I have a 2 bed flat in Glasgow and have decent tenants who pay rent on time. The flat is renting out for £780 but similar flats in the same area are generally £900 - £950. I sent a notice to increase the rent to £830, still quite a bit under market value.
Due to this they are demanding double glazing. Bear in mind the EPC is a C. Now I realise single glazing is old fashioned but the windows are actually in decent condition but they are now complaining of condensation.
Should I just bite the bullet and get it done? Is double glazing tax deductible?
It is quite a hard financial hit as this is my only property and it will take at least two years of rent to recoup.
I should add that the single glazing was never an issue to them for the last few years.
They’re probably doing it in retaliation, as if you don’t do it, they can take you to tribunal for the rent increase and claim that the property has been poorly maintained. Either way, I’d get it done, yes it’s going to cost money, but surely you’ll be adding that money on the resale value of the property? You may need to get permission from a freeholder. In some cases they won’t allow you to replace the windows as they’ll look different to all of the other flats in a block, so that would work in your favour if you really don’t want to replace them.
If you claim them as an expense against rental income, then you won’t be able to claim for them against capital gains tax if you sell on the property. Normally, an expense such like this is used against the resale of the property.
no … but then the overall expense will be greater so business wise it makes sense to do it all at once. If it doesn’t wipe out your entire profit from this business year, you can carry over the loss to offset it against tax next year. That way, you won’t actually pay anything for it because the money you spend you would have paid in tax anyway… and you end up with a more valuable property. Upgrading windows is a revenue expense not a capital expense.
Bear in mind that if you do get the whole house done, they will be severely inconvenienced for at least a day and you’ll quite possibly need to do some redecoration afterwards which may be inconvenient too.
You said it is a flat… will you need to consult the building owner to get permission to to this?
three reasons: 1) you have more bargaining power to drive down a quote when you do more work at once, 2) everything is always cheaper now than it will be in the future, 3) your money is worth more now than it will be in the future
I didn’t say you’d need to redecorate, I said it’s quite possible. I don’t know the standard of decor of the flat nor its construction. Plastic trim won’t work on my own home unless you want it 6 inches wide all round such is the feeble nature of the plasterwork on our place. YMMV of course.
I think this is an important learning opportunity for those that are kind enough and or able to offer below market rents. It can come back to bite you .
However I’ve come to the conclusion this is the reality of society today . Entitled and thankless .
If you don’t want to do it, and the existing windows are ok, don’t do it.
Educate them on the causes of condensation - ie excess moisture / lack of ventilation etc. ie. Do they wipe down the moisture, open windows regularly, and are they heating property properly to avoid cold areas where condensation will settle.
They rented a house with single glazed, so should expect condensation. Its likely not a property fault.
Tbh they are behaving just like any other consumers for any other good or service - faced with a price increase they want to get something extra for it and it never harms to ask. You would do the same
The fact you think you have underpriced originally or face increased costs doesn’t mean anything from their perspective and unclear from OP whether /how you have justified increase to them. You are proposing a 6.4% increase so well above inflation.
Whether you choose to upgrade any facilities and then charge more accordingly is for you to decide but definitely worth telling the tenants what extra you propose to charge per month to cover the costs and then see if they still want to have the double glazing or not.
Tenant wanted the property as is. Original rent as is rent increase well within acceptable limits, but double-glazing is regarded as normal. Condensation will still occur with or without DG as it’s often the result of not opening windows - cold outside, warm inside, cooking, breathing, etc. A demanding set of tenants or a reasonable request may come down to the cost of keeping warm plus rent - a C rated house is high for below market rent.