Advice for New Landlords
In my time in the property industry, I have seen too many landlords make bad decisions. Buying a property to rent, or moving away and renting out your place is a risky business. I may not be an expert but my experience does allow me to offer advice for new landlords.
I hope in my lifetime to be able to buy a property (or five) to rent out. This will provide an extra income but also it’ll provide a legacy to leave to our children.
There’s so much information out there for tenants, but I don’t feel like there’s enough advice for new landlords. I’m not in a place to advise on buying a property but I can offer some tips.
When letting a property for the first, or fiftieth time, there’s many things to consider.
Know your Property
You need to figure out what your property is worth. There are many factors in valuing a rental property. Location, size, transport and amenities are the main ones. Different property types offer different things. The more the property and the surrounds have to offer, the higher the price will be.
Know your Target Market
A house in an area near a good school is most likely to attract a family. A super modern flat near a tube station is more likely to attract young professionals. You may know there are certain people you don’t want to rent to. For example, you might not be happy renting to students. Or you might feel your small flat isn’t suitable for a family of 5. Within reason and without discrimination, you need to have a rough idea of who you’re marketing your property to.
How to market your property
Whether you choose a national brand, a local high street agency or choose to market your property yourself, there’s several things to consider. You need to ensure the price is right. Timing is important, too. Summer is a great time to market. January is not. Good quality photos are vital. An online ad is most likely the first place your potential tenant is going to see your property. The pictures (and the description) have to make them want to take the effort to call, arrange a viewing, come and, eventually, live there!
The privately rented sector is one of the most heavily legislated industries. From serving government prescribed information to serving notices and returning deposits, the legalities can be a minefield. If you’re not an expert, you need to seek professional advice. This could come from your estate agents, from a property solicitor or by joining a body like the NLA.
You need to make sure that the people that you’re entrusting your property to are worth it. The most obvious check is affordability. Can they afford to rent your property? Rent, utilities, insurances, cars, entertainment… It all adds up. Ensure your referencing (or that of your agency) is comprehensive enough to protect you.
Maintenance and Repairs
It’s inevitable that things will go wrong, at some point. If you buy a property brand new from a developer, you’ll likely have a warranty period of around 2 years. If not, you’ll need to be prepared for everything from minor radiator issues to windows falling out of a building. Yes, that’s something I’ve genuinely dealt with in my time.
If you’re mortgaged, you’ll most likely have a clause in your mortgage that stipulates you have to have landlord insurance. If it’s not a formal obligation, it’s still worth it. These policies come in a wide range and can cover anything from accidental damage to court proceedings for repossession. It’s also worth having repair policies in place, especially if you have a boiler that’s more than a couple of years old.
You need to ensure you take a security deposit, and that’s its registered and protected in a government scheme. I strongly advise for you to have inventories done at the beginning and the end of the tenancy. This helps prevent disputes at the end of the tenancy or offer evidence for deductions if necessary.
The list is almost endless.
I literally work a 40 hour week doing all of the above and more. If you don’t have a lot of spare time in your life, or the knowledge or experience to safely and effectively manage a property, I recommend you go with a managing agent who can take your stress away! I spend a lot of time dishing out advice for new landlords. I thought it would be worthwhile to share! I’ll be expanding on most of these topics in the future, but if you have any questions please do ask!