That’s no void periods. Ever. Then, when it comes to purchasing your next buy-to-let property, make sure it’s in an area where there is plenty of housing association accommodation.
Why? Because, depending on the local authority, there’s a good chance you could rent your property to them and they in turn would sub-let to individuals and families on the council’s homeless list. In most cases they term the property ‘emergency temporary accommodation’.
We say “depending on the local authority” because the rules for the government scheme – called Private Sector Leasing Scheme (PSLS) vary – depending on where the Housing Association properties are. And anyhow, not all councils have signed up to the scheme; for those that have there can be a waiting list for landlords – such is the demand for guaranteed rental income over a number of years (especially in the current post-recession climate).
Some authorities will take on unfurnished properties; others are prepared to bring properties which are in need of repair, up to habitable standard via a number of refurbishment means.
PSLS – Why You Should:
- But that’s not the only advantage of the PSLS. You’ll also save yourself an awful lot of time and headache in administration and other miscellaneous tasks. That’s because the housing association won’t just find you tenants, they’ll also make sure your rent is paid into your bank account at the same time every month. They can do this because it’s their name on the lease and not the tenants. This means that unlike with council tenants on benefits who get paid their housing allowance direct, there is no chance of the renting ‘going amiss.’
- The housing association ensures that at the end of the lease the tenants will have moved on and the property will be empty. This means you will never face the tiresome and costly business of having to raise an eviction court case.
- Some housing associations will even pay landlords a signing on fee – so desperate are they for accommodation in certain areas.
- Before they hand you back your property at the end of the long-term lease, the housing association will ensure your house or apartment is professionally cleaned.
- Other benefits of a PSLS include the fact that the Housing Association will take over general maintenance of the property for you. This means collecting the rent, attending to any internal repairs, booking annual gas/boiler inspections and dealing with Anti-Social Behaviour issues etc. And this is all free! Sounds too good to be true? Well, some landlords say the downside outweighs the gain…
PSLS – Why You Shouldn’t Rush In:
- Housing Association tenants who end up living in temporary emergency accommodation tend to have a lot of issues and problems. Unfortunately, the upkeep of your property isn’t one of them. Because of this some landlords say the guaranteed rent isn’t worth the cost of having to replace carpets and completely redecorate the property after tenants have moved on.
- The rent you’ll receive from the Housing Association may be regular, but it won’t be at market value, instead it will be slightly under what you could expect from a private let.
- In the majority of cases the housing association won’t guarantee the state of your carpets, walls etc and you’re usually looking at a complete house redecoration project.
- Some mortgage companies won’t lend for a PSLS lease.
- You won’t be able to sell your property – even if you’re offered twice its value – since it’s tied into the housing association lease. Before you make up your mind about whether PSLS is right for you or not, it’s worth noting that not all properties are accepted onto a scheme. Studio flats, for instance, are often considered unsuitable and so too are properties of multiple occupations. You’re more likely to get taken onto the scheme if it’s a one or two-bedroom flat you have or a family-size villa.
Housing association inspectors will also be looking for window locks, fire-resistant doors, smoke detectors, boiler checks etc before they’ll accept a property on to their books.
It’s really swings and roundabouts whether you opt for a PSLS lease – just remember you won’t be able to get off that roundabout until the end of your housing association lease.
These are just some of the topics we cover in our Masterclasses. If you would like to further educate yourself to become a professional investor then come and speak with one of our team or book yourself onto one of our next course. All our latest events are listed under our Events Calendar below.