Step by Step Letting Guide for Blue Force Property Management Service
Tenant Find Stage
If you are not going to be living in your property and using the Blueforces Property Management Service, we will aim to provide you with final fitting out costs between exchange and completion. Fitting out work will be instructed as soon after completion as possible. A Blueforces Regional Liaison Officer (RLO) or local letting agent will, where possible, market your property 2 weeks prior to completion or as soon as is practically possible. Prospective tenants cannot view your property until after legal completion has taken place.
In order to manage your property Blueforces will operate a Property Management Account (PMA). The purpose of the PMA is to keep the payment of your ongoing property costs separate from your day to day personal banking and more importantly enable Blueforces to manage your property on your behalf. So rather than you having to regularly liaise with local letting agents and tenants, having to organise and co-ordinate property checks and repairs and having to pay monthly and annual bills on demand, Blueforces do all of this for you. Following completion your PMA should be credited with an initial surplus balance equal to 2 months expected rent. This is to provide an immediate safety net for you during any future periods without tenants.
Blueforces will chase to ensure your property is actively marketed until it is let. You will continue to pay your monthly mortgage payments from your own personal bank account, until Blueforces advise you that you can stop.
Property Let Stage
Once tenants have been found, they will be vetted by reference and credit checks. If the checks are satisfactory, a move in date will be established. The RLO or local agent will carry out the ‘march in’, complete an inventory check, secure signed tenancy agreements and ensure the tenants pay an upfront deposit. All tenant deposits are held in a government-authorised scheme. There are 3 different schemes available. The Fee you will have to pay depends on the scheme that the RLO or local letting agent uses at that time. We will include an estimated annual cost of the tenancy deposit scheme in your future scheme contribution reviews.
Once the rent is being collected, Blueforces will replace your mortgage and mortgage related protection direct debits with new ones which are paid via your PMA. You can then cancel these direct debits from your own personal bank account. Blueforces will set up your pre-signed standing order mandate as you will need to start paying your monthly top-up contribution.
Ongoing Property Management
Blueforces aim to undertake annual PMA reviews (more frequently if there are significant changes to rent or mortgage interest rates etc) to make sure you have sufficient funds in your PMA to pay all the bills and expenses as this is the only way that we can effectively manage your property for you. All funds that remain in your PMA, earn you a reduction in management fees comparable to interest you would receive in a deposit account, and should your property remain continuously let, you will not be incurring re-let and inventory fees and nor will any unlet fund be reduced. So your PMA balance will increase and will be taken into account when the next review is made and this could lead to a reduction in your scheme contribution.
Regular property inspections and inventory checks will be carried out, tenants ‘marched in and marched out’ and new tenants found and vetted as required.
Blueforces will aim to let your property as soon possible and aim to re-let your property as soon as possible should tenants decide not to stay on. Periods without tenants cannot be guaranteed not to happen, which is why Blueforces get you to plan financially for unlet periods. If you do not have sufficient funds in your PMA during unlet periods, you may need to make your own property payments (including your monthly mortgage payments) until Blueforces instruct you otherwise.
To ensure your property can attract the highest rental income possible, your property will require maintenance works and your property may need repairs carried out. With a new build property, repairs are often covered under the initial 2 year builder warranty. Part of your monthly top-up scheme contribution to your PMA will build funds to cover future property repairs and maintenance.
Blueforces review your top-up scheme contributions periodically and will send you quarterly PMA statements. If you are serving overseas for longer than 6 months, Blueforces will assist you with the Inland Revenue Non Resident Landlord (NRL1) income tax exemption form.
Each tax year, you will be required to complete an annual self assessment tax return regardless of whether you have made a taxable profit from your rental income, unless you have been instructed otherwise by H M Revenue and Customs. Blueforces will complete the Land and Property section of your annual tax return, free of charge as part of the Blue Force Property Management Service.
Blue Force Property Ltd – Management Fees
Monthly Management Fee As quoted depending on property location and local letting agent (typically 9.95% of monthly rent)
Initial Let Fee 50% of 1 month’s rent
Extended Lease on Statutory Notice No fee
Re-Let Fee – 12 Month Tenancy 35% of 1 month’s rent
Re-Let Fee – 6 Month Tenancy 25% of 1 month’s rent
Property Related Insurances, Tests and Certificates
Rent Protection Insurance As quoted
Landlords Buildings Insurance As quoted
Landlords Contents Insurance As quoted
Gas Safety Certificate As quoted (typically £75.00pa)
Electrical Safety Test As quoted
Energy Performance Certificate (from 1st October 2008) As quoted
Other
Tenant Deposit Scheme Fee As quoted
Inventory Checks As quoted
Land and Property Section of Self Assessment Tax Return Property Single Owner – No fee Property Co-Owners – No fee
Full Self Assessment Tax Return – Basic Property Single Owner – £100.00 Property Co-Owners – £150.00
Full Self Assessment Tax Return – Complex Property Single Owner – to be quoted Property Co-Owners – to be quoted
All fees correct as of 25/06/08 All fees are subject to VAT currently @ 17.5%