We’ve been meeting a lot of first time investors over the past 2 months so we thought we’d put together a piece on what we see as good hints to being the best (and most successful/profitable) landlord you can be! In most cases you’ll use a professional property manager to help things run smoothly with your investment and the below tips are a given, but if you’re out there managing property on your own, make sure you do these!!
1. Screen tenants.
Don’t rent to anyone before checking their, credit history, references and background. Haphazard screening and tenant selection too often results in problems — a tenant who pays the rent late or not at all, trashes your place, or lets undesirable friends move in. Use a written rental application to properly screen your tenants.
2. Get all the important terms of the tenancy in writing.
Start with a standard lease available online (gov.co.uk), and customise it to include terms are important to the building. Use these basic documents as the framework for your own lease. Add in any special rules you have for the property, such will you allow pets?. Use as much detail as possible and include everything from late payment fees to maintenance responsibility and tenant’s behavior. A clear cut lease will reduce friction between you and your tenant in the future.
3. Handle security deposits correctly.
Establish a clear, fair system of setting, collecting holding, and returning security deposits (google Tenancy Deposit Schemes, there are a few you can choose from).
4. Treat your investment property like a business.
Many landlords underestimate the effort it takes to manage their property and I believe this is largely because they don’t see their property as a business. In other words, they treat their investing like a hobby. However, when you treat your rental properties with the respect, systems, and organisation that you would treat any other business venture, amazing things can happen.
5. Make Repairs.
(One we can all relate to!!) When a tenant calls with repairs, set up a time to come and inspect the damage. If the repair doesn’t fall into the emergency category, set up a time that works best for the tenant.
6. Keep your property safe.
Don’t let your tenants and property be easy marks for a criminal. Assess your property’s security and take reasonable steps to protect it.
7. Know the laws.
The UK has laws and acts that cover rent, security deposits, landlord and tenant obligations, tenant’s rights, and evictions. You can find out all you need to know from https://www.gov.uk/browse/housing-local-services. Get to know these laws well. Violating a tenant’s rights will, at the very least, lead to an unhappy tenant, and at worst, land you in civil court.
8. Respect your tenants’ privacy.
Notify your tenants whenever you plan to enter their rental unit, and provide as much notice as possible, at least 24 hours or the minimum amount.
9. Disclose environmental hazards such as lead.
If there’s a hazard such as lead or mold on the property, tell your tenants. In many cases, such a lead, you many be legally obligated. Landlords are increasingly being held liable for tenant health problems resulting from exposure to environmental toxins in the rental premises.
10. Purchase insurance.
Purchase enough liability and other property insurance. A well designed insurance program can protect you from lawsuits by tenants for injuries or discrimination and from losses to your rental property caused by everything from fire and storms to burglary and vandalism.
11. Resolve disputes.
Try to resolve disputes with your tenants without solicitors and courts. If you have a conflict with a tenant over rent, deposits, repairs, your access to the rental unit, noise, or some other issue that doesn’t immediately warrant an eviction, meet with the tenant to see if the problem can be resolved informally
12. Keep Lines of Communication Open.
Tenants feel more at ease when they know how to get in touch with their landlord.
13. Get Help.
Whether it’s the phone number for a plumber, help dealing with a tough eviction, or just reassurance that you are doing the right (or wrong) thing, reach out to other landlords for help. In London particularly (as we’re one of the biggest cities for rentals on the planet!) the most reliable resource is word of mouth from friends and family. Ask real estate agents, other landlords, handyman, etc, what their opinions and recommendations are.
14. Trust Your Instinct.
If something doesn’t feel right, a seedy tenant, seedy property manager, etc. Don’t do business with that party or person.
15. Use a Property Manager!
But choose carefully. If a manager commits a crime or is incompetent, you may be held financially responsible. Do a thorough background check and make sure their role in your investment plan is clearly defined. Good property managers are often the difference between a great investment for you and a poor one!
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