Becoming a landlord involves more than just listing properties and cashing cheques. Are you ready to take on the job?
New landlords who are properly prepared will prevent loads of costly and time-consuming work down the road. Alternatively, ill-prepared landlords may find themselves in legal trouble.
The 5 tips below will help you prepare your property for listing, find honest tenants and protect your investments.
1. Know Your Legal Obligations
Before you even think about listing your property, you need to become familiar with your legal obligations to your tenants according to UK law. A number of obligations rest on your shoulders, including safety, rent pricing and increases, taxes and repairs. Plus, there are a host of additional requirements if you let an HMO property. You can find a rundown of your obligations here.
Many landlords assume that they know what constitutes a safe property, but the law may say otherwise. For example, did you know that minor issues like uneven stairs or a damp pantry may put you in violation of safety regulations? Certain counties also require HMO landlords to be licensed before letting a property. Failing to do so may incur large fines.
Before you list your property, check with your local council to make sure you’ve covered all the legal bases.
2. Perform Regular Inspections
Regular inspections by professional contractors are an important part of keeping your property safe for tenants (and within the law). They can also save you a lot of cash.
It’s essential to perform a fire risk assessment, pest control, plumbing assessment and electrical inspection before you let your flat. It’s also a good idea to repeat inspections every 6 months to protect your property from depreciation.
Rental properties (especially HMOs) may depreciate faster than single-family homes. Regular inspections will reveal damage to the property in its early stages, allowing you to cheaply repair what would have become disastrous in the future.
3. Choose Tenants Wisely
Even if you follow all the rules, it doesn’t mean that your tenants will. Bad tenants can make your life miserable and increase your workload massively. For that reason, it’s critical that you perform comprehensive background checks on potential tenants. Don’t go with your “gut feeling.” Just because you may get on with someone doesn’t mean they are financially responsible or good custodians.
When accepting applicants, ask them to include references from previous landlords. If they don’t have any, ask for references from employers. Make sure to perform legal background checks and credit checks as well. Taking the time to find the right tenants will result in less work and lower tenant turnover.
4. Make Your Property a Competitive Rental
Before letting your property, ask yourself what could make it more attractive to tenants. Remember that the price of your property depends on the marketplace. Higher quality accommodation goes for a higher price.
Certain factors, such as location, are out of your control. But there are changes you can make to increase the value of your space, enabling you to charge more rent. For example, replacing appliances with new models and getting nicer furniture can make your space much more competitive. A remodel of a kitchen or bathroom might allow you to boost monthly rent by as much as £100.
The value of your property depends on your ideal tenant too. In HMO properties, creating common areas for socializing may attract younger tenants, while boosting security may attract professional tenants who spend most of the day at work.
5. Be Present
Being a landlord is not a hands-off job. While you shouldn’t pop round to your property whenever you feel like it, you should be available for your tenants if they need anything. If an emergency on the property occurs at 2 AM, you don’t want to be two hours away by rail. If you don’t live near your property, enlist the help of a manager to maintain a local presence.
Being present also improves the chances that your property will be well-treated by tenants. If you are present in tenants’ lives and take actions that show you care about their well-being, they will be much more likely to respect the property and pay rent on time.
Being a Landlord is a Job
Some seem to think that becoming a landlord is just about earning passive income. While it can be a great way to make extra cash, being a landlord is a job that requires consistent work. Whether it turns into a full-time money pit or a lucrative side gig depends on how well you prepare. Follow the tips on this list to minimize the tough stuff and enjoy a relatively simple and profitable living as a landlord.