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Hi folks - I'm looking at setting up my first multi room and need advice !! Its only a little one - 4 beds , 2 floors. Pretty standard 1975 house. I'm going to convert one of the downstairs living rooms into a bedroom. Am aiming at Professionals.
Has anyone any sound, common sense advice on doing a multiroom ?
Any advice on who pays bills ( inc Council Tax ) and the best way to manage this ?
What Contracts do I issue ?
Thanks !
A
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Standard AST's will be ok... token meters if your not paying the bills...
Make sure the fridge freezer is big enough for 4... Locks on all doors... TV and licence helps to keep tenants happy... u also pay water rates...
hopefully that helps u, i have 6 multi lets, there hard work so good luck...
Alex M |
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Thanks Alex - do you pay Council Tax ..?
Dont mind the work - the yield is quite nice !
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no mate i don't but saying that mine are student multi lets and students are exempt from council tax... so suppose u would pay the council tax and add it into the rent...
A good tip is make sure you put fire prevention mesures in the house and good smoke alarms in every room. All furniture to be fire resistant..Avoid smokers at all costs as they will smoke in there room and this is where fires are started... |
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Andy,
Issue one standard AST for them all to sign, that way should one person move out then the rest are still liable for the full rent.
If you letting to professionals then dont get token meters as it is very tacky! As long as they put the utilities in their name there is no come back on you should there be unpaid bills. (Just make sure you check them in with the meter readings and check them out).
Also with council tax you just need to write to the council letting them know the new occupiers.
If they are professional sharers/friends then I would only put locks on the internal doors if they ask.
It goes without saying you need to fulfill your statutory duty with gas checks etc
cheers, John |
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Mate John is so wrong and wrong and wrong.. Think if the bills are in there names, what happens when one moves out? means you have to give meter reading and get bills all the time. It's common practise to have payment meters in multi lets and it is not tacky at all... You cant issue one AST for them all as they will not all know each other so why would one want to be held responsible for a non payer or for damage caused by another tenant... From what you said you will be multi letting to proffessionals who do not know each other... It's always best to put locks on doors as this protects against theft and prevents against any future problems, plus some insurance company's will only insure there rooms if locks are on doors. If they are proffessionals then they may have laptops and other electrical goods.
LMAO at the one moves out there all responsible for the rent, mate you wont get anyone in under those circumstances, what happens if there becomes one tenant does this mean he has to pay for all the rooms?
Anyone on this forum will tell you no one knows this game better than me... |
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LOL,,,, Have i missed something Malik..? your view point on this and any thread are valid mate, and Andy now has 2 options as John the "resident Broker" not! has given a totally opposite answer to me...
Now i have 26 properties in total (which i manage myself as well as run a busy mortgage brokerage) and 8 of them are multi-lets.
Andy if you need any contracts and stuff then let me know... |
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Alex,
Just because you post aggressively it doesn’t necessarily mean you are right. Let’s take your points in order:-
1, Bills. In my experience it is standard practice to put bills in tenants names.
Professional sharers do not want to be traipsing down to the local petrol station to top up their electricity. When they move in you give their names to the utility companies – if they move out without paying then the utility company would go after the individual not the property.
2, AST. Professional sharers often do know each other as they are looking for a property together. (Alex look up standard mortgage criteria for sharers if your not sure). If you are getting different people in to the property at the same time putting locks on doors etc then you are going into HMO territory which is different to professional sharers
The key point to having one AST is that it is the joint tenants responsibility to pay the rent. Should two people move out then it is up to the other two people to either move out as well or get another two people on the AST. (Check out LOOT for rooms to rent and you will see thousands of examples)
3, Locks. Mortgage companies have different criteria for multi lets and some lenders wont even allow you to have locks on the doors for your multi let properties. So again it is all about definition.
I am also an experienced landlord and have been renting houses to professional sharers since 1998 so please don’t act the big guy with your superior knowledge and experience because there are other people around who have similar experience, knowledge and opinions.
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First of all, Andy is looking for 4 people to share a house ok and i very much doubt if they will all know each other as if they do then why would they not just rent an house as this would be a lot cheaper than renting a room. I.E. house to rent around here = £450pm... rooms in one of my house = £65pm excluding gas, elec, council tax now that comes to a whopping £1,126pm... now lets assume profeesional sharers are thick, as if..
If they know each other then simple they will get a house as this is a lot cheaper, if people don't know each other and just moved to the area then renting a single room in a house is cheaper than renting an entire house.
Its not easy putting the bills in there names as they will be moving in and moving out at different times.
And if one moves in June and 2 in July and the last in September how do you get them all on one AST? im assuming you will do new ast's everytime a client moves in... And to be honest they are renting a room with shared facilitys and in no way would they be able to afford to pay rent on empty rooms this is the landlords responsiblity and not that of the tenants, he/she just wants a room. |
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Alex,
You haven't missed anything: My LOL was to the diversity of answers possible to all the posts in this thread...
My properties are mixed: commercials, residentials, storage and even a car park (!). I don't have any "shared" as I don't want the hassle factor. More power to you in this as its a better yield.
Regards, Malik |
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Thanks Malik, it did make me laugh i must say... LOL.
Hassle factor your quite right mate, loads of it indeed... Your car park one is interesting. |
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Alex,
Thanks for your reply not quite as aggressive this time but equally confusing.
However some clarity please - do you realise there are different definitions for multi-lets NOT just your definition?
If you do then please post your definitions (should be easy your in the mortgage game) if not let me know and I will go through the different definitions for you - you never know you might learn something!
John |
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ok, john. go 4 it. Ive only ever done student lets, so im happy to learn, that's what the forum is all about.
Ill look forward to your responce.
thank you |
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Be aware that letting to this number on individual tenancies means you have an HMO (House in Multiple Occupation) and whilst non-licensable it should still conform with the regs and you should really have planning consent for it. Speak to the local council or see their website for details. More recent red tape! |
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HMO = 3 STOREY OR 5 OCCUPENTS OR MORE.... Councils do differ on this. I spoke to mine and asked them with reference to mine as i have 6 students in one (standard house) and 5 students in another (standard house) and i have 4 students in others.. council said i dont need a licence, however the 6 and 5 student ones are HMO but do not require any licence or work.. |
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Hi Alex,
In your earlier post you said “Anyone on this forum will tell you no one knows this game better than me...” after giving advice on multi let properties - now your saying you’ve only ever done student lets!
There are some lenders who are happy with multi-lets and not student lets, there are other lenders that are happy with professional sharers on one AST but if you were renting rooms on a room by room basis they wouldn’t be happy.
This is a good guide to determine if you need a mandatory HMO license:
http://www.rla.org.uk/rla.exe/landlord/guides/hmo/property_licence2.htm
John
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err, thats nothing i don't already know. I thought u was going to educate me.....
Proves my point i guess,,, u were wrong!!!!!!!!!!!!! |
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quote:However some clarity please - do you realise there are different definitions for multi-lets NOT just your definition?
If you do then please post your definitions
still waiting for those definitions |
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Alex,
Your thought process is bizarre - how does this post prove I'm wrong?
I posted an alternative way of running multi-lets and then went on to say there are different definitions. I have never said you were wrong or I am right I was just giving you my opinion and a different perspective.
You were the one who said I was wrong and then went onto admit you have only ever done student lets (please reread the first post Andy said professionals NOT student lets).
I then ask you to post your definitions of multi lets and you dont seem to be able. Alex - you are a mortgage broker, can you not give me a different definition of a multi let apart from a student let.
Most lenders have their own definitions on multi-lets and its key you understand these to be able to give best advice - if you are not sure how can you properly advise on these?
Do you want me to post these definitions for you. They are available if you call and talk to the lenders yourself. Wouldnt it be a bit embarrassing for you if you needed me to do that?
John
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John, i don't wany to get into an argument with you ok, u posted a totally diferent responce to me ok and i think that is wrong and still do. you then reply QUOTE "if not let me know and I will go through the different definitions for you - you never know you might learn something!"
Well im still waiting to learn, so please teach me, i admitted i did not know, so please post up all the different definations of Multi-Lets.
Ive spoken to 4 lenders and 2 packagers today and a broker friends of mine and all say they is only one defination of multi-let and that been a group of people renting rooms in a building. i.e. Multi (more than one) Let (receive payment for a room)
I agree there are different one of doing multi-lets and im fine with that, as there is the simple way and John's confusing difficult way,
i.e. John way ... 4 tenants sharing a house as multi-let and 4 tenants now become 1 and guess what as a landlord im not bothered about filling the other rooms cos my last tenant has now got to cover all the rent on the other 3 rooms, what planet are you on.
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Alex just to clarify for those people who are considering multilets:
A licensable HMO is one with 5 or more people over 3 storeys or more.
More than 2 people, who are not classed as one household or family, sharing a two storey house is still an HMO. If you use seperate agreements with 3 or more people in a house it is still an HMO. The grey area is say 4 people sharing but on all on one agreement - you may get away with this as one household.
What I am getting at is that whilst many multilets are none licensable that does not preclude the landlords from conforming to HMO regulations. Councils still have the power to check none licensable HMOs and ensure the landlord's properties are up to standard. |
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Hi Rupert, good post and quite right. Your property can be an HMO but no licence is required.
I checked all my multi-lets with the council and to my surprise they said they did not require a licence.
Im on there landlord approved list so they have a list of all my houses. It's all just rubbish and designed to create jobs from wealthy people.
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Alex,
Please see an example of lenders criteria below and see how different lenders define multi-lets differently.
Please don’t say you know this already otherwise why didn’t you post your reply when I asked.
BM Solutions
Professional Sharers: Upto 3 people-must all be on the same AST
Student Lets:No
Seperate AST's:No
Mortgage Express:
Professional Sharers: Upto 7 people-must all be on the same AST
Student Lets:Yes-have to be on one AST
Separate AST’s:No
Paragon
Professional Sharers: Yes
Student Lets:Yes
Separate AST’s:No
And why are you asking me what planet I'm on - is this your only recourse - personal insults, oh dear... |
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LOL
(for explination please see the response I gave earlier...).
Regards, Malik |
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Andy
Here are my thoughts on what you need to do:-
Its only a little one - 4 beds , 2 floors. Pretty standard 1975 house.
Great because that generally means that you avoid most HMO legislation. It will still be a HMO because more than 2 unrelated people constitutes a HMO but regulations are less rigorous on 5 or less in a 3 storey or less.
I'm going to convert one of the downstairs living rooms into a bedroom. Am aiming at Professionals.
Good market to be in. I have HMO's from key worker (ie blue collar) through Professionals and I have much less hassle from my Professionals.
Has anyone any sound, common sense advice on doing a multiroom ?
Individual AST or Licence Agreement is what I use. All bills included. I include cleaning once per week to make sure place is kept tidy plus gardening. Depending on type of property you may wish to include other facilities as well (broadband etc).
Any advice on who pays bills ( inc Council Tax ) and the best way to manage this ?
You should pay all bills as you are the only constant in this market - tenants move in and out all the time.
What Contracts do I issue ?
AST's provide more protection for tenants. Licence Agreements provide more protection for landlords but not all lenders/insurers accept them.
Thanks ! A
Myself and my business partners all specialise in HMO's and run a bi-monthly course on how to get started in building a successful HMO business. We provide a free 20-part ecourse which gives you more information and tips to get started. Please feel free to sign up at www.propertywhys.com
Good luck - multilets are great for cashflow! We make between £250 to £1,000 pcm from them. |
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I am in a similar position to Andy Geldar in that I am getting my thoughts clear and looking for a suitable multi let property ATM.
Thanks for the answers above guys, great to get advice from people who know what they are doing.
A couple of questions though.
1. Are you really bothered about lenders requirements concerning Multi Let, as long as they get their cash they don't give a toss in my experience.
2. How do you go about finding new suitable tennants ?
3. In your experience do your tennants care about parking facilities ?
4. Would you say 3 or 4 tennants is the minimum worthwhile to maximise profits?
I have a friend who has run a multi let for years but his new tennants are generally word of mouth and on DSS, I would prefer targetting working people myself.
I have two 3 bed properties which I rent out and the tennants have been really good but I am tempted to refinance and buy another for multi let.
You guys taking the time to answer my boring questions is really building my confidence to do this and I am really appreciative. Nice one.
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Hi Alan,
1) correct mate as long as they get there money and u got the rght insurance.
2)i advertise in the local paper, however if your area is populated with the pole then do some calling to the local factory's who are employing them.
3)Not at all.
4)Yes mate min 3 tenants
Avoid the DSS ones if you can, u should have no probs getting employed in there mate... Remember locks on doors and large fridge like a draw for each tenant, tv areial point in each room,... make it like you would want it your self if u were taking a room there.
all the best
alex
and thank you for your kind words in the other thread |
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Thanks Alex.
I am like yourself, don't tolerate fools gladly and communicate in a clear and direct tone, sometimes I too hurt others sensitive feelings. But I've learnt to deal with these failings of mine.lol.
Let me run this past you to see if it sounds a winner.
5 bed house over 2 floors + 1 living room rented as a bedroom. £60 to £70 per room/week. Purchase price £120,000 mortgage approx £700 + £250 per months additional costs (gas elec etc). Should approx break even with only 3 tennents. |
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Hi Alan,
Interest only would only cost you around £500 ref to bills, gas electric, water rates, tv licence, think you might get away with around £150 tops...
Hope this helps.
All sounds good to me though, go for it.. |
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Thanks for your posts guys: I'm learning a lot. I have never gone in for the individual room let due to the hassle factor; however the more I look at the numbers the more appealing it becomes..... As I mentioned in the past all my properties are either commercial or family domestic (houses and flats)…
Please excuse the ignorance of these questions:
what would the roughly estimated monthly bills (gas, electric, water, TV) come to for a minimum 3-person let? If possible please give an individual estimate (e.g. gas = £X per month, electric =£Y…).
Do you have a pay telephone or non at all?
Regards, Malik
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as a big favour to you both ill ring the utility company up tomorrow and find out the consumption on a house that i let to 3 students the year gone.. they paid all there own bills but i can ring and find out the total paid in for the 9 mths they were there. |
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Thats very good of you Alex. Thank you.
Regards, Malik |
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Alex? Any joy with the fuel billing information?
Regards, Malik |
