The property business can be a lucrative one to be in when done properly. If you’re considering renting out a property to tenants, there’s a few things you should consider first…
1. Location is everything
Not all areas of the country are created equal when it comes to letting property. In London you need to be looking to rent on the commuter belt and in areas like Romford, Luton and Dartford. In the Midlands look at Stevenage, Coventry and Romford. In the North you should be looking at Manchester and Leeds, both of which are both full of young professionals and families struggling to step onto the property ladder and if you’re happy to rent to students, you’ll want to be as close as possible to their campus. Wherever you are in the country, make sure your property is in an area where you’ll be able to rent it out at a decent price. The last thing you want is a rental property standing empty or rent that barely covers your mortgage.
2. Letting agents make things easier
Your first instinct might be to try and capitalise on your income by managing your property yourself, but letting agents are usually well worth the money. They’ll find you tenants, check your property every few months, help you evict people if you run into trouble and deal with any issues they might have during tenancy, such as broken boilers at the weekend or break-ins in the middle of the night. Letting agents give you peace of mind that everything is being handled the ay it should be.
3. Being a self-managed landlord is not a 9 to 5 job
If you do want to manage your rented property yourself, you need to know that you won’t only be operating in office hours. If something goes wrong for your tenant in the middle of the night and it’s something they expect you to fix then they’re going to call you, and you will be expected to sort it out as quickly as you can. Even if you’re on holiday. If you don’t want to use an agency to manage your property, you’ll need to be the salesman, debt collector, handyman, inspector and negotiator all in one.
4. Many tenants will break the rules
Even if you advertise your property as non-smoking and no pets allowed, there will be tenants who will tell you what you want to hear initially but will probably end up breaking the rules. This goes for how they treat your property in general too. Some tenants won’t care about cleaning their home and maintaining it the way you would expect them too. You won’t always get the dream tenant who cleans regularly and has respect for you. Having a good insurance policy in place is a good idea if any damage is caused.
5. Always get references
As long as your tenants are paying their rent, paying their bills, living within the law and taking care of your home, does anything else matter? But how do you make sure that those are the people you’re letting to? Ignore the first impressions you have of people. Every landlord who has ever let a rogue tenant live in their property will tell you that they ‘didn’t seem difficult at the time’. It’s easy to pretend to be someone else for ten minutes. Getting references from previous landlords is the best way of finding out if your potential tenants have any outstanding rent arrears or have ruined any previous properties.
6. Deposits need to be protected
It’s now a legal requirement to put your tenant’s deposit into a deposit protection scheme. That money is not yours, it belongs to your tenant, but it’s your security blanket in case they damage the property or take anything that you own when they leave. It needs to stay somewhere impartial until it’s time to negotiate its release. If you get caught keeping a deposit, even if it stays in a separate bank account, you’ll be in serious trouble.
7. Landlord insurance is well worth the expense
Whether its a natural disaster, fire , flood or your tenant has caused damage to your property, Landlord’s insurance will cover you for these types of tragedies. Chances are you’ll never have to claim on it, but should the worst happen then at least you’ll know you are covered. Trust us when we tell you that peace of mind is well worth the expense.
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