Being a landlord can be hugely profitable and rewarding, however it can also be quite daunting. It’s one thing investing in a buy-to-let property, but then you hand over control of it to potentially a total stranger.
With this in mind, there are definitely a few important things to be aware of before becoming a landlord. It’s important to get it right, especially the first time around. Let’s go back to basics and break down the most important tips for first-time landlords to ensure a smooth first tenancy.
Consider using a letting agent
Using a letting agent is totally mandatory, but there’s a reason why many landlords choose to. Letting agents do much of the tricky work so that you don’t have to. Of course, this comes at an extra cost, but this doesn’t have to break the bank depending on the level of service that you opt for.
The most basic service is tenant-find only. This is where a letting agent will find you a tenant and arrange the let. They will usually collect your tenant’s references, do credit checks and collect deposits. This service usually costs around one month’s rent or a percentage of the entire tenancy contract.
As a first time landlord with little to no experience, a letting agent provides a welcome safety net in finding the right tenant for your buy-to-let. There’s no need for you to try and navigate screening, regulations and legislation and massively reduces the risk of things going wrong. A letting agent can show you the ropes and explain the processes, preparing you to go it alone next time around if you want to.
Take out landlord insurance
This is not a step to be skipped. Landlord insurance covers you against many of the eventualities you might encounter over the course of your landlord career. Policies usually include property owner’s liability insurance, contents insurance and buy-to-let buildings cover.
There is no legal obligation to take out landlord insurance when you begin renting out your buy-to-let, however you may struggle to get the go-ahead from your mortgage lender to take on tenants without it. Ensure that you compare landlord insurance to find the right cover that you are after at a price that you can afford.
Perfect the tenancy agreement
Every landlord needs to put a tenancy agreement together at the start of a tenancy. A tenancy agreement includes everything from the amount of rent due and when, to rules around smoking and pets. This is something that is really important to get right. If anything goes wrong within your tenancy, the tenancy agreement will become something that you will refer back to in order to confirm what has been agreed on between you and your tenant.
It can be difficult to know where to start when putting together a tenancy agreement, but there are templates online that provide you with a good, basic outline. You can tailor it to your own needs and add in your own clauses if needed. Just make sure you use a template for the UK, as there are plenty of examples out there.
Take rent collection seriously
Paying the rent is the least you can expect from your tenant. Make sure that your tenants understand this from day one. Your rent is your revenue, so late payments and late charges must be enforced.
This doesn’t mean coming down on your tenants with an iron fist. It’s really important to remain personable and approachable so that if a tenant is having trouble getting their rent together, they know they can come to you and be transparent with plenty of notice. That way, you can put an alternative rent payment plan together with them to help tackle the issues.
Be responsible and kind
Let’s face it, landlords get somewhat of a bad reputation. Don’t reinforce the stereotype. Keep a good, strong line of communication with your tenants and resolve repairs and issues as quickly as you can. It all comes down to respect, and if you take your duty of care seriously, your tenants are more likely to look after your buy-to-let investment.
It’s also important to remember to not come across as overbearing and intrusive. Know when to step back and leave your tenants to enjoy the property and only contact them when you really need to. Keep your tenants happy and comfortable, and you can enjoy happy, long and profitable tenancies.
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