Published On: August 17, 2017 2:43 pm
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Private landlords lettings are increasingly the mode of choice on the Isle of Wight, as both sides seek after a more equitable exchange.


Private landlords lettings on the Isle of Wight are becoming a more common occurrence as landlords and tenants  alike utilise goodwill plus a little technology to bridge the marketing/trust gap, previously braced by estate agents.

Anyone who is familiar with living on the Isle of Wight will be able to confidently testify of its residents’ distinctive island attitudes. This is regardless of origin.

Whilst having a reputation of being commercially ‘sleepy‘ in comparison to the ‘mainland’ – you could interpret this ‘way’, as being removed from the obsessions of fast lane gains, and instead being more inclined to share and give.

In recent times, many a mainland resident has sought the quieter climes of the island as a refuge from the rat-race experiences of ‘over the way’.

When speaking to such ‘Solent sojourners’, you’ll often hear of their initial resistance to the slower pace characteristic of island life.

Yet with time, they have learned to embrace the change with patience, finding ‘after all’ that a steadier pace actually reaps all-round more favourable benefits for their households.

A little of the micro-economy…

The rental market is typically quite slow as reported by island estate agents as compared with their mainland counterparts.

This is typically attributed to the general lack of employment opportunities on the IOW, in relation to the demand for work. A balance which some not-for-profit organisations are eager to address.

Investment in labour acquisition tends to be seasonal, centred around the short-term injection of fleeting tourist trade. Engineering firms, especially those involved in marine activity provide work opportunities based on commercial contracts for production.

Fewer available employed positions, has a downward pressure on the buoyancy of the property rental trade. However, in a way, this has led to a more direct and empathetic approach being taken by some property owners, in respect to finding tenants.

What do private landlords and private tenants typically look like?

According to reports following the census conducted by the UK Office of National Statistics, there is an age divide by-enlarge between those private landlords vs. private tenants.

By statistic, the age divide separates out those asset holders from those seeking to borrow at a price, as two distinct generations.

Private landlords being retirees over 60 years of age vs. their tenants as 20-30 somethings, often single or as unmarried couples.

Young families, in increasing numbers, are also among those on the island seeking short-term private accommodation, whilst pursuing homeworking arrangements.

Although in atypical instances, much younger private landlords who have developed off-shore career interests over time, having acquired IOW property, find themselves renting out to sometimes even older tenants.

Such tenants perhaps grew up on the isle during their youth and having departed for work, return to The Wight to slow things down a little, sharing home relocation with adult children.

Private Landlords vs. Tenants by Age - Isle of Wight Org

 

Whilst the generation gap typically divides landlords vs. tenants on the Isle of Wight, statistically they share the common factor of so-called ‘economic activity‘.

Mostly, both parties are employed.

Therefore the capital investment of the landlords’ working wages in acquiring a mortgage has provided the benefit of accommodation to the tenant, whose wages in return are providing the financial means by which mortgage repayments of the landlord occur.

Outside of the ‘direct like-for-like’ financial exchange among private landlords and tenants who are employed, the next largest category are those who are ‘inactive’, for one reason or another.

The largest reason for landlords being inactive i.e. not in employed work, is retirement (9 out of 10), again which would directly indicate age.

As for tenants, most ‘economically inactive‘ by statistic would be retired, followed by those looking after children or someone disabled.

Private landlords lettings by economic activity - Isle of Wight Org

 

Private landlords lettings vs. the traditional way…

The way such exchanges have been known to take place over the last few decades has been via 3rd party, estate agent.

Estate or lettings agents have been preferred as the means by which a private landlord lets their property.

The service provision of an estate agent is seen as a risk reducing measure in the matter of renting a property.

Where outright financial ownership may not be enjoyed by the landlord, who might still be paying off property debt, having an agent to smooth over the handling of the rental relationship, albeit at a fee, in principal could grant much peace of mind.

The following are the key advantages to conducting private landlords lettings via estate agents:

  1. Demand…
    • the majority of private landlords are letting their properties whilst not being entirely free of secured debt arrangements and therefore any periods in which they lack occupancy, could result in defaulted credit arrangements, or at the least unplanned, adverse financial stress.
      • estate agents spend a considerable amount of budget on marketing in order to have their fingers on the pulse of tenancy demand for rented properties. Many have large databases of prospective tenants at their disposal.
  2. Presentation…
    • communicating the benefits of a house which is up for rent, both visually and by text, takes time and consideration.
      • this work has been a speciality of estate agents who put a lot of work into arranging desirable prospectuses for their client’s properties. Professional standard photography and copy writing skills can be the difference between having a stagnant marketing experience vs. a successful one.
  3. Escrow…
    • the transferral of funds between parties if not handled astutely and promptly can lead to misalignment – late or short payments, and even total default. Also, if deposits are held against any potential material damages, return of deposited sums can be affected by ‘disputes’. Many landlords and tenants prefer to know that their funds are held by a third-party, in the case of arbitration.
      • estate agents work within the deposit protection scheme which offers certain failsafes for both parties if disputes arise.
  4. Tenant liaison…
    • many landlords find it both time-consuming and quite frankly awkward to maintain ‘financial-based relations’ with tenants personally. There is sometimes a fear about becoming personally involved in the arrangement and losing out financially because of it – so the buffer of an estate agent within the loop is often attractive.
      • estate agents take the time to fulfil on-boarding with new tenants, conduct inventory checks before and after commencement of tenure etc. this leaves landlords to strictly operate within the domain of decision-making, in an absentee-owner sense.
  5. Referencing
    • judgment calls on which tenants to house and which to refuse have been largely dictated by automated computerised credit checks in recent years. This offers some background assurances for landlords as relating to their renters.
      • estate agents use the likes of Equifax and Experian to make centralised financial sturdiness assessments on prospective tenants on behalf of their landlord clients. Such assessments give indication as to how consistent prospective tenants have been in paying their bills to date.
  6. Legalities…
    • drafting business paperwork is always a bit of a bore, but where establishing agreement is concerned it is critical to declare terms and conditions.
      • templated contracts which cover the basics, yet are customised for individual circumstances are produced & held in store by estate agents.
  7. Maintenance…
    • whilst most private landlords are not property maintenance experts, the ability to deal with practical problems following call outs would therefore be lacking. Managing relationships with a property management contractor requires even further time commitment, which might just not be feasible.
      • many estate agents include within their client arrangements with private landlords, all-inclusive property maintenance clauses.

Private landlords lettings 2.0

With the advent of personal digital technology, many private landlords are taking the plunge into the DIY approach of letting their property.

Most of the advantages gained by using estate agents as listed above can be directly solved, if not greatly eased by simple digital IT tools…and where technology provides no answer, goodwill competently fills the gap.

Top 10 tips for starting up your own private landlords lettings enterprise?

For the cost of what most already have in their possession, a relative private lettings novice can get up and running almost instantaneously.

  1. Digital camera
    • take some HD snaps of the interior and exterior of your property
  2. Smart phone
    • remain responsive to digital communications whilst on the go
  3. Laptop/Tablet
    • a hub for all of your documentation related to your lettings business
  4. Website & Google My Business listing
    • an online shop front for promoting your rental property
  5. Facebook/Twitter/LinkedIn
    • gather many private contacts with prospective tenants in your catchment area
  6. Call tracking
    • track & separate out marketing and maintenance calls, plus recording them for review
  7. Web mail like Gmail
    • use an integrated communications approach with your email as anchor
  8. All-In-One (cloud based) CRM
    • a simple online CRM will help you keep on top of all your scheduled commitments
  9. Hyper-local advertising e.g. Wightbay account
    • Wightbay.com and other hyperlocal advertising sites can extend your reach to prospects, for a cost
  10. Local contractor contact details
    • keep good relations with some trusted local tradesmen for handling both routine and emergency maintenance issues

If you have the time and inclination to have a hands on approach to private landlords lettings, then you may find handling your obligations, first hand, a very rewarding experience. The relationships with tenants over time can be a truly undeniable benefit.

If you enjoy helping people establish a place they can call home and don’t mind the leg work of contacting personal referees, handling check-out and taking inventory yourself, then potentially, you have so much to gain.

Where are the greatest gains made in private landlords lettings?

If you are still undecided about whether to be a private landlord or to use a letting agent, consider a skills-trade arrangement.

Do you have some renovation projects in mind for your property, but lack the funds?

Why not arrange with a qualified tradesman who is in need of a renting a property to fix it up as they live in it for a heavily discounted rental figure, or even free of charge.

In many ways this could work out far more profitably than a standard rental agreement.

Your thoughts, please…

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This post was written by isleofwight

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