Fire safety advice for landlords
- 3 December 2014
- Tips for Landlords
In 2012 to 2013 the fire and rescue service attended 192,600 fires. More than a third of the fires which were in…Read More
Private landlords have a difficult job, let there be no doubt about it. They require organisation, skill, patience, business acumen, and a good amount of luck – and those are just those who succeed.
Each year, thousands more people decide to rent out their homes, many with little or no knowledge about the difficulties private landlords will face. So how can you be better prepared for success in the private sector? Well, you can start by making sure you don’t commit any of these mistakes, so common with private landlords.
Confusing a ‘cheap’ deal, with a good one.
That property down the road has just gone on the market. It looks the same as yours from the outside but it’s on the market for far less – don’t buy it. In this situation, the first thing you need to be doing is research – is the building up to code, does it have damp or mould – find out why the house is so cheap. Thoroughly researching a property will never be a bad thing, and it may save you from a deal which seems fantastic but ends up costing you a lot of money.
Thinking that you can sit back and watch the rent roll in.
Renting requires time and commitment – if you don’t have those to invest then steer clear. Rental properties aren’t simply an easy revenue stream, they are an investment which require a huge amount of work.
Underestimating repair costs and keeping the property up to standard.
The repairs in rental homes will start to add up. Carpets need to be replaced every five years and the house may need to be repainted after every tenant. With these minor repairs and other common issues such as wood rot or damp can set you back a fair way. Plan in advance – ensure that you keep a cash surplus in order to deal with any major repair issues.
Not treating your rental property like a business
A rental property is a business – pure and simple. It does seem, however, that with the lack of preparedness of many new private landlords, that they seem to view it as a hobby. Ensure that you are fully prepared beforehand. Hire a good accountant who will help you to sort out your books, and invest in a good property manager, to ensure your property keeps the pace with the rental market. In the same vein, it is also important to remember that, like any business, there may be lulls in the market when the property isn’t let. Create a plan for this.
Not developing a relationship with your tenant
Developing a relationship with your tenant requires minimal effort on your part but can genuinely help your rental process. Being able to talk to a familiar face should any issues arise will always be easier once your tenant can put a face to a name. By the same token, don’t neglect your tenants – should something go wrong, there are many cases in which landlords can be sued.
Not reviewing rents regularly
Always ensure that your rent keeps on message with that of the wider market. It is always better to increase the rent regularly, little by little (with the knowledge of your tenant) than in one big lump sum, which may lead to the tenant seeking legal aid.
Not doing adequate checks on tenants
There is no excuse for not doing background checks on tenants. If they have any black spots in their credit history, or a history of not paying rent, then it is on you to find out. Similarly, if you are renting to a friend, ensure that they sign a rental agreement – a handshake isn’t enough.
Signing the right contract
There are multiple different rental agreements you can sign in the UK, ensure you sign the right one to fulfil all your rental needs. By the same token, if you would like to add anything to the contract, like late fees for instance, ensure that they are added and that the tenant understands them fully.
Not enforcing lease terms
If you have spoken about the terms of the lease with a tenant before they have moved in, then there is no excuse not to enforce them. Tenants who become in arrears are very likely to get back to paying their regular rent – however convincing they sound. Start eviction proceedings against them – if they do manage the rectify their financial issues, then the eviction notice can always be cancelled.
Not fully reading/understanding an agency contract
If using an agency, ensure that you fully read and understand the contract before you sign it. Many agencies will charge arbitrary fees, like a ‘tenancy renewal fee’ which may catch you by surprise. Don’t let it! If you read the contract fully before hand, you can challenge these fees with your agency.
Forgetting to secure a deposit
A deposit is a vital part of any new tenancy agreement. They can be securely kept, and can act as a buffer against damage and non-payment of rent. Similarly, if you are letting to younger adults or students, finding a guarantor is always a good idea. Should something go wrong and they not be able to pay – the guarantor is then responsible for your payment.
In all, it can be seen that by taking care, researching your property investment and treating your rental like a business, private landlords really can be successful in the private rental market.