According to a recent survey, the number of Section 21 two month notices served against tenants for defaulting on their rent rose by 11% in the last twelve months, but since the number of buy to let mortgage arrears cases has fallen by 12% in the same period, it would appear that difficult economic conditions have not yet had a full impact on the rental market.

These figures follow on from previous comments I have made about the problems many landlords (including myself) are facing with the current economic conditions in this country. Money is tight, and for those living at the lower end of the rental market, finding the cash to pay the rent each month is not always easy.

The days where we can afford to be lenient with our tenants are long gone and the first time a tenant is late with the rent cheque is always a cause for concern. Like all landlords, my rental properties are my business, and if my clients fail to pay on time, my cash flow dries up. And with court orders to evict tenants up by 9% in the last twelve months, it would appear that many other landlords are also not willing to wait around for tenants to sort their finances out.

Is there anything you can do to protect yourself from this problem?

Yes, there is. It is vital you check credit references before finalising a tenancy agreement. Taking the time to do this thoroughly will hopefully save you a lot of grief in the long run!

I pride myself on being a respectable landlord. My properties are well maintained and I look after my tenants as best I can (within reason). My property rental business is about making money, but not at the expense of vulnerable people. However, after reading about the Dispatches investigation scheduled for 8pm on Channel 4 this evening, it appears that there are rather a lot of unscrupulous people out there who could best be described as “slum landlords”.

In tonight’s Channel 4 documentary from the award winning Dispatches team, veteran reporter, Jon Snow, promises to lift the lid on the shady world of slum landlords, revealing the “shocking conditions in which tenants are forced to live.”  With scenes indicative of a Charles Dickens novel, viewers can apparently look forward to seeing squalid properties unfit for human habitation being administered by bullying landlords who pocket huge sums of money at the expense of their vulnerable tenants. Andunlike me, these landlords are regularly raking in millions of pounds per year in income from their poor, beleaguered tenants. There is also mention in the programme of landlords in London capitalising on the lack of rental accommodation by charging desperate tenants money to live in illegal sheds!

Frankly, the conditions described in the programme blurb sound appalling and it is difficult to imagine that landlords in this day and age are able to get away with such abuses. But like lots of landlords, I will be watching Dispatches tonight with a great deal of interest.

If anyone had told me a few years ago that a simple text message was the future of rent collection, I probably would have laughed my socks off. Not because I am a technophobe—I love gadgets and new phones just like lots of people—but because SMS seems such a crazy way of communicating with tenants. But the world is changing and in order to stay one step ahead of the game, we need to adapt.

So how can SMS revolutionise the life of a landlord?

Well according to one news report I read this morning, a large number of estate and letting agents are coming around to the idea of embracing modern technology as a way of making life easier. Instead of writing letters or emails to tenants who have fallen behind with the rent, SMS is a quick and convenient way of communicating with the tenant and reminding them that their rent is overdue.

Of course, when you think about it, using SMS is a no-brainer. Everyone and their dog owns a mobile phone these days, whereas not everyone checks email or bothers to open the post thanks to the volume of SPAM and junk mail we are bombarded with on a daily basis. However, sending a polite SMS can often elicit a quick response from the tenant and the landlord can manage payment problems far more quickly. SMS has other advantages, too: it can also be used to contact prospective tenant if you have a soon to be vacant property that matches their requirements.

According to new figures, the number of tenants defaulting on their rent for more than two months in the last quarter has risen by 13%, compared to the same period last year, which as a landlord, I find rather worrying.

Why are tenants struggling to pay the rent?

Well, it’s not rocket science. As most of us are aware, the cost of living has never been so high, and not surprisingly, rents have risen along with the price of food, petrol, and everything else. As a result, tenants on lower incomes are finding it increasingly difficult to make ends meet, which inevitably leads to rent arrears for some of them.

How can you deal with a tenant who has fallen into arrears?

Over the years I have been forced to deal with tenants who cannot pay their rent: it goes with the territory. It is never a nice situation, for either party, but the key to dealing with the problem is to sort it out as quickly as possible, especially if your rental property is financed by a buy to let mortgage.

As soon as one of your tenants falls into arrears with their rent, contact them immediately and try to sort the problem out amicably. How lenient you are prepared to be will probably depend on whether you need the rental income to pay a mortgage. If you do have a mortgage, just remember, you cannot afford to wait for months for your tenant to find the extra cash, or you will also end up in arrears!

I read a rather sobering news article this morning about the financial pitfalls faced by inexperienced landlords who decide to let their properties. In this tale of woe, a lady from Streatham had been unable to sell her flat on the open market and in order to meet her mortgage payments, she had decided to let the flat while she lived elsewhere.

Two tenants duly moved in, but from the outset they refused to pay the full amount of rent as stated in the tenancy agreement. The owner eventually sent friends to the flat to try and sort matters out, but no more rent was forthcoming and the property had been extensively damaged. Five months later, eviction proceedings were finally started against the tenants, although by this point the beleaguered owner was facing a repossession order from her mortgage lender.

So how could this have been avoided?

One important thing I have learned as a landlord is that effective tenant management is crucial when a tenant defaults on their rent—and this is especially true when rent payments are required to cover the mortgage on a property. Rather than end up in the sorry position where you are facing a repossession order on your property, act quickly and put your lender in the picture: they will be much more sympathetic to your plight if they know exactly what is happening.

And if you run into problems, my advice would be do not bury your head in the sand and hope the problem goes away—it won’t!

Are you lucky enough to live near the venue of a major sporting event? Sadly I am not so lucky, but if I was, I would be sure to take advantage of the opportunity to make extra money from the spare rooms in my home as well as maximising the profits from rental property in the area.

Major sporting events such as Wimbledon offer a golden opportunity for opportunist landlords to earn extra income by offering temporary accommodation to sportsmen and women as well as fans. If you have a spare room or flat attached to your property, or even a few rental homes nearby, you can take in temporary lodgers and rake in some extra profits for as long as the event is on.

But before you decide to take advantage of this money earning opportunity, you need to consider the tax implications as HMRC is beginning to sit up and take notice of those who are cashing in on the Government’s Rent a Room scheme. For anyone who decided to let a furnished room out in their main home, this scheme will apply to you (you are allowed to earn £4,250 per annum in rental income tax free), but if the property is already divided into self-contained accommodation units, this tax free allowance is not applicable on any flats you do not live in.

So if you live near Wimbledon, enjoy the extra income for a few weeks per year, but make sure you declare the extra income or you could face a knock on the door from HMRC…

If you are a regular reader of this blog, you will be aware that I have passed comment recently on the growth in the rental market in the UK. Well it seems that the National Landlords Association (NLA) agrees with me as they have just issued a press release highlighting the increase in lenders offering Buy-to-Let mortgage products in the last few weeks.

In the past, when the property market was at its height, many potential investors were seduced by the promise of easy money in the form of rental income. Millions jumped into the buy to let market and built up large portfolios of rental properties, but unfortunately for some, those investment portfolios proved to be unsustainable.

As a landlord, it is important to find the right properties. If your properties are unable to attract regular tenants, they will end up costing you money, which is hardly the point of being a landlord! So before you take a trip down the high street and let yourself be sucked in by the promise of low rates from buy to Let lenders, shop around and make sure you are being sold the right product for your needs.

The NLA recently revealed that 71% of landlords believe that the market would benefit from more lenders and greater competition. Naturally I agree with this sentiment. However, with the NLA also predicting a continuing increase in tenant demand over the coming year, it is likely that the big lenders will continue to bring out new and ever more competitive buy to let products.

Unless you have been living in a bubble in the last week, you will be well aware of all the gloomy news reports about Scottish Power slapping a whopping 19% on gas bills and 10% on electric bills. But as depressing as this is for those of us with a large household to run, how is the rising cost of energy bills likely to affect us as landlords?

My tenants are generally no different to me: they have no desire to throw money away and would prefer to know exactly where they stand when it comes to a monthly budget. So how does the Energy Performance Certificate work and can it help them?

Energy Performance Certificates are designed to make life easier for both landlords and tenants. Landlords are required to provide an EPC on any property they let. Should you fail to do so, your tenants have the right to report you to trading standards.

Why is an Energy Performance Certificate good for landlords?

Well apart from the fact you run the risk of being issued with a fixed penalty notice of £200 should you decide not to bother, providing your tenants with an EPC will help them as it will give them a good idea of how energy efficient the property is and how much it is likely to cost them in terms of their energy bills. And at the end of the day, a happy tenant is more likely to be a long-term one, which is always preferable when you are a landlord.

As I have discussed on here previously, due to low interest rates and increasing numbers of tenants looking for long term lets as opposed to buying their own homes, there has never been a better time to think about dipping a toe in the buy to let market, but what about those of you who already have a portfolio of buy to let properties?

According to a recent survey published by Townends estate agents, a lot of landlords are taking a good hard look at their investment portfolios and realigning them based on current performance levels. This can occur for several reasons—perhaps you have decided to get rid of your larger properties in favour of student style accommodation, or perhaps an area previously targeted is not performing well. But whatever the reasons, Townends noted:

‘We are experiencing instances of landlords looking to off load properties and opting to do so by selling to other investors with their existing tenant in situ. Whilst this may seem counterintuitive at first glance, savvy landlords are actually using the current climate to adjust and restructure their portfolios, and often selling to another investor can be the quickest and most cost effective way to do so.”

It doesn’t take an expert to see that this decision makes sound business sense. As the Townends survey quite rightly points out, potential investors will see that the property has proven yield, and you, the landlord, can continue earning rent until your property is sold on to a new landlord!

Well I think it is! If you have enough spare cash to invest in a buy to let property, I firmly believe that now is an excellent time to make an investment in the rental property market, not only because buy to let market is always a great investment, but because mortgage interest rates continue to remain at an all-time low.

I checked out some of the big lenders last week and I can see that there are some excellent buy to let mortgage deals on offer to potential landlords, so if you are due to remortgage your existing property, it might be a really good idea to consider making the leap into the property rental market.

Why will remortgaging my home help?

Lots of us are lazy when it comes to remortgaging our properties—I know I have missed the boat on occasion and consequently ended up paying far more than I needed to when my introductory rate ended and my mortgage reverted back to a higher base rate. But by being a little more financially astute, you can take advantage of a great remortgage deal, free up some cash, and use this as a deposit on a buy to let property.

Building a buy to let investment portfolio has proved very successful for me and the signs are good that the rental market will continue to increase as more and more people choose to rent rather than buy. So with buy to let deals so competitive and interest rates so low, so what are you waiting for?