Becoming a landlord is an exciting but often daunting journey. Perhaps you’ve recently invested in a property with the intention of renting it out, or perhaps you’ve become an accidental landlord and have found yourself in possession of a property with the opportunity to rent it out.
Whatever your situation, being a landlord can be really rewarding and also profitable. However, as with anything, there are things that can go wrong.
You should arm yourself with all the knowledge possible before throwing yourself into this new role.
In this article, we explain what to be aware of before becoming a landlord.
Collect Your Rent
Money can be an awkward topic – especially when it comes to asking for money. Each month, your tenants will owe you rent payments.
As a landlord, this is your revenue. Perhaps you have a mortgage on your rental property. If so, you’ll rely on these rent payments in order to pay your mortgage.
If you don’t have a mortgage, your rent payments are your profit, and if you aren’t making a profit, you may end up asking yourself what the point of this endeavor was in the first place.
That’s why it’s important to keep on top of rent payments. Unfortunately, it can be pretty common for landlords to find themselves not being paid rent.
Try not to feel awkward about putting your foot down with late rent. Rent is the least you should expect from your tenants.
That said, remain open, approachable and personable so that if your tenant is genuinely struggling with their finances, they feel that they can come to you with plenty of notice to let you know before it becomes a problem.
If a tenant has lost their job, for example, you may be able to offer a rent holiday or get a mortgage holiday on your property until the financial situation improves.
Perfect Your Tenancy Agreement
Every tenancy should have a tenancy agreement. Think of this as the bible of the tenancy, detailing anything and everything that a tenant needs to know and adhere to before they rent your property.
Should anything go wrong or any disagreements arise, the tenancy agreement can be a really valuable tool in resolving issues and reflecting on what was agreed at the start of the tenancy.
Putting together your tenancy agreement is certainly not a job to be rushed. Take your time and make sure you get it right.
You can find online templates to make this easier. Just make sure you add in anything extra that’s important to you, such as clauses around smoking in the property.
Get Covered With Landlord Insurance
Landlord insurance isn’t a legal requirement, however, that definitely doesn’t mean that it should be overlooked.
You may actually find it difficult to take out a buy-to-let mortgage without a landlord insurance policy in place, as standard home insurance doesn’t provide the right kind of cover and many mortgage providers will insist on you having landlord insurance before they offer a mortgage.
Landlord insurance doesn’t have to be expensive. You can tailor your policy to simply cover the basics or to give you more comprehensive cover.
As a first-time landlord, it’s more important than ever to make sure you have the right insurance in place.
It can protect you against issues such as accidental damage, malicious damage, loss of rent and legal fees.
Screen Your Tenants Thoroughly
One of the most important things to get right as a first-time landlord is the tenants you choose to entrust your property with.
Get this wrong and you could be left with more issues to deal with long-term. However, find solid, trustworthy tenants from the get-go and you’ll hopefully be in for a smooth run to ease you into your landlord career!
Screening your tenants can help you achieve this. You can either carry out screening yourself or turn to a professional to help.
Screening your tenants involves checking credit scores, gaining employer references to confirm income and getting references from past landlords if applicable.
This helps you gain a better picture of your prospective tenant’s lifestyle, financial situation and background.
At least to start with, it can be a good idea to avoid those with bad credit scores and red flags such as criminal records.
Of course, these things don’t necessarily mean that someone is a bad tenant but you may want to play it safe for your first few tenancies whilst you gain some experience.
It’s totally up to you who you choose to rent to, but be very careful not to discriminate. You cannot reject a potential tenant over their marital status, pregnancy, age or any of the ‘protected characteristics’ such as nationality, gender identity, sexual orientation, disability or religion.
Build Good Relationships
A lot of landlords get a bad reputation. They can often be seen as money-driven, lazy and unreasonable.
Don’t give your tenants a reason to believe the stereotypes! Take any issues and repairs seriously, resolving them in a timely manner and respecting the fact that it is your duty to provide a safe and functional home to your tenants.
Why not go the extra mile to really establish yourself as a landlord that cares? Could you send a Christmas hamper during the festive season or a birthday card for a little personal touch?
If tenants find a landlord that they know cares and who will look after them, they’re more likely to stick around and extend their tenancy.
This is good news for any landlord, as it saves you from advertising your property and finding new tenants year after year.
Just remember – don’t be overbearing. As much as it’s a good idea to build a relationship and rapport with your tenants, it’s also important to give them space.
Happy tenants and a clued-up landlord are a recipe for success. Be prepared to go into this endeavour and you’re sure to set yourself up for a positive experience.