Becoming a landlord by renting out your property is tricky, as there is a lot to the role. First time landlords need to do thorough research to ensure that they are prepared for every common eventuality.
Just as in any circumstance in life, things can go wrong. In the case of tenancies and landlords it could be having a tenant who doesn’t pay and whom you then have to evict, a costly maintenance issue, or never having the time – or money – to finish furnishing the flat as you’d promised.
All of these issues to be attended to, so doesn’t it make sense to look into them before embarking on your landlord journey? Here are five ways to ensure you become a successful landlord:
- Treat your rental as a business
Regardless of whether you have one or a handful of properties, you are going to have to put time into the running of this business if you want it to be successful. That means communicating with your tenant on a regular basis and attending to repairs when necessary. The latter will obviously benefit you too since the longer a repair takes to be fixed, the worse – and more costly – is it likely to become. Set up a system for annual check-ups and research a list of tradesmen you can call on when a maintenance issue arises.
- Always be able to cover start-up costs
It’s not simply about buying a property then renting it out. There are a lot of costs to consider before you even get your first tenant installed. For instance, you’ll have to register with your local authority as a landlord, arrange for an energy performance certificate to be completed (as well as gas and boiler checks), fit smoke alarms, buy a general house alarm, change the lock and get several sets of keys cut, pay for credit checks and market the property in the first place.
- Manage your money properly
You don’t have to have an accountancy degree to be a landlord but you do need to know how to manage your finances. This means prepare for any potential void periods. Tenants will move on, after all, and even if you do manage to replace them within a couple of months’ time there is still the cost of credit checks and marketing to fund. Most landlords suggest maintaining a cash flow of around three months rent; many prefer six months’ worth. when big repairs and bills for annual checks come in simultaneously, but there will also be ongoing months when all you have to do is simply collect the rent money.
- Keep your property safe
In order to prevent safety problems for your property, it is essential that you know the building and the safety codes in the area and follow them by attending to regular maintenance and checking periodically. If a tenant is injured on a property that you own, there is a good chance that you’ll be sued. Therefore, you should always have homeowner’s insurance. Furthermore, you need to keep your property properly maintained and in a good shape, to avoid potential mishaps.
- Learn the legal jargon
You don’t have to enrol on a night school course but it wouldn’t do any harm to read a couple of books on property law as it applies to where you live (Scotland and England are different in this respect). For instance, know what you can and can’t say to a tenant, when you have the right to access your property, how to go about applying eviction proceedings, and what type of lease is best for you. It’s also worth checking out if you’re covered for insurance if someone is hurt or injured in your property.