As London prepares for the biggest sporting event on Earth, the 2012 Summer Olympic Games, thousands of landlords are preparing to rent out their properties in the Capital with the hopes of making a small fortune during the sporting event. 

Recent statistics from FindaProperty.com has discovered that rental prices in numerous Olympic boroughs have grown 35 times higher their usual price during the Games with areas such as Greenwich, host of the 2012 Olympics’ equestrian events affording asking prices many times higher than the current market rate while an increase in advertised rental properties in Windsor, near to the Olympic rowing competitions has also emerged.

James Davis CEO of leading lettings agency, Upad comments,

“The lettings market surrounding the Olympics is quite simply huge. From the 27th July until the 12th August 2012, London will be awash with tourists, athletes and international press all in need of accommodation. Whilst hotels are expecting a boom in occupancy levels, more and more visitors have expressed interest in staying in private accommodation. landlords and indeed homeowners should be able to command a hefty sum, £2,000 a week for a London letting over the 16 day period, maybe even more. Of course, this sum differs depending on the property and location but nevertheless, there is money to be made.”

For those contemplating letting their properties during the 2012 Games, the team at Upad who have recently launched a new dedicated Olympic lettings service for £250 + VAT, have some top tips on letting Olympic property.

Letting Vs Subletting

1. If you don’t own the property you’re thinking of letting, then stop now. Your agreement with your landlord will preclude you sub-letting and invalidate the tenancy agreement.

2. If you’re thinking of sub-letting a council flat then your local council and all tax payers will throw the book at you. You may lose your home and will be prosecuted. Don’t do it.

3. If your parents own the property, ensure that you discuss this with them first and just make sure you clean up afterwards.
 

4. If you own the property and are currently letting it to tenants, then you shouldn’t terminate your existing rental agreement for 2 weeks of higher rent. It’s bad business and very rude, almost Dickensian. Good quality long-term tenants are worth their weight in gold and you may live to regret your decision.

5. If you own the property and live in it yourself, or you are a landlord specializing in short lets then you may have good cause to let it out over the Games.

Earning potential

1 Unfortunately there is no rate card for property during the games. Like concert tickets, some may be willing to pay well above the odds, but that doesn’t include much of the population.

2 Like standard lettings, centrally located properties, close (waking distance) from public transport will do well. Keep in mind that these guests will be expecting hotel standard accommodation. Properties let to holiday makers year round are typically uncluttered with top-end robust fitting and furnishings. You won’t get top dollar for your dark, musty student digs.
 

3 As a rule of thumb, you should be looking at 2-3x the standard rental value of the house. There will be an additional multiplier depending on how close you are to Olympic events.

4 A typical 3 bedroom property in Shoreditch would let for £600-£800 PW. During the Olympics this would multiply to circa £2,000/week. Shoreditch is a desirable area for tourists and is convenient to the Olympic Park so you could expect to achieve around £3,000/week. If one party takes it for two weeks or more, you might want to discount to roughly £5,500 for the fortnight.

5 There’s still a while until the Olympics, so in the short term you can afford to be bullish on pricing.
 

6 Certain councils insist you must apply for planning permission for lets under 90 days. These councils are Southwark, Tower Hamlets, Islington, Kensington and Chelsea, Westminster and Camden.

7 It is a legal requirement to have both a Gas Safety Certificate for the property and your electrical appliances tested. If you require a Gas Safety Certificate you can instruct one with Upad.

Potential pitfalls

1 You’ll need to inform your insurance company. All policies are different and some will have clauses allowing you to let the property out for a limited time per year. Others won’t. You may face a revised policy estimate, but that’s better than facing a court case or losing your home should someone fall down your stairs or burn the place down.
 

2 You should inform your mortgage company. You’ll need to take a view on this given many lenders are trying to push rates up at the moment and will use this as a reason to do so. Many homeowners will take a calculated risk on this one.

3 Have you thought about tax? If you already complete a self-assessment then it’s simple to add in the extra income. You can even offset your expenses such as agency costs. If you need to change your tax habits for one lump sum you may want to reconsider. Many owners will be tempted to transact in cash. I can’t say it’s the right thing to do, but it will certainly make it a challenge to secure a deposit on the booking.

4 You won’t be able to reference your guests so you’re taking a risk on their quality. Don’t forget that your possessions are still in the property.

How to do it

1. De-clutter the property. You’ll need to find a lockable space (closet) to store any valuables, and you should clear out some space for clothes etc. You should put a deposit on the property equal to roughly 10-20% of the rental amount, and it’s a good idea to add a cleaning surcharge.
 

2. Find a specialist to help you such as Upad that will ensure your property is advertised on professional sites such as Rightmove, FindaProperty and Zoopla and many more property websites for as long as it takes to secure your guests.

3. Maximise your rental income potential by presenting your property in its best possible lights. Upad can arrange a professional photographer to visit and shoot a property for just £85 + VAT or for £130 + VAT if you would also like a floorplan, which is extremely useful to anyone making a decision on your property offer.

Upad is one of the UKs largest and fastest growing letting agencies. Last year alone, 107,000 tenants asked them for help finding a home. Upad specialise in helping professional tenants rent properties from landlords directly.

Upad’s new dedicated Olympic lettings service is just £250 + VAT. They list Olympic properties on all the UKs largest property websites including Rightmove etc, and then introduce tenants to landlords directly, supporting landlords every step of the way. The service is fully guaranteed.
 

While a recent report from SpareRoom.co.uk discovered that 87% of 1,000 landlords surveyed who accept housing benefit tenants have had problems with rent not being paid on time, with 11% saying they have had tenants who stopped paying their rent altogether, it seems that not all landlords hold negativity towards Local Housing Allowance (LHA) tenants, with James Davis, CEO of innovative lettings agency Upad explaining why he believes housing benefit tenants are more friend than foe.

The poll from SpareRoom.co.uk revealed that almost 6 out of 10 landlords (59%) refuse to accept anyone on benefits, often stating ‘no housing benefit tenants’ in their adverts with nearly 30% highlighting that non-benefit tenants were more reliable. Additionally, 47% explained that they did not want the hassle of dealing with payment problems as the main reason for their reluctance towards renting to LHA tenants.

James Davis, himself a landlord for 14 years, comments,

“I am a big fan of LHA tenants! While I understand the concerns surrounding renting property to those on housing benefit, I make a point of actually selecting LHA tenants to reside in my homes. The reason this sector gets a bad name is due to a real lack of understanding by landlords. Give me a LHA family any day!”

In contrast to the SpareRoom.co.uk report, Davis believes that LHA tenants are the best of the bunch, outlining 3 main reasons he prefers renting to this group:

1. Longevity

“LHA tenancies last twice as long as private tenants, meaning that I have lower void periods and a lot less hassle. The shortest tenancy I’ve had was for 5 years, in fact, most of my properties still hold the same LHA tenants that moved in 8 – 10 years ago when I first entered the sector.”

2. Care

“LHA families in my opinion look after properties far more than young professionals who tend to see the property as a place to crash. LHA tenants tend to view their property as a ‘home’ for their families meaning they will take far better care of the property.”

3. Money spinner

“LHA rents, if you do your due diligence, can earn you more than private rents. In addition, due to the current economic climate, there is an extortionate level of tenant demand in this market, so landlords can very much afford to be choosey in selecting the very best tenants.”

Furthermore, Davis believes that a lot of the issues raised by landlords when it comes to housing benefit tenants can be easily mitigated away as long as they know how to do it, revealing 6 top tips for eliminating landlord concerns.
 
 
1. Get a ‘letter of authorisation’ so you can speak to your Council about their claim.

2. Speak to your Council before signing an agreement. Is the family on full housing benefit? Have there been claims or issues in the past? Confirm they qualify for the number of bedrooms in your property.

3. Get rents paid directly to you (very possible if tenants have defaulted in the past).

4. Only take on families looking for 2 or 3 bed properties to minimise any potential hassle (singletons move far more frequently).

5. Take out rent guarantee insurance – just in case.

6. Educate yourself on this sector; it does come with a health warning! It’s not for the faint hearted.
 

With over 650 properties currently available and over 20,000 tenant enquiries each month Upad are already the equivalent size of 20 average high street lettings agent offices. Upad finds fully-referenced tenants, and allows landlords to show them around themselves all for a one off fee of £99 + VAT.

For more information please contact lettings experts Upad, on 0333 240 1220 or visit www.upad.co.uk.