Not all tenants behave well.  Are there any circumstances under which you, the landlord, can be held liable for things done by your tenant?

When one person can be liable for the acts of another

In the vast majority of cases you can’t be held liable for the actions of someone else and where this does happen it is very much the exception and special rules will apply.

For example many years ago husbands were liable for the debts of their wives!  But not any more …

We will be taking a look at the fairly rare circumstances where you can be liable for the actions of someone else – in particular your tenants – in this article.

General situations when you can be held responsible

The general rule is that this is only going to happen if:

• you have assumed responsibility for the person, or

• the other person is your accessory, employee or agent.

So, for example:

• Prison officers failing to supervise offenders properly who then cause damage to property, and

• Parents allowing their child’s harmful actions

What about the other situations referred to?

• Accessory means accessory to a crime, and you may be liable as a secondary party and be punished as if you were the principal, if you foresaw the possibility that the principal defendant (for example in a criminal prosecution) might act as he did but did nothing about it

• Vicarious liability is where an employee can be held liable for the actions of his employee where his employee was acting in the course of his employment.

• In agency law a principal is liable for the acts of his agent – this is explained in our  Legal Basics course on agency law.

Lets now take a look at the law specifically as regards landlords. 

Starting with landlords liability in civil law (see  an explanation of the difference between civil and criminal law here)

Landlord liability for the acts of their tenants

The Defective Premises Act 1972

According to section 4(1) of the Defective Premises Act 1972, a landlord may be liable for an injury to visitors of the property if it is caused by defective workmanship of a contractor.

A landlord cannot escape liability by deflecting the claim to third parties. However the landlord may be able to seek a contribution or indemnity from contractors.

Private Nuisance and Negligence

These are both ‘torts’ or civil wrongs (discussed in our  Legal Basics course on Tort).

A neighbour of a property who suffers due to a tenants nuisance behaviour may perhaps have a claim (if they own the neighbouring property or have a legal tenancy) if the nuisance ‘gave rise to an unlawful interference with the enjoyment or use of their land’.

However in most cases the neighbours’ claim will be against the tenants causing the nuisance, not their landlord.

Unless the landlord authorised (expressly or impliedly) the nuisance acts carried out by the tenant.

Although this may be a hard thing for the neighbour to prove.

Some case law

Malzy v Eichholz, [2016]

In this case, Lord Cozens-Hardy MR stated that a landlord would not be held accountable for a tenant’s nuisance

“merely because he knows of what is being done and does not take steps to prevent what is being done. There must be something which can fairly amount to his doing the acts complained of … by actual participation by himself”

Coventry v. Lawrence (No.2) [2014]

This is the leading case and actually involved a motorsports stadium and is not a  residential landlord situation.  However the principles still apply.

The Supreme Court held that the landlord was not liable for the tenants’ nuisance by determining the following:

• At the time of the letting, was the nuisance an inevitable, or nearly certain, consequence of the letting?

Despite the landlord having actual knowledge of the tenants’ use of the land, this was not enough to make the landlord liable as a consequence of the letting. It was not inevitable that a nuisance would arise, as the stadium and track could have been used for other purposes.

• Had the landlord participated “actively” or “directly” in the nuisance?

Although the landlord did not take any steps to mitigate the nuisance or prevent it, the court decided that the landlord’s actions did not amount to participation in the nuisance.

Southwark LBC v. Mills [1999]

This case, which was referred to in the Coventry case, was where claimants tried to bring actions in nuisance against the Council for a lack of soundproofing in a neighbouring flat.

However they were unsuccessful because, when the lease was granted, it would have been valid to have expected some reasonable amount of noise from tenants in neighbouring flats.

Therefore it was not inevitable that the noise would be excessive at the time of the letting and the landlord had not actively or directly participated.

Ribee v. Norrie [2000]

This case rather goes against the other cases as here a landlord was held liable to his neighbour, whose property was damaged by a fire caused by his tenant’s cigarette (there is a  post on the Landlord Law blog on this case here).

The reason given is that the landlord could have prohibited smoking but did not.  This case is a good reason for landlords to ban smoking in all their properties (plus it can be hard to remove the smell and smoke damage).

In summary therefore

The landlord must either participate directly in the commission of the nuisance or have authorised it in some way.

But if they have authorised it or allowed it to continue then they can be liable even if they were not the creator of the nuisance.

It is important to note though that the landlord must actually authorise the tenant to commit that nuisance, as the landlord will not be liable merely for allowing occupation of a nuisance tenant.

Furthermore, a landlord is only expected to take such steps as are reasonable, taking into account their resources. So a landlord cannot be compelled to bring an action against a tenant for breach of the tenancy agreement.

Although the Ribee case does rather go against that general rule.  Maybe it was because the claimant was an elderly lady with a ‘heroic’ spaniel? (Read the case to find out more). 

Nuisance cases regarding ‘common areas’

This is areas such as corridors and staircases.

If the common parts are controlled and possessed by the landlord, then the landlord may be deemed to be the occupier in lieu of a tenant. 

However whether a landlord actually will be found liable in any particular case will depend on its facts and there is no general rule.

Landlords liability in criminal law

It is possible for a landlord to be held accountable for the tenant’s criminal acts carried out at their premises.

For example drug misuse.  Section 8 of the Misuse of Drugs Act 1971 creates offences relating to the supply, production and possession of drugs in relation to the occupier and people who are “concerned in the management” of the property.

This could be interpreted to mean a landlord and also a letting agent or others acting on behalf of the landlord.

For a landlord to commit an offence under section 8, they need to have knowledge of the prohibited activity that is taking place on their premises, and “permit or suffer any of the following activities to take place on those premises”.

So the landlord will only be in breach of their obligations if they fail to take reasonable steps to prevent the criminal acts.

R v Viscomi [2019]

In this case (which is unreported), a landlord was notified of his tenant’s continuing sale of illicit tobacco and alcohol after raids were carried out on his property, but continued to accept rent. 

As a result, Mr Viscomi was convicted for knowingly facilitating the acquisition of criminal funds by another person, by virtue of knowing that his property was used for illegal activities.

Fly tipping

Another example of  where a landlord may be criminally liable for their tenant’s actions is as a “knowing permitter” of tenants’ fly-tipped waste. 

This will apply if the landlord could reasonably be expected to notice that the waste was accumulating in clear breach of the tenancy agreement, but did not take any action. 

This is a criminal offence under section 33(1) of the Environmental Protection Act 1990 (if the offender in question does not have an environmental permit).

The importance of regular inspections

It all comes down to the fact that landlords need to do regular inspections of properties so that they know what is happening there.  Our  Property Inspection Kit is here (for Business Level members).

If you spot any illegal activity you should tell the police, or the relevant authority if it is not something generally dealt with by the police.

If you are not sure whether it would be appropriate for you to inform the authorities, then take legal advice and keep a clear record of what that advice is (see  our guidance article here).

Other things

The article above is based on some research which I commissioned on this very tricky and difficult area of law.

However here are a few other issues which were not specifically covered by the report.

HMO Licenses

It may be worth mentioning here that many Local Authorities are anxious to make HMO landlords liable for the damage and anti-social behaviour of their tenants.

Sometimes they may go so far as to include conditions regarding this in the landlords HMO license.

Note thought that such a condition cannot be valid – and if you find that your license includes this you should ask for it to be removed.

You will be held responsible though if your tenants move in unauthorised occupiers bringing your property within scope of licensing – and if they don’t go, you will need to obtain a license.

Although if you are able to prove that the tenants were in breach of contract when allowing the unauthorised residents,  you should have a defence to any prosecution.

Long leases

You may be in difficulties if your tenants breach the terms of your lease, for example by subletting the property as a short let on Airbnb.  Or if they are found to be keeping a pet, again in breach of the terms of your lease.

In extreme cases you could even be in danger of forfeiture of your lease (although this would be very rare).

For this reason if you are renting a property let to you on a long lease, it is often a good idea to provide tenants with a copy of your lease or of the relevant parts, as an appendix to their tenancy agreement, so they will be bound by its terms.

Insurance

Similarly, there may be circumstances where your insurance company may be entitled to reject a claim if your tenants have acted in a way which is in breach of the terms of your insurance policy.

So again, providing tenants with an extract of the relevant parts and providing for them to comply with its terms may be a good idea.

Letting to new tenants

Finally, when your tenants move out it is really important that you check the property over thoroughly before re-letting.

For example if the tenants have done any unauthorised works which result in the property becoming unsafe (eg  see here) you will be responsible to the incoming tenants, for example for any injuries they may suffer as a result. 

Even though the works were unauthorised and you knew nothing about them.

This is why very short void periods are to be avoided.

In conclusion

Despite all the things we say above – the general rule is that one person cannot be held liable for what another person does.

Because in most cases it would be really unfair if they were.

So the exceptions are situations where it would not be unfair, where the landlord is culpable in some way.

So what lessons should you take away from all this?

• Choose your tenants really, really carefully

• Do regular inspections so you know what is going on in your property (and deal with any issues that arise).  And in addition, if you are a landlord –

• Be very careful who you choose to use as your letting agent.  As you ARE (usually) liable for everything that they do.

In spite of what everybody has been telling you, the service accommodation model will be extremely successful post covid lock down.

People are always sending me messages “I've always wanted to get into serviced accommodation but it seems super scary at the moment’ will you be successful, I've been doing this a while now and know what i’m talking about. There is no doubt working with the right mentors, you can be successful in this market.

Now is not the time? let me give you the caveat, first I can back my argument there are still countries out there where people cannot travel to. I know hosts in countries that have had zero bookings and haven't been able to reopen because tourism has shut them down.  

Let me point out some reasons why it will work.

Number one, you will be successful starting a serviced accommodation business now because there is less competition and I don't mean just like booking.com competition because yes hosts have quit they have had a hard March, April and May last year and decided it wasn't worth the squeeze anymore so they have given up.

But not just that, hotels are shutting down there are hotels all over the country in the world that have been closing permanently or temporarily and when a big hotel shuts down its not some small ordeal it happens for a good long while so this allows you to get into the market with less competition, less people selling short term rentals, allows you to make a few mistakes, not pricing your property properly and to grow until you become efficient enough to compete with the professionals in the same space and by the time it becomes competitive  again you should have an edge and be profitable making tons of money.

Number two, people are starting to prefer homes over hotels right now, data shows that hotels have not recovered from the the drop since coronavirus in April and air dna data has actually shown that not only has short term rental homes recovered since April but they've recovered more than normal which means that there's above average the amount of demand for homes, more people booking homes than they would have if coronavirus never would have happened.  Now this could be for a few reasons there’s travellers like contractors, medical workers that need longer term places to stay.

People are more concerned about social distancing, they don't want to share the front door of a hotel or guest house, they would rather have their own home or apartment with self check in, a regular key and their own kitchen so they can cook and do things like that instead of having to go out to eat all the time which is more socially distant, more safe and of course just general perception more footage more amenities so yes there are a lot of reasons why people have abandoned hotels since coronavirus, so take advantage of the sentiment right now and the fact that demand is higher for serviced accommodation

Number three, the economics of the strategy just absolutely makes sense.  See the business model, I call it rental arbitrage.  Where I rent a house, furnish it and then put it on booking.com for more money.  The economics of that is simple, I pay one price for the property, add furniture, make it more convenient to rent, no tenancy and then I charge more by renting it by the night, week or month.  And by doing that there's a guaranteed amount of money in the middle that I make.  More than the landlord would have made renting the conventional way.

See the landlord can collect £1,000 a month for an unfurnished property that requires you to put a deposit down and sign a year long tenancy agreement, well then I can get say £3,000 by furnishing it and breaking it up by the night or by the week.  Now It may not always make £3,000 but the point is there is always gonna be an ecosystem here where there is always more need for the short term furnished accommodation than the non furnished.

Tip for you here is to always negotiate with the landlord for the best deal.  Try to get the rent lower.  By doing so allows you to earn more and protect your profits … even if you are not the best negotiator just take the time to pick the right properties and there is always going to be room for profit.

Number 4 - if it's not apparent yet, and if I have to say it, you have me.  I've been doing this strategy for a long time now.  I love doing this business and I'm not going anywhere.  I’m having the best time of my life.  I’m out there talking to landlords, other hosts always looking for opportunities I can share with you.

If you need anything from me … reach out to me on social media. 

There are lots of reasons why you should definitely consider investing in service accommodation and capital allowances are a really big reason and a really good incentive for doing service accommodation so what are capital allowances, well they are tax free money.

When you start using a property as serviced accommodation you can claim capital allowances.  That also applies to furnished holiday property lets too. 

So once a property qualifies under the furnished holiday let criteria you can then claim capital allowances.

Roughly that's about 7 months of being live as serviced accommodation. An accountant will be able to provide a desktop survey.  But my advice would be to always invite a Capital Allowance Surveyor to inspect the property who is then able to access a more accurate saving.

It is always advisable for a capital allowance surveyor to work in conjunction with your account.

What can be included in the survey are things like kitchen items, bathroom furniture, wiring systems, fire doors, boiler and radiators.

All of these items are classed as plant and machinery used for your serviced accommodation or holiday let.  Which is really cool and can amount to quite a good saving.  A capital allowance surveyor will look at the replacement value of these items and add to your capital allowance claim.

Typically in my experience this equates to around 30-35% of the value of a property.

There is a certain amount of the capital allowance you would have acquired when you bought the property and there's a certain amount of capital allowance that you will be able to claim based on what you have spent on the property.

Now 30-35% of the value of a property is an awful lot of capital allowance

Let's use round numbers, say you have a £200,000 property you could be looking at a £70,000 capital allowance.

That means you can earn £70,000 tax-free. 

So ultimately it means the income from your furnished accommodation business could be tax free. A significant tax saving.

A lot of people say what happens if you don't use up all those capital allowances in that tax year.  That's fine they roll over, until you've used up your capital allowances, they will just keep rolling to the following tax year.

There's a lot of landlords, a lot of property owners who are sitting on literally hundreds, if not millions of pounds worth of unclaimed capital allowances.

So ultimately they can be earning that money tax-free. 

So whatever your tax rate is, the personal income tax rate is ultimately the tax you will be saving on your income.

And the other really cool part of capital allowances is that if you decide to then sell a property once you've used up your capital allowances there's no clawback, you don't have to pay that money back.

And also you could just decide to turn the property into a HMO - house of multiple occupation or you could turn it back into a buy-to-let or even move into it yourself and again there is no claw back.

Hopefully you found this post useful if you're any other questions about the capital allowances reach out to me.

By the way, I'm no expert on capital allowance. I use experts. I use a capital allowance surveyor and a qualified accountant.

Your accountant may not be ultimately qualified to do your capital allowance.  He will certainly be able to help you with claiming capital allowances on furniture and things like that. 

But you definitely need an expert who will typically go to the property and look at everything in the property in close detail as to what qualifies for capital allowance, the plant machinery in the property things that can't be done from a desk.

So definitely get a qualified capital allowance surveyor to do your capital allowance and if your surveyor comes up with drastically less than what I just said then he or she might not be the best capital land surveyor for you.  I kissed a lot of frogs and I know that there are good and bad in every single professional 

If you've got anything else that you want to know about capital allowances then tag me in this post and ask the question. I'll do my best to help you on capital allowance.

Traditionally, when we refer to the term Furnished Holiday Lettings (FHL), your mind automatically jumps to a property in a seaside location. However, there is nothing in the legislation to say that it must be by the sea, just that it must be in the EEA. The property must be furnished and let on a commercial basis with a view to profit.

In addition, during a 12-month period (usually a tax year), the property needs to be: 

• Available for let for 210 days

• Be let as a holiday let for 105 days

• Longer-term occupation is defined as a letting of more than 31 days, but not longer than 155 days

The property can be let for periods longer than 31 days at one time, but none of the days will count towards the letting condition, unless there are exceptional circumstances.

You can see how a serviced accommodation, let on a short-term basis can satisfy these rules and, if they do, the tax reliefs are favourable.

So, what are the benefits?

• Profits from an FHL are included within relevant earnings for pension purposes

• Capital Gains Tax reliefs are generally only available to trading businesses, but can be claimed if an FHL business is sold. These include:

  • Entrepreneurs' Relief

  • Rollover Relief

  • Holdover relief

  • Where FHL's are owned jointly by a husband and wife profits and losses can be allocated in whatever share is agreed as a Profit Split.

• Capital allowances can be claimed in respect of capital expenditure incurred on an FHL

What are the disadvantages?

• If your turnover exceeds the VAT registration threshold, you will need to charge VAT on the rents. Not only is this an administrative issue, it may make the property uncompetitive

• A loss incurred on an FHL business in any tax year is not available for set off against any other income or gains

• Unlike trading businesses, most FHL businesses will not qualify for Business Property Relief (BPR). So, the full value of the FHL, less any mortgage, will be within your estate for Inheritance Tax

This week on Clubhouse Emma and I disscused The Importance of Virtual Assistants

It is important for us as directors to stay focused on the highest valuable tasks in our business which means you need to get good at delegating and handing those repetitive tasks that others can do.

This is where bringing on a full time virtual assistant can be a massive boost to your productivity so I want to cover the types of things I outsource to my VA and where in the world I found the best virtual assistants and then what platform to go find these individuals

What kind of tasks do I actually hand off to our virtual assistants? I think it's important to hire full time because what that does is it forces you to go find those kinds of repetitive tasks or identify those repetitive tasks that you're doing over and over so you can hand them over to an assistant.

One of the big things for me is customer support.

Social media audits looking at social media posts identifying which posts perform well so I can go and duplicate that on another platform. So scrolling back through the past 2,3,4,5 years of our Facebook fan page to pull those snippets that are working well and turn them into other posts and promoting them on other platforms.

Add comment management. My virtual assistants manage all the comments inside of my advertisements on facebook.

Community moderation they help me out inside my forum to move the different threads that are disorganised or in the wrong place.

Almost 100 percent of our marketing is run by my virtual assistants

Email audits, pulling our open rates from the different subject lines into a spreadsheet so we can quickly see how good our emails are doing so we can look back at our history to find those subject lines I got great open rates.

Outreach research, chargeback management, area research the list goes on and on.

Sometimes I find myself in a situation that goes wrong, for example, I had something really catastrophic happen to my email database that has over 60,000 subscribers they just disappeared, based on a new website plugin.  So I made a video showing here's how to fix the problem, I sent it over to my virtual assistant and by the time I had woken up the next morning everything was back to normal

So this is massive because what it allows me to do is stay focused on things like networking, landlord negotiations and my own branding allowing me to have the finger on the pulse of the property industry keeping me abreast of what is happening now and in the future.

So those are a variety of tasks and I'm always looking at what I'm doing, and how I can hand it off to a teammate.  What can I turn into a process or procedure and then I make a quick video.  It is as simple as recording my screen as I'm doing something, sending it over and it gets done and I can stay focused on what's the next most important thing to do on my business.

Where in the world do you find VA’s.

I started hiring back in I think 2011 2012 hiring people from Africa, Eastern Europe, The United States of America, Canada, Mexico, Caribbean islands, all over Asia as well as the Philippines, Indonesia and India..

Literally the amount of people I have hired has been probably about 50 or 60 people at this point in time and for me I have found that it clicks most on many levels with teammates in the Philippines I have found that there's obviously a kind of currency conversion that is beneficial and the cost of living in the Philippines compared to here in the UK is also much lower so so there's a value there but it goes way beyond the value.

One of my last jobs I hired out I did post a job for Western European candidates and also Phillopeno candidates and I requested a simple task to be done using excel and the actual work part I got back from the individuals in the Philippines was astounding like it was so much better than what I got back from Europe that it actually maybe feel a little worried for European workers because every single applicant in the Philippines just nailed it and they actually went far beyond what I even requested which blew me away to see that kind of thoroughness inside of this first task.

Other reasons I really really like about the philippines, english is learned at a very young age and in the school system.

Their English is a very western style of English you also have the Business Processes Outsourcing industry (BPO) which has been blooming for well over a decade you might have noticed if you've ever called your bank or call up a major airline corporation all of a sudden you are speaking to someone in the Philippines right, so all these call centers have moved from many western countries and moved over to the Philippines specifically which means they have been teaching and learning about what I call the standard of customer support, customer service and a lot different types of business practices.

So culturally it is normal I mean there are so many Filipinos who work within this industry of customer support and virtual assistant work and a lot of them have had training at a corporate level which is really really quite valuable to us.

Trustworthiness is really big, loyalty is also very big too, these are cultural things.

So I have found my Filipino teammates to be of better value which allows me to pay them very well. I pay them a monthly salary whether they have 40 hours a week or not and I pay them well so they will be there each and every month for me.

I don't want them to ever start looking for other work, because now they are part of the team, my business needs their help.  And, I'm always trying to think of new things to pass off to them, that's why I choose the Philippines.

So what platform is best to hire virtual assistants?

I really think it's important for you to get yourself and your business to a point where you can actually outsource full time when you have someone there 40 hours a week, 160 hours per month it forces you to find more ways to leverage their help.

Syndication is important.

There are a lot of different ways you can leverage it and when you're paying somebody you know full time, even if it is £400 a month or £650 per month for 160 hours of work it forces you to start to think ok what's that next thing I’m going to hand over to them. 

Build up a que of work in the evening before you are done and then send it over and by the time you wake up that work product gets done, it's really extremely powerful.

So where do you find virtual assistants

fiver

Upwork

The best platform for me is

Onlinejobs.ph

Each have their pros and cons which probably should be a topic for another conversation

Hiring a virtual assistant will improve your business and your life!

If you're looking for a cheap virtual assistant, chances are you’re a solopreneur doing your first round of VA hiring.

Or maybe you’re doing your second or third round but you want to avoid prior mistakes and do things better this time around. 

You’re getting to the point in your business where:

• You're running out of personal bandwidth to make  your business grow

• You’re getting tired of doing some repetitive tasks over and over

• You could really use some help

But you don’t have that much money coming in from your business yet, and so you don’t want to spend too much money outsourcing.

You’re looking forward to a future where you’re resting easily on a Sunday afternoon knowing that your VA army is handling things for you.

You’re looking forward to being a real, honest to goodness entrepreneur that employs and manages other people, instead of just being a solopreneur.

We have limited budgets when growing our businesses but, cheap isn’t what you really want - because cheap VAs often bring with them a host of problems that will end up costing you more time than they save you money.

Don’t misunderstand - you can get incredibly useful VAs for LOW hourly rates.

But if you focus only on the hourly rate a VA charges without considering the whole picture of what working with them will be like, you’ll probably experience some “outsourcing challenges” like I’ve experienced over the past 9 or 10 years.

Trust me on this one - I’ve spent over £75,000 over the past 10 years hiring VAs.

What you’re really looking for are VAs that are going to give you an incredible bang for your buck, even if you end up paying those VAs a few more bucks per hour.

In other words, you're looking for very valuable VAs that are also affordable.

Working With Great People Will Make A Great Business

“You need a strong team, because a mediocre team gives mediocre results, no matter how well managed it is.”

- Bill Gates

There are many benefits of hiring virtual assistants. You can:

• Stop doing tasks you aren’t good at or don’t enjoy

• Spend more time on what you love doing

• Grow your business much faster than you could alone

However, if you hire poorly, you’re going to have to deal with:

• Spending a lot of time communicating with your VAs

• Wasting money on work that you can’t use

• The frustration that comes from constant micromanagement

The way you get the good stuff without dealing with the bad (too much) is by picking great people to begin with, and then giving them full-time work so that they have a “teammate” mindset instead of a “freelancer” mindset.

One thing you need to understand is that hiring is a tricky process. It’s a skill that you can develop with time, but you’ll probably have a few learning experiences along the way.

Great hiring is a mixture of emotional intelligence, having great hiring practices, and trial and error

Full-time Teammates Vs Part-Time Freelancers

Do you want to have a team of freelancers or a team of people who are committed to the success of your business?

Because when you hire full-time VAs, they view themselves as a teammate and feel attached to the success of your business.

But when you hire part-time VAs, they view themselves as freelancers. That means if another client comes along that pays slightly more, they will either prioritise that client’s work over yours or drop you all together to work for them.

Benefits of Hiring Full-Time

When you work with full-time teammates, you get a synergistic effect of 1+1=3.

However, when working with freelancers, you’re always dealing with their incentives to make more money, right now.

It’s much more effective to hire for the long term because it gets other people really committed to the success of your business.

Steps to Hire Great VAs

Choose Where You Will Find Your VA

Logistically, there are three places you should look online to hire incredibly valuable VAs that are affordable:

1. Fiverr.com. Fiverr is good for single, simple tasks, but I wouldn’t recommend using this site to find a full-time VA.

2. UpWork.com. UpWork is great - but they do charge high fees. So once you find a rockstar VA or two you’ll want to move them off the site.

3. OnlineJobs.ph. This is the only place I now hire from, all of my long-term enhance my life, reduce my stress, show up every day VAs have come from Online Jobs. 

Posting The Job Description

Don’t be fancy when describing the role you are hiring for. Just be super specific in sharing the deliverables you’ll be looking for and what skills are required to give them.

However, there is a couple of virtual assistant hiring hacks that will help you find the cream of the crop because you will receive many applications to your job posting:

Hiring Hack #1: Use An Easter Egg

Using an easter egg is one of the best ways to ensure that you’re hiring detail oriented VAs. And the beauty of the “easter egg” is that it’s so simple to execute, but oh so effective.

All you have to do is to put a key phrase somewhere in the middle of the job description that says something like: 

“At the beginning of your application, please include the phrase “I’m your next superstar VA” if you want to be considered for this position.”

Don’t bold this. Don’t make it stand out (but don’t intentionally hide it either).

Then, when you’re sorting through all the applications, you can quickly look at the top of their proposal to see if they included the easter egg or not.

If the applicant didn’t include the easter egg, DON’T HIRE THEM!

If someone can’t execute on attention to details in the job application, why would you think they will do so when they are working for you?

Hiring Hack #2: Give Them A Few Simple Tasks To Do

Asking your applicant VAs to do a few simple tasks for you is another hiring hack that will work wonders for separating the wheat from the chaff.

For example,  in the job description, you can say, “please go to 16 Personalities, take the free test there, and tell me your results.”

Another one to use: ask them to do a free English Grammar Test and to report their results (if English proficiency will be relevant to the position, which it almost always is).

If you’re hiring for a position that involves writing of any kind, you want them to have a decent score.

But honestly, the main point of these exercises is to see:

• Do the applicants actually DO these simple, quick tasks I’m asking for?

• HOW do they do the tasks? For example, with the personality test - do they just tell me “I’m an INFP” or do they link out to the full report?

Hiring Hack #3: Ask For A Short Application Video

Asking for an application video is really powerful if you only want to deal with "A Players" when it comes to outsourcing.

All you have to do is ask your applicants to shoot a quick, under 3-minute video using their cell phone or their laptop. Ask them to share a bit about themselves, why they want the position, and ask them to show you their workspace in the video.

The video is SO useful for a few reasons:

1. You get to see if they actually make the video. In my experience, between 1 in 10 and 1 in 30 applicants will actually make the video… so if they do it that’s a HUGE positive sign.

2. You get to see how authentic/honest the applicant is on camera.

3. You get to uncover their motivations - if they say something like, “I have a new kid on the way and I need money” that’s a pretty awesome sign because it shows that they’re really motivated to hustle for you and work for you in the long run.

4. You get to see their workspace. They don’t need anything fancy - but if they’re a graphic designer, and you can see they have a massive LCD screen at their workspace, that’s a better sign than if they’re working off a 13-inch laptop.

Closing Comments

If you hire smart, try to hire full time, and learn from your inevitable challenges along the way, you can scale your business beyond your efforts and get a VA that provides you incredible value for your money while also being affordable.

There have been big changes to the holiday rental sector in recent years.  For the holiday maker and  professionals alike, it’s safe to say that short-term let platforms - such as AirBnb and Booking.com - have been a bit of a game changer.

Let’s imagine it is 5 or so years ago, and you are planning to go abroad. Now you could book a B&B abroad, but only on a reliable recommendation. Usually, spending your money on a hotel seemed like the simplest and safest option. And even still, you weren’t always getting what you paid for with a hotel.  Fast forward to 2021, and with a bit of hunting on your smartphone, you can find yourself whatever kind of property you’d like. Quite often it’s cheaper than a hotel and can often add a personal touch.  For the holiday maker and professionals alike, it’s safe to say that short-term letting platforms - such as AirBnb and Booking.com - have been a bit of a game changer.

In addition to holiday makers, it’s starting to look like short-term letting might be a bit of a game changer for property owners too. HMRC have been clamping down on traditional long-term rental landlords in recent years. More and more often we are being asked about the benefits of AirBnb vs long-term-rentals. Everyone seems to have heard rumours that it could save them some tax, and most want to know if it’s worth making the switch. The answer is simple: it depends.

Between 2019 and 2020 the number of properties on AirBnb increased by 64%. 45% of landlords reported that the reason they switched to short term lets was due to the changes in mortgage interest relief.

Should you make the switch too? Well, rather than trying to persuade you one way or another, here’s what we know at present:

Income

The data on short term lets is a bit nuanced; be prepared for a few tangents. If we were to base this purely on daily income, the short-term let is the clear winner.  For instance, let’s look at London -  a saturated market. According to the Residential Landlords Association, on average short-term lets in the centre of London generate around £137 per night. A quick check of the Gov.uk reveals that the median rent in London is £1,433, working out at around £48 a night for long term rentals.  So, although it is possible, it simply isn’t feasible for everyone to have their property let out 365 days a year without a long-term rental agreement. Even if you could, all the admin/cleaning/maintenance is (at the very least) a part time job. Or you could stick with the long term let and (let’s be honest) just turn up any time something breaks. They are two very different ways of making a living.

If you look around, you’ll see quite a few short-term let management companies who promise good occupancy rates for full-time landlords. AirBnb released a report which confirmed that their average UK host earns about £3,000 a year. By comparison, private rentals earn £5,000-10,000 on average. Based on these figures, you’d be forgiven for thinking that a long-term contract might be the most profitable approach.  However, AirBnb’s figure takes into account a wide range of Landlords.

For example, let’s take a conservative daily income of £100, assume only 90-days-per-year occupancy and work with that. £100 per night, at 90 days a year yields £9,000 turnover.  In fact, you could make as low as £56 a night and still compete with the average private rental income of £5,000-10,000. Of course, the catch is that you can’t guarantee 90 people a year will book.  For this reason, it’s worth researching any available statistics in your area. As a matter of fact, some city councils are introducing restrictions. London has a 90-days-per-year occupancy cap on short-term letting, with hefty fines if you exceed the limits.

How does the tax relief differ

Tax deductible expenses

In a lot of cases the returns on short-term rentals tend to be higher.  However, it does come with more risks and more time commitment. There is also usually more maintenance too as you have tenants and guests coming and going all the time. Naturally, this means more expenditure. Regular cleaning fees, service/management charges, repairs & replacements, advertising fees and so on. Whilst these can also be incurred in a long term let, you can expect far more frequent expenditure with a short term let.

Nevertheless, the wide range of tax-deductible expenses you can claim for short-term lets can really help save on your tax.  Replacing towels, bed linens, soaps, tea, coffee, cleaning equipment…it all adds up.  Generally, these things are not supplied for long term lets, and wouldn’t be allowable. So, when it comes to the year end, and you’re looking for ways to reduce your tax bill, you’ve got far more options on where to reinvest your profits from letting.

Mortgage Interest

Whilst private rental landlords are facing on-going restrictions on mortgage interest relief (Section 24), short term lets are still able to claim tax relief on the full amount.  Of course, you would need to make sure you satisfy the criteria as being classified as a Furnished Holiday Let (see HMRC’s guidance HS253, which explores the number of days the property should be let, how many days it should be available to let, and other conditions).

Let’s look ahead and see how these Section 24 changes play out in the coming years, once the restrictions are in full effect. From April 2020 private rental landlords will be unable to deduct any mortgage interest relief, and instead will get a 20% (basic rate) tax credit.  So let’s look at how this will affect the short-term-let tax calculation.

For the purposes of this example, we’ll look at two landlords - Dr Wright who rents on 12 month contracts, and Mr Smart who has a furnished holiday let. After deducting expenses, they’ve both made £10,000 profit for the year. Both have paid £6,000 in mortgage interest.

Dr Wright is a higher rate taxpayer, and under the new Section 24 rules, she can no longer deduct any mortgage interest, leaving her with £10,000 taxable profit. Instead she uses the new tax credit and can deduct £1,200 (20% of the mortgage interest) from her £4,000 tax bill (40% of £10,000).  Dr Wright therefore has a tax bill of: (£10,000 x 40%) - £1,200 = £2,800.

Now let’s look at Mr Smart.  He is also a higher rate taxpayer. However, as there is no mortgage interest restriction on furnished holiday lets, he claims the full £6,000 of interest to reduce his taxable profit to £4,000.  Mr Smart therefore has a tax bill of: (£10,000 - £6,000) x 40% = £1,600.

So, if you compare the two tax bills, there is quite a saving there for short-term let, for higher rate taxpayers at least. We should reiterate that we’re looking ahead to April 2020 here, but even in the present day the calculation still works out in favour of short-term let properties. It is worth pointing out that some mortgage lenders see renting a property as a breach of their terms and conditions. Nationwide, for example, does not allow a property to be let on AirBnb if it’s the owner’s only residence, whereas Santander will generally allow renting whole properties for a fee. Therefore proceed with caution, and check your terms and conditions!

Selling the Property

When the time comes to sell your property, providing you sell at a profit, you may have Capital Gains Tax (CGT) to pay.  If you meet the conditions to be a Furnished Holiday Letting, there are a few different CGT reliefs available. Firstly, if you meet the conditions, you may qualify for ‘Entrepreneurs’ Relief’ which means that when you sell your property, the CGT rate will only be 10%. With higher-rate taxpayers paying 28% under normal circumstances, this is a significant saving.  Please note however, that to benefit from this relief the disposal cannot be the sale of just one business asset, but instead, it must constitute the whole or part of a business. In addition, there could be restrictions if there is “other” use of a Furnished Holiday Let. This is a complex area and advice is strongly recommended here.

Secondly, you may qualify for ‘Rollover Relief’ – if you sell off your existing AirBnb property to purchase another, you may be to defer capital gains tax on the sale of the existing property, so you don’t pay any tax at the point of the initial sale.  Please note, however, should that property fail to qualify as a Furnished Holiday Let in a period, then the rolled over gain would be restricted. 

As mentioned earlier, the Furnished Holiday Let conditions require that the property is short-let for at least 105 days per year, and is also available to let for at least 210 days per year.  If you’ve been paying attention, you’ll have figured this out already; due to London’s 90 day rule, no London properties will meet these conditions. So, if you want to qualify for this relief, don’t buy in London.

Conclusion

Whilst it can be a bit of a lottery ensuring your property can be classed as a Furnished Holiday Let, there are lots of benefits if your property does qualify.  As you have seen there are many good tax arguments in favour of short term letting, and hopefully you’ve gained some insight about the major differences. Whether AirBnB is the better route really depends on your situation. There are pro’s and con’s to both approaches. If you go the AirBnb route, you may well save tax, but you’ll likely gain a lot more potential headaches, not least local council restrictions.

Always make sure a property bought for short term rental would still be profitable with a regular tenancy. Ultimately, it’s up to you to decide whether you make the switch.  It is always highly recommended to seek tax advice from property tax advisors, such as ourselves, especially when getting into more advanced areas of the Furnished Holiday Let rules, such as IHT, stamp duty and VAT, the latter given Furnished Holiday Let income is standard rated for VAT purposes. 

Hopefully this is food for thought, and with the negative tax effects of Section 24, I expect interest in Furnished Holiday Lets to grow and grow.

When it comes to finding rent-to-rent deals.

You've got the most common strategy many people follow which is going to letting agents to find properties.

Or my best strategy is to find the vendors, the owners, the landlord's of the properties so that I can structure a deal directly with them cutting out the middleman enabling you to often create more favorable terms. 

So how to actually go about finding them?

Think about it as marketing, a marketing campaign, there are two ways you could do that.

One way is to go looking for the landlord, the other one is you can get them to come and find you, so let's talk about those two different methods.

One of the key things to consider when doing this type of marketing is why would a landlord want to deal with you, what sets you apart from the rest, because let's face it, there are a lot of us out there.

So let's first talk about you reaching out to landlords.

One of the most effective methods you can use is writing letters directly to the landlord. I say it's the most effective, it's most effective when done right.

I have hundreds of rooms around London and the Southeast that I managed, part of the management process is regularly inspecting these properties. and we get bundles of posts each month from people who directly try writing to the landlord and often they don't get a response because they are not necessarily doing it correctly so when you are reaching out to the landlord first of all know how to find them.

The easiest route is the local council, they have a list of licensed HMO’s in the area you can access which is public information. In some cases you might get the home address of the property owner, other times it will just be the address of the licensed house you are writing to.

The first thing to consider is who is going to see that message and word it accordingly.

For instance if you're writing a letter and it's being delivered to the tenants the people that are living in the house, it's very unlikely it will get picked up by the landlord the property might be managed, you might get the odd landlord that goes into the house to pick up the post but very few actual letters like that will make their way back to the landlord, It'll just be treated as junk mail.

So it's about writing to the tenants and getting the tenants on your side, incentivising them to get hold of the landlord and getting them to contact you.

It might be you are reaching out to them because you are trying to improve the quality of accommodation in the area essentially creating a reason as to why the tenant should reach out to their landlord and connect with you, so you can have a conversation.

Now also be mindful of GDPR as well, in terms of how you are using this particular data.

Sometimes when you're trying to get the home address of the owner it may not be public information so for example on Swale Borough Council register the home addresses of the property owners' are not available it's not there for public information however you are able to obtain the data via using the Freedom of Information Act.  insist that you want access to that data.  That way you can get the full register and your message can be more direct to the owner of the property.

Now when you are communicating directly with the owner of the property again you have got to think about why is it going to be you, why should they respond to your letter v’s any other kind of communication they might have had or other people that contact them. 

I have been doing this strategy for about 8 or 9 years and many many hundreds of other people have been doing this same strategy as well. 

So you've got to stand out, you've got to do something that's a little bit different.

As you can imagine I have seen many, many different types and styles of these letters over the years, some of these are two to three pages long, crazy.

What you need to be is a skilled copywriter, that skill of being able to sell in the written form which many of us are not.

Not done correctly will make your attempt at getting to the landlord ineffective.

What you need is a short sharp message and that short sharp message is something along the lines of “I'm desperately looking for a house or HMO in this particular Street, if it's something you can help me with whether you're looking or considering selling or leasing, then please reach out to me urgently’

Now something like that is an attention grabber and is much more likely to get a response, The object is to create enough curiosity for somebody to pick up the phone and call you.

So the objective and the outcome that you're looking for from this letter is simply for them to pick up the phone and call you to start the conversation you are not trying to sell them the entire rent 2 rent concept in the written form that is a mistake many many people make,

Another way to reach out directly to the landlord is to find where they are advertising for tenants, so for example they might be advertising on Gumtree they might be running adverts on spare rooms.

You can reach out to them on those platforms so your message maybe something along the lines of ‘‘would you be interested in tenants that can provide you guaranteed rent for the whole property’ or something along those lines essentially again you want to grab their attention because at this point you're not trying to sell them you, you are just trying to get their attention to start the conversation.

There are many platforms that you'll find landlords advertising for tenants, the primary one being Sparerooms, other platforms include more modern mediums like Facebook, Facebook marketplace.

So when you communicate with the landlord on these types of platforms it is for them just to start the conversation with you so that you can take it to the next step.

If you're feeling a bit uncomfortable about reaching out to landlord's in this way then another technique that you can use is to respond to the advert as if you are the tenant, what I mean by that is your responding to the advert and say you're looking to arrange to view the room and when will it be possible to view, this way what your able to do is to get in front of them and have a face-to-face conversation rather than just messaging.

Now you don't have to say that you're looking for a room for yourself you can just be clear that the room is not for you it's for somebody else, you get your foot in the door and start the conversation.

Whatever way feels more natural for you.

During my early years I went about learning the words and phraseology around this type of strategy.  It's really important to understand the concept but then make it your own so when you're speaking to the landlord, speak in a way that feels comfortable for you rather than trying to regurgitate somebody else's words.

So I've talked about how we can reach out to landlords that we're looking for directly now let's talk about how we can get the landlord's to come to us and the type of marketing we need to use there.

This is about having adverts they can respond to, so what type of adverts might there be.

First of all one of the most common and popular techniques that I found that works quite well for me is leafleting, it works quite well but the response rate is very very low.

You have to circulate big numbers, around 5000, targeted leaflet drops are more effective.

So what do I mean by targeted leaflet drops.  Let's say we pick an area of student houses we know the streets are all student houses and we're circulating leaflets in these areas looking for 3 or 4-bedroom houses to rent directly from the landlord, offering guaranteed rent and all that stuff that we use in our marketing.

That’s all well however the people that get to read our message will generally be students which means nothing to them, they will pick it up and it will go straight in the bin.

So if you're looking to get this message out there by leafleting, think about where landlords might be living.  Look for the nicer areas, suburban areas and leaflet those areas with a  slightly different message that says we're looking for four-bedroom houses desperately in whatever areas it might be.

And these landlords need to reach out to you because you have an amazing deal for them.

As we are advertising and trying to get our message out there, think about different methods of mediums that you can use for example another one I think that works quite well is postcards, posting them in shop windows or on supermarket notice boards, local shops.

You can have a postcard there advertising for a 4 bedroom house for a long term let, the response rate is low, but it’s all about the consistency of this type of marketing that produces the results.  And, of course we can go high-tech and go the other way and use the power of social media.

Think about how you can reach out to landlords.  What works really well in one area may be very different in other areas.

So you really have to test and measure these strategies rather than spending thousands of pounds on one particular strategy.  You need to test and measure and see which strategies get you a better response.

So for example if you are writing an advert on Facebook to say I'm looking for four-bedroom houses in this area providing guaranteed rent, visual images with the right written content will always get much more attention and a better response rate.

So think about the best platforms to market on, what type of visitors that platform attracts, test and try different little things, different pictures, different calls to action ect.

Again consistency is really important, you need to be posting at least 3 or 4 times a day.

It might not be right for your target market right now but it may be at some point in the future and of course there are also people that might know someone else who knows a landlord.

So, maybe in your marketing content, you might want to state that you would be more than happy to pay a referral fee for a successful instruction.  Try and be creative with your marketing techniques to increase your response rate.

I’ve been utilising these push marketing techniques for a while now and would highly recommend them.  

SA Pricing Strategies to Maximize Revenue and Boost Bookings

Effective pricing strategies are essential for lodges aiming to thrive in a competitive marketplace. By understanding guest behavior, market trends, and operational costs, lodges can tailor their pricing to attract the right customers, increase occupancy, and maximize profitability. Here are some proven strategies to help lodges strike the perfect balance between affordability and revenue generation:

1. Dynamic Pricing: Real-Time Adjustments

Dynamic pricing is a game-changer in the hospitality industry. This strategy involves adjusting room rates in real time based on factors like demand, competitor prices, local events, and seasonal trends. For instance, increase prices during peak tourist seasons or large events and lower them during slower periods to fill rooms. Using revenue management tools can help automate and optimise these adjustments.

2. Length-of-Stay Discounts

Encourage guests to stay longer by offering discounted rates for extended bookings. For example, promote deals like "Stay 3 nights and save 15%." This strategy not only increases occupancy but also reduces operational turnover costs associated with frequent check-ins and check-outs.

3. Competitor-Based Pricing

Analyze the pricing strategies of your competitors to stay competitive. Match or slightly undercut their rates for similar offerings, or highlight added value in your pricing tiers, such as complimentary free parking. This ensures that your property appeals to price-sensitive guests while emphasizing your unique advantages.

4. Value-Based Pricing

Shift the focus from price to value. Highlight the unique features of your property, such as a prime location, boutique experience, eco-friendly practices, or exclusive amenities. Guests are often willing to pay a premium for a memorable and personalized experience.

5. Psychological Pricing

Small psychological tactics can make a big impact. Use pricing that ends in ".99" or ".95" to make rates appear more affordable (e.g., £99.99 instead of £100). This subtle strategy influences customer perception and encourages bookings.

6. Seasonal and Event-Specific Pricing

Take advantage of local events and seasonal demand to optimize room rates. During peak periods like holidays, festivals, or major conferences, increase prices to match demand. Conversely, offer discounts and special packages during low seasons to attract cost-conscious travelers.

7. Non-Refundable Rate Options

Offer multiple rate tiers, including a non-refundable option at a lower price. This strategy appeals to budget-conscious travelers and secures guaranteed revenue while minimizing the risk of last-minute cancellations.

8. Early-Bird and Last-Minute Discounts

Attract planners and spontaneous travelers alike. Reward guests who book far in advance with special rates, and fill unsold rooms with last-minute discounts closer to the stay date. Promote these offers through direct booking channels to maximize profits.

9. Corporate and Group Rates

Tailor rates for corporate clients and group bookings to encourage repeat business. Offer discounts or added perks, such as flexible check-in times, to build long-term partnerships with business travelers and event organizers.

10. Geo-Targeted Pricing

Customize rates based on the geographic location of potential guests. For example, offer exclusive deals to travelers from specific regions during off-seasons or when targeting international markets.

Final Thoughts

By adopting these strategies, lodges can improve occupancy rates, optimize pricing, and ensure steady revenue growth. Success lies in understanding guest needs, leveraging data-driven insights, and continuously refining pricing strategies to stay ahead of market trends.