Don’t fall into the following 9 most common landlord pitfalls when it comes to dealing with your investment property.
1. Not referencing a potential tenant
You may be in a rush to get a tenant into your property to generate a rental income as soon as possible. However, make sure to spend enough time referencing your tenant thoroughly. Call their employer, check payslips and bank statements. Use a tenant referencing service similar to the one that NLA (National Landlord Association) provides to its members at a small cost.
Do not allow a tenant to rush you, just take your time making the decision to accept an individual as your tenant. How to attract the best tenants?
2. Thinking the property will always be rented
Before agreeing to purchase a property, do your own financial due diligence. Ensure that you can pay the mortgage in the event that you have void periods. Make sure you have sufficient funds in the account to cover the mortgage payments when your property is vacant. How to avoid tenancy void periods?
3. Underestimating the cost of repairs or ongoing property maintenance
Maintain the property: tenants will be more likely to stay and pay their rent on time with no issues. Respond to their queries in a timely manner. Keep sufficient income to cover the costs of managing the property (i.e. painting, cleaning and carpet cleaning between tenants).
Also, have a financial plan in place in case there are any unusual circumstances as dealing with structural issues etc. Unexpected costs of being a landlord
4. View it as a business
Owning rental properties is a business and in order to generate a profit, you’ll need to operate it as such. That means establishing separate bank accounts for deposits and expenses. Use a bookkeeping system and consulting a tax professional. They will ensure you are correctly handling and paying taxes on your business.
It is a business transaction and your tenant is your client. Landlord Insurance for beginners
5. Do not rely on a handshake
Make sure your tenants sign an adequate lease to reside in the property. Ensure that he or she understands the terms of the contract. If you run into problems with your tenant you will need writing, binding documentation (i.e. a lease). So, the judge could make a ruling. As long as you follow the procedures and comply with regulations you are safe. What are the common issues with tenancy agreements?
6. Not carrying out regular Property Inspections
Do regularly check your property and stay in touch with your tenant. Make sure to give 24 hours notice and get your tenants permission to enter the property. Stay in communication with your tenant to ensure you can resolve issues before they arise. How to keep your tenants happy?
7. Not meeting health and safety regulations
As a landlord, you’re required to make sure the property meets health and safety standards and follow the regulations. Have smoke alarms and carbon monoxide alarms fitted, furnish the property with fire-resistant furniture, have regular gas safety checks etc. Do you need smoke alarms and carbon monoxide detectors in rental properties?
8. Delaying an eviction.
Not beginning eviction proceedings as soon as legally possible can be a very costly mistake. If you run into problems with a tenant and are unsure about your rights or how to proceed, contact a property lawyer as soon as possible. How to evict a tenant in the UK?
9. Not having evidence
It’s essential that you keep written documentation of interactions with your tenants. You will need them in the event that you ever need to take them to court. Note phone conversations and keep copies of emails, voicemails or text messages, etc. to be able to support your allegations. How to successfully manage my property?