| Most landlords see the relationship between tenant | | | | Tenancy Agreement £20 |
| and landlord as pretty straight forward & | | | | Setting up DD £20 |
| passive. The landlord provides the tenant with | | | | TDS (guarantor fee) £50 |
| four walls and sometimes a bed to sleep on. In | | | | Check in / inventory £50 |
| return a tenant pays the landlord an agreed rent. | | | | Check out £50 |
| Occasionally if landlords are lucky they can put the | | | | TOTAL £230 |
| rent up and that is about as complicated as it | | | | Toby Hone of the website the-home-place in his |
| gets. | | | | book on surviving the credit crunch urges |
| The main job for a landlord is to manage the | | | | landlords to not ignore the potential revenue |
| costs such as the buy-to-let mortgage costs and | | | | benefits of charging. He makes the simple point |
| maintenance costs as this will in turn maximise a | | | | that: |
| landlord's net rent. The net rent being the bit left | | | | "Why don't you as the landlord charge your |
| over after a landlord's costs have been paid each | | | | prospective tenant a fee. In most cases the |
| month generally referred to as a landlord's | | | | letting agent would do this as a matter of course |
| cash-flow. | | | | anyway. " |
| Additional revenues for landlords from tenants | | | | His view is that a landlord could charge between |
| However, recently and prompted by the credit | | | | £150-250 each time they let a property. |
| crunch I've been seeing more and more landlords | | | | Given that the average tenancy last 9 months |
| using their relationship with their tenants to make | | | | then this could equate to |
| additional revenues. This is only sensible and | | | | £200-£330+ each tenant each year. |
| reflects what many companies and businesses do | | | | Where a landlord has a multi let where each room |
| in the wider economy. | | | | is rented out then this could equate to many |
| Once a business has a customer, their next step | | | | hundreds if not thousands of pounds each year. |
| is to see how they can retain that customer but | | | | Another example of charging your tenants a fee |
| then see if there are any way that they can | | | | is where landlords shun the TDS in favour of |
| make additional revenue from that customer by | | | | using a guarantor. This is particularly popular in |
| selling them additional services. In business | | | | student letting and our student landlord expert |
| parlance it's all about increasing the average spend. | | | | Bee in the bonnet shows how this can be done. In |
| Let's examine where it is possible for a landlord to | | | | this case it is perfectly legitimate for a landlord to |
| look to make additional income from their tenant | | | | make an admin charge for this. |
| in perfectly legitimate and legal ways in order to | | | | Once the tenants moves out the landlord also |
| help landlords cope with their rising costs. | | | | needs to carry out a 'check out' for which it is |
| Firstly, the main area where some landlords have | | | | also reasonable to charge a fee for. |
| for some time being legitimately charging a tenant | | | | Non-performance tenancy charges |
| money is in connection with the management | | | | There are other charges that the landlord should |
| costs of setting up and ending a tenancy. | | | | have set up automatically as part of the tenancy. |
| For years landlords have accepted the whole | | | | These are more penalties in respect of |
| vetting, letting and moving out of tenants as just | | | | non-performance of the tenancy agreement but |
| part of the process of renting their investment | | | | nevertheless they should be in place. In a tenancy |
| property. However, increasing demands by | | | | agreement it is worth installing a provision with the |
| government in terms of additional regulations such | | | | Assured Shorthold Tenancy agreement that |
| as the Tenancy Deposit Scheme (TDS) and HMO | | | | includes a £35 admin charge for any late |
| licensing and the soon to be introduced Energy | | | | payment along with an interest charge payable by |
| Performance Certificates (EPCs) all increases the | | | | the tenant on any overdue amounts of 5% |
| time burdens on landlords. These regulatory | | | | above the Bank of England base rate. |
| burdens often come with extra financial costs but | | | | Additional services |
| most importantly they all take additional time | | | | Landlords should be aware of the possibilities of |
| without producing any additional revenue for | | | | charging their tenants for additional services. Just |
| landlords. | | | | as today consumer is always looking to ease the |
| These administrative tasks are what in the | | | | burden of everyday humdrum chores so tenants |
| service sector would class as professional | | | | are often quite often happy to pay for extra |
| services. For years many letting agents have | | | | services. For instance many busy professional |
| been 'making hay' out of charging large fees to | | | | tenants would be happy to splash out a few |
| carry out these basic tasks. Residential landlords | | | | extra quid in rent in order to benefit from a |
| on the other hand being largely small amateur | | | | wireless computer network or satellite TV. Once |
| outfits have largely chosen to absorb these costs | | | | installed, these things will generate small but |
| within their overall costs to their business. Given | | | | tangible additional revenue for a landlord. |
| that landlords carry them out themselves and it | | | | Other services that could be charged for are a |
| mainly involves their own time and therefore does | | | | laundry & ironing service, together with a |
| not involve incurring any direct financial cost; | | | | cleaner. These are all services that could |
| landlords have generally seen it as just part of the | | | | potentially be attractive to your tenant and which |
| letting process. However, closer research amongst | | | | could provide you with valuable additional revenue. |
| letting agent shows that many of these tasks are | | | | When the tenant leaves |
| charged for. | | | | Even when the tenant leaves this could be an |
| Some are charged individually, or others | | | | additional source of revenue for a landlord. This is |
| collectively as part of the initial letting fee. A | | | | because if the tenant fails to clear there rubbish |
| breakdown of these costs produces the following | | | | then a landlord is quite within their rights to make |
| as legitimate fees that a landlord could charge | | | | a reasonable charge for the disposal of this. Not |
| their tenant for their professional services as part | | | | only is there the disposal of these items but, with |
| of the setting up and management of the | | | | the advent of E-bay frequently one person's junk |
| tenancy. | | | | is another person's lucky find. An enterprising |
| Possible letting services & possible charges | | | | landlord can often find a use or value out of a |
| Credit check £20 | | | | previous tenants cast offs. |
| Interview charge £20 | | | | |