12 Things Every Landlord Must Know
This guide shares the top twelve things that every landlord, regardless of the size of their portfolio, needs to know and understand.
1. Choose your agent very carefully
This is probably your biggest and most important decision. Look at the agent’s track record and ask to speak with landlords they work with. Don’t be shy about asking what qualifications they have, which industry organisations they are members of and ask to see copies of their insurance policies if needed.
Above all, choose an agent with experience, professionalism and one you feel you can have a positive and mutually beneficial working relationship with.
2. Price your property competitively
In order to secure the best tenant you need to ideally have several applicants interested. Good quality applicants look for “a good deal”, or “value for money”. They don’t say to themselves, “I want to spend every penny I possibly can on renting a property.” No one thinks like that.
Rents are already higher than ever, so whatever you get can already be considered as “very good”
3. Stay on the right side of the law
Pay attention to the legal side of the business, and it is a business. The industry is becoming very heavily regulated and getting even small things that go wrong can come back to haunt you and cost you, so it is vital you are aware and well informed.
Be ready for unexpected costs.
4. Budget for unexpected expenditure on the property as well as for void periods A good idea is to have a separate bank account where money towards maintenance and improvements is saved. Landlords who do not have the finances in place to survive void periods tend to struggle and are under more pressure to let without properly vetting tenants.
5. Get Covered Seriously consider taking out landlord insurance. This will typically include rent protection and legal protection. Rent protection will pay rent when the tenant defaults and a good legal protection policy covers you against virtually any legal dispute with your tenant. In our experience this is often money very well spent.
6. Take out a Homecare policy Besides the assurance of one cost per year covering parts and labour, you can be assured of a prompt response at all times of year. Independent contractors are often in high demand when the weather turns cold and might not be able to attend for several days, or even weeks! A cold tenant is a very dissatisfied tenant, and the compensation claims soon come flooding in.
7. Use Gas and Electric Experts When getting your gas and electric safety checks done, try to use a company which specialises in testing only. This is usually better than choosing a company whose main income is derived from carrying out repairs and replacement.
8. Meet your Tenants in person
This is a very important tip! Try to meet your tenant before signing on the dotted line. It’s important that you feel comfortable with the long-term relationship you are about to embark upon.
9. Cheap is Rarely Cheerful When carrying out repairs/refurbishments, don’t go for the cheapest options. Poor quality materials usually have a short lifespan and will cost you more in repairs and early replacement later on. It’s usually more economical to go for better quality materials that will last considerably longer and prove a wiser investment.
10. Protect your Money When instructing an agent to represent you, check that they have Client Money Protection insurance. If things go wrong and your agent can’t or won’t pass on your rent to you, you could end up losing that money without this vital insurance.
11. Take time to understand your Tenancy Agreement Read the tenancy agreement early on. Check that it is appropriate to your property and your circumstances. If you have any questions a good letting agent will have no issue in answering them and being fully transparent.
12. Choose Legal Advice Wisely If engaging a lawyer for legal advice, ensure that they have in-depth knowledge of this very specialised industry. Over the years we’ve heard stories of solicitors taking clients’ money claiming to know what they are doing and then going on to make a mess of it. This can be a very frustrating and expensive experience for the landlord and is one that can be avoided by doing some research and recommendations.
Thanks for reading and if you have any other property related questions please don’t hesitate to get in touch with us – we’d love to help you.