that all of the above are desirable things in principle. But 1) By themselves they dont guarantee a good tenant 2) What happens if your property is in an area where there just arnt that many people who fit this profile? When I worked for a bank, when looking to lend money we would look at 3 things. Stability, Ability and Willingness, this is an approach I use when looking at tenants. Stability How many times have they moved in the last couple of years? Do they look like a stable unit? What ties do they have to the area? How do they conduct themselves? Ability Can they afford the property? What do the bank statements show? Someone can pass a credit check but it doesnt mean they can afford a property. Are they overdrawn? How often? If the rent is more than there current property will the increase cause problems?

Willingness

How do they repay credit? Do they pay there current rent? Lets say someone has privately rented for 10 years and never missed a payment. Are you seriously not going to grant a tenancy because they might have failed a credit check, even if it was a serious matter I would still look to give this person a tenancy agreement. And Protection! This is in the form of a guarantor. You want the guarantor to be a home owner, as in the event they end up owing you money and refuse to pay it back, you can put a charge against their property.
Example Heres a couple of recent applications we received for a property and our reasons behind the decisions. .....

3. Managing Expenses
This is an area were a lot of investors fall over. You really need to pay proper attention to this. Consider not only the actual cost of the repair but also the time and effort of organising the repair. Do not necessarily go with the first quote that comes along. Some so called tradesmen can cause more damage. Cheap isnt always best. Be particularly careful with. Roofing/Gutters. Its difficult to know a lot of the time what the actual problem is, so its easy to be misled. Get them to draw a diagram, ask lots of questions, start them off on small jobs. Central heating installs Incorrectly or poorly fitted central heating systems, can cause lots of problems and expense at a later date. So the initial saving by using someone who was cheap can quickly be eroded at a later date. Also make sure you keep hold of any guarantees which can be used at a later date if there are any fault. Damp/Condensation Its pays to know about this. It really does. So many so called damping contractors either dont know the science behind this or dont want to share the science. Either way, it means a lot of the time you are paying a bigger bill than necessary. Winter Time

Always drain down empty properties. It gives you much needed peace of mind and avoids having to deal with insurance companies. N.B If you dont drain down the system make sure the heating is left on, or could you find the next time you visit the property your property is destroyed. I advised someone last year to drain down the system. He didnt listen. He told me the property was very warm. Burst pipe occurred. Property was completely damaged. And it was still me Top Tips Bulk Buying.... Where possible, when you are going to have a lot of call for a particular item, try and negotiate a discount based on volume. For instance, I decide to install interlinked smoke alarms in all buy properties. I bought 100 of these and was able to get a substantial discount. It matters not if you only own one or two properties, work with other investors to obtain good discounts.

Managing Insurance Premiums ....It makes sense to have all your policies with one provider. My top tip is to reduce your premiums you need to increase your excess. I increased my excess to 1500 and it reduced my premium by around 50%.

Managing Risk....this is really important. Ensure you are 100% accurate with insurance companies and make sure if you rent to Housing Benefit tenants your insurance company are aware of this. Visit empty properties as regularly as possible and if your property has an instance, where it is damaged by crime, immediately take safety precautions.....you can now buy alarm systems which send you a message if someone enters your property, they are an excellent investment!

Is it your liability? Ensure its your liability prior to instructing any work at a property. 1. If its a drainage problem contact your local water and sewerage company and advise them of the problem. They generally have a duty to inspect and in my experience attend very quickly. 2. If you have a van and its not sign written, you can apply to the council for a number of permits which permit you to dump household rubbish at local refuse yards. 3. If the problem is on a boundary, make sure you find out who is responsible for maintenance

Also I track what faults I get on each property using an excel s/s. At the end of the year I can track how much I have had to spend on each property.

Example See below for a screen shot of how the s/s looks- Click here for screen shot-

You will see how each property has its own unique reference. This makes it far easier when wanting to track information. Also I have designed the s/s you only have to enter the number and address information is automatically populated. This is the same for every tab. I talk more about this in the section on tracking key data.

4. Maximising rents/Reducing Voids/Collection of rents

Youre running a business, always keep this in the forefront of your mind. So this means you should always be looking to obtain as much rent for the property as possible. If you have various candidates who are very similar, see whats the most they are prepared to pay for the property. Estates agents do sealed bids and this is no different. Dont not take top up payments because you view them as hardwork. Set up simple systems so that the collection of top ups is a fairly straight forward task.

Ensure you market your property effectively. The position of your to let board is very important. Consider using a hand written board, in my experience they pull more response. See here for some example of My advertising approaches and hints and tips. Example 1- A Board (cost about 39.99 each) Example 2 To Let boardExample 3 Press advert (see Below for example) Remember you pay by the line. Make your adverts economical as possible. L20, 3 bed,DHS ok,550 upfront,Call 0151 356 7551 Example 4- Tenants Wanted Leaflet

5. Managing Your Time

Yes this business is very labour intensive. It will suck the life out of you if you allow it! Most of the time you will be speaking to tenants, assessing how suitable they are, showing them properties and in moving them in. Be extremely disciplined here. Control the conversation. Find out quickly if they meet your requirements. Dont have any requirements, quickly get some!

Mine are. I insist on the tenant having the first months rent and having a home owner guarantor, and being over 21. This is just a provisional check to ensure this person is worthy of us spending more of our valuable time on. I also ask their age, how many times they have recently moved address, have they privately rented before. Once you have this data you can then decide is this person a good prospect? Then tell them about the properties briefly and arrange a viewing. Do not become a travel guide or a social worker! You are a letting agent! Equally when you arrange viewings, arrange them we early in the morning or after office hours. This is because typically the phone rings most between 11 and 5 in my experience. So if you are going to be out the office make it between these times. On that note if you are visiting councils with Housing Benefit paperwork also make sure you do this 1st thing in the morning. As after 11 and you will inevitably be competing with every mother and their pram!

Property repairs are another area were you can find you spend a lot of time chasing your tail. Quickly find people who return calls quickly, do a good job, you can trust and who do not think the world owes them a living. Tradesmen should work to your system or they dont work for you, its that simple. I have a set time on a Friday when tradesmen come into the office to be paid. Dont have anyone dictate terms to you!! On this theme leave aside a set time each week when you deal with the inevitable build up of administration. Probably again Friday afternoon is good. You dont want to be coming into work on a Monday morning and starting to deal with admin, it is very de- motivational! Rent arrears are another critical area you just be all over like a rash. Make your job as easy as possible by making sure all rent payments (if working) are due at the start of the month. That way it is one simple check at the start of the month to see owes money. I know a number of landlords and although I have mentioned this to them I dont think any have taken this advice on board. Even if you have 10 properties, it becomes a bit of a task checking who has paid when. In my opinion this is major reason why landlords end up losing more money than they should. Top tips Set all rents up for collection on the 1st of the month Do all your marketing activities for each property at the same time Only attend for viewings when the caller has confirmed 1 hour before Issue section 21s at the start at the tenancy and get a receipt Do block viewings at properties Create an organised filing system which you understand Use software to auto generate tenancy, guarantor, section 21 documents, dont handwrite this information especially when you are replicating information

6. Renting to LHA tenants/collecting top up payments

This is an absolute mine field. On the one hand, if you are like most people and own properties in the more deprived areas, DHSS make up a big part of your target market. However because you are dealing with councils and tenants- both of whom will mis- inform you and frustrate you- you often get very unpredictable results (aka YOU LOSE MONEY). So the answer is not to rent to this segment of the market then, right? Instead you should wait an extra 2-4 months to find a tenant? Not really no. You have your systems set up to anticipate problems and you get to know how the DHSS system works. Principally,

Always get permission to discuss the claim from the tenant Insist you want the HB paid direct to you to find how you do this, there should be info on my blog, if not contact me directly Respond to all problems with payments quickly, if a claim has been suspended contact the tenant, if you dont receive a positive response start eviction proceedings.

Collection of money Worth working tenants everything is straight forward. They move in and they pay you a set amount once every month. With Housing Benefit tenants its no where near as simple! Firstly, I would recommend whether you receive the money direct or not, that you do not change any tenancy agreements to four weekly. The very idea of having someone pay you on a different day each month scares the life out of me, from a logistical point of view. Collection of top up payments This is where a lot of investors go wrong. This is because they either A) Dont collect top up payment or have stopped collecting them they view them as not worth the hassle or B) Collect them but in such a disorganised or inefficient way that the extra time it takes them to collect the money is not worth the time or hassle! My Way- The third Way When you own a decent sized portfolio and want to try and stop going grey, you need to think very carefully about everything you do. This means you find compromises which save you a lot of time and prevent unnecessary amounts of time being wasted on seeking perfection. So quite simply when the tenant moves in, advise them that the top up payment will always be due on the 1st of the month! Its easy for the tenant to remember and you to track. If for some reason they cant do the 1st of the month, set another day. The key point however is you dont get caught up in having to check your bank account constantly for small payments. It can quickly become a real time killer, which then defeats the object of actually doing it, especially when there are other more important things which should be taking up your time. Check the account once or twice a month for payments. And mark off when it has been paid. If its not being paid, I would make a call but I would not spend vast amounts of time chasing this. Dont bother with letters etc they dont tend to work. And in the final analysis as long as everything else was ok would probably just let the tenant stay in the property until such time perhaps as the amount became greater than 1k, when perhaps you could start eviction proceedings.

7. Tracking key data

What kind of things should you be tracking?

Housing Benefit claims How long it takes for you to let property. How much you spend on repairs by each property Your occupancy rate % of accounts in arrears Tenancy dates- start and finish Duration of tenancies

You should break these things down by month, so you can compare your performance against your key business goals. And anything else you feel is a useful measure of how successful your business is. I have so much time can be wasted by not having the information you require at the press of a button. I have found especially with HB claims you need to have a very clear system for monitoring each claims. If you are going to use a custom tracking system, be careful on the package you decide to use. In my experience many of these software packages have been designed by people who think they know whats important when actually they dont. Its often the case that they track that many items of data, you simply lose yourself in the software and worse still you can neglect and miss the really important stuff. I cant emphasis enough, make sure you are happy and understand the system you are using and make sure the system you use in fully integrated into every other aspect of your business. I have developed my own excel spreadsheet which is perfect for the small, medium or large landlord. I have developed it with simplicity of use in mind. My system has many advantages. One point of use for each operator, just one spreadsheet Loads quickly and can be understood in minutes Key information separated by TABS, information easy to find Allows property expenditure per property to be easily tracked Housing Benefit claims easily tracked Gas certificates and maintenance checks easily tracked Additional piece of kit so you can generate the perfect tenancys in 5 minutes flat.

If anyone would look like more information on this (im not selling this to the general public at this stage), drop me line with Tracking Software in the headline. Anyway, I hope this guide has been very useful to you. If you ever need any help renting out property or buying more heavily discounted property, please call me. In Your Service, Jon Bieri 0151 356 7551