Think of the word ‘landlord’ and most of us picture an unforgiving older person taking their time to get a faulty boiler repaired. But actually, becoming a landlord can be an ideal investment opportunity. Conditions are ripe with housing in high demand and savings accounts returning low interest, whereas a buy to let could provide an independent form of income not tied to your working life. Get the lowdown on what you need to know before becoming a first time landlord:
Choose Your Tenants Carefully
The single most important aspect that determines your success as a landlord is the tenants you choose to occupy your rental. Getting the right people through the door can make or break your venture. Make sure you set strict rules for what you will and won’t accept and don’t be tempted to stray from them. Even if you work with a letting agent, insist on meeting all tenants personally. You need to develop a good relationship with your tenants and that starts with meeting face to face. Think twice about accepting people with no references, even if they have a good credit score and seem nice in an interview. Knowing you have someone who is likely to take care of your place is the most valuable thing.
Maximise Your Returns
Make your buy to let property work hard for you and think carefully about the investment. Map out what improvements you could do that may mean you can command a higher rental yield or appeal to a different market. Consider schemes to fit solar panels, which are often subsidised and allow you to sell back power to the grid. If there is a basement, garage or shed not being used, could it be separately rented out for storage? There are always ways to up the return on your initial investment.
Collect Payment Online
Seamless, automated rent payments are now possible thanks to systems such as Cozy. No more worries about collecting in person! A simple streamlined system is more convenient for your tenants and you.
Make Sure You Market Properly
Attracting the right tenants is so much easier these days with the whole of the web at your disposal. Make sure your home appears on all the relevant listings sites, arrange for ‘To Let’ boards if it’s standing vacant and never underestimate the power of word of mouth recommendations to find great tenants.
Know the Law
You’d be well advised to get to know the basics of tenancy law and even to track down a good solicitor just in case things go wrong. This house is your investment so bring a businesslike perspective to all your dealings. There are gas, electric and fire safety regulations that you must ensure your property is compliant with. Make regular safety checks and keep records to prove you are keeping your tenants safe – these are also vital for insurance purposes. Also make sure to be up to date with relevant tax legislation such as HMRC Let Property.
Find a Landlord Deposit Scheme
By law, any deposit your tenants pay must be protected, so take the time to find a scheme that allows you to secure the deposit with a registered third party. They keep hold of the deposit for the duration of the tenancy. If there is damage, or the terms of the tenancy agreement have been breached, you can then claim some or all of the amount back to cover your losses.
Stick to a Tenancy Agreement
Having a legally approved shorthold tenancy agreement in place is crucial, even if you know the person you’re planning to rent to. There are standard clauses and conditions that should be in there but make sure the agreement is tailored to your individual property as well. There can be grey areas, such as who maintains a garden to consider.
Make Sure You’re Insured
Not having the right cover can be an extremely costly mistake, so get it right from the start. Standard Home insurance policies do not generally provide enough cover, so make sure you find insurance specifically for landlords that will see you right in the event of non-payment of rent or having to evict a tenant.
Becoming a first time landlord is a journey, and you’ll certainly learn a lot along the way. But find your feet and get the right cover and the right tenants and it could be the perfect investment opportunity.