8 mistakes landlords make and how to avoid them
Being a landlord has many benefits but the stress cannot be denied and often managing tenants can be a minefield. There are various things that can go wrong but with a little knowledge and preparation you can minimise the risk of these occurring. Whilst they may be common, generally the mistakes which landlords make can be easily fixed so we’ve created this handy guide.
- Not vetting your tenants – Nightmare tenants and rent arrears aren’t just something that happens in films. These things happen in real life and could easily happen to you so make sure you have references for all tenants. It doesn’t take long to get in contact with a tenant’s previous employer or landlord and you may soon regret it if you forget to do so.
- Overpricing the property – Renters are likely to be searching the local area so price your property competitively. Make sure you highlight any benefits of the property which may make its value slightly higher but at the end of the day, in today’s digital world, it is now easier than ever to research the local market.
- Getting too attached – Lots of landlords are unable to detach themselves from the property. Instead of spending lots of money and time decorating the property to your taste, keep the décor neutral and simple. The goal is to make the property appealing to as many people as possible so remember functionality over fancy design flairs.
- Forgetting legal requirements – Even if you are renting your property out to a friend, it is essential to create a legal and formal tenancy agreement. You’d be surprised at how often things go wrong. It is also required that all tenants’ deposits are protected in a Deposit Protection Scheme and remember to get landlords insurance.
- Choosing the wrong letting agent – When letting a property, you can either do it by yourself or use an agent. If you do decide to use an agent, then remember that they could keep part of the rental income. However most people appreciate an agent’s expertise, knowledge and help in finding a tenant. There are numerous agents out there, ranging in quality, service and price so shop around and ask your friends for referral.
- Failing to keep up with inspections – It is easy to get complacent and after the first few checks, landlords soon relax and forget to keep tabs on the property. Aside from cleanliness and how the property is being treated, inspecting the property also allows you to see whether pets or guests are being kept and whether or not the tenant has decorated the property without consent. However, you must remember that a landlord must give notice before entering the property.
- Being unrealistic – It’s very easy to look at things with a business head but if your tenant has paid their rent on time every month and informs you they will be late with a payment, try and be realistic. In addition to this, you should reply to any messages promptly and professionally and if you promised to fix something, stick by your word.
- Not being financially stable – As a landlord, you need to ensure you have a budget, which includes the cost of renting as well as any reparations that may be needed during the process. There also may be some periods where no one is in the property and therefore, you will be receiving no money. Calculate what you can afford and all the expenses that you may face as a landlord including tax implications. It is a good idea to visit several estate agents in order to obtain a realistic estimate of the rental income.
Being aware of these common mistakes that landlords often make will help you avoid them and if you do have any more questions, then please get in touch today.