Being a landlord isn’t easy – it’s not like any other mainstream investment and needs constant attention. Lee Grandin identifies the top five pitfalls landlords face and provides guidance.
Problem 1: Finding the right tenants· Think about where you are advertising. Choose the sort of publication your ideal tenant would read. Placing your ad in the right place is half the battle.
· Carry out security checks. Run a credit check and get references from previous landlords. This way you’ll be reassured that they will be able to pay the rent and will not cause any problems in future.
· Use a letting agency. If you’re finding the search for the perfect tenant a struggle, use somebody with more experience. Do shop around, as the services offered and costs can vary hugely.
Problem 2: Fulfilling your legal obligations· Ensure you have an assured shorthold tenancy agreement. This is basically a contract between a landlord and tenant, so it’s the most important document to get right.
· Find a tenancy deposit scheme. Since April this year, landlords have been legally bound to keep their deposits in a tenancy deposit scheme. There are a number of schemes available, so it’s worth doing your homework.
· Join a landlord’s organisation. For example, if you are a member of the National Landlord’s Association (NLA) they can provide you with all the legal documents and advice you need.
Problem 3: Finding time to manage the property· Buy close to home. Calls at 3am from tenants who have lost their keys are not unusual for landlords. If you choose a rental property close to your home, this makes managing the property all the easier.
· Get to know local tradesmen. Broken washing machines and leaking showers are all part of a landlord’s responsibility and if you are not a DIY expert get to know someone who is.
· Consider using a managing agent. It may be worth using a letting agent to manage the property and be responsible for minor repairs.
Problem 4: Difficult tenants· Be careful who you let your property to. When looking for tenants ensure you carry out all the necessary credit and reference checks.
· Issue warnings. Complaints from neighbours and rental arrears are just a couple of the problems landlords can face from their tenants. These can be tricky to deal with, but landlords are legally entitled to issue a warning should their tenant be disruptive.
· Be aware of your rights. If a tenant has broken the terms of their contract, you are well in your rights to serve them notice.
Problem 5: Ending tenancies· Check the property. Make sure before the tenant moves out that the place has been left in a suitable condition and is in a fit state for the next tenant to move into.
· Have an inventory. Check that everything that was provided still remains in the property, or has been replaced if it has been broken or damaged.
· Deduct from the deposit. If the property is not in a reasonable condition, or there are items missing from the inventory, it is perfectly acceptable to deduct money from the original deposit before handing it back.
Lee Grandin is managing director of LettingAgent.com