Wednesday, July 12, 2017

Are You A New Landlord? Avoid The Common Mistakes Made In Your Profession

Photo from via Flickr

Owning and renting property is an exciting prospect. Once you get into the market with a spare property that you’re happy to let out, you have a burgeoning cash cow on your hands. People will always need a place to stay, and thanks to hard work and a little bit of luck, you are now able to profit from that exchange.

It’s not difficult to assume that the tenants are going to apply thick and fast for your property. No matter what location you’re in, finding a tenant for your home is usually a relatively easy process, again emphasized by the fact that people will always need to stay. If your property is in a city environment, tenants will be tripping over themselves in order to come and live in your abode, for study or work.

But there are a few common mistakes that landlords make when they get into the real estate game. Property owners sometimes think that a house is a house and that once let the work is over to a degree. This is simply not true. Acting as a property owner is a dynamic, engaged process. You would be right in assuming that the best possible landlord/tenant relationship is one where you hardly have to communicate, but when you do, it’s important that you’re reachable, prompt with a response, and available at most hours of the day.

Despite the lucrative nature of working in property lettings, you arguably have a much deeper responsibility than even a hotel owner would. While you are protected by the laws of a contract and the tenant has his or her side to upkeep, you should be as active and engaged in the lettings process as the tenant is.

What follows is how to proceed as a new landlord, and how to avoid the common pitfalls and errors new people to the industry usually make.

Do Assess Your Targeted Tenants

First of all, after you’ve made the property suitable for habitation, you need to assess who you’d actually like to take the property off of your hands. This is not a difficult consideration in most circumstances. What’s popular in your area? If you’re living in a highly student-dense area, it’s wise to open the let to students. Remember, students party, and are likely to make the house a mess at some point during their tenancy. This is why you should charge a higher security deposit for them to enter, and also ask them to provide a guarantor such as a parent who can pay the bills should the student allocate all of their money towards partying (which is not uncommon.)

If this doesn’t sound appealing to you, consider going the professional-only route. In this case, you might ask the tenant to provide proof of their work, alongside bank statements or invoices for their job in the last six months.

Do Market Your Property Well, But Be Accurate

Marketing a property is a fine art. On the one hand, you want to make sure that the tenant is attracted enough to come for a viewing. On the other hand, you don’t want to tenant to think that the photographs they were lured in with exaggerated the household. Strike a balance, and make sure that the rent is accurate for what you’re offering. Research local property and assess if you can charge your original intended figure with ease. Using an investment property management firm can help you assess the exact requirements that modern tenants expect from a property, as well as giving you the best backing to begin

Do Check The Tenants Before Accepting Them

If letting your property to tenants, it’s always important to make sure that they have a stringent reference check done on them. If they have a reference from a previous landlord, all the better. This will let you know that the tenant has a history of paying the rent on time, and makes their application that much stronger.

If you desire, you can also run a credit check on the tenant to ensure that they have a history of making good financial decisions. Sometimes you might accept a tenant with a bad credit history if they explain to you why this is - student loans, a period of illness or some other factor that they can prove. This is down to your discretion as a property agent. You have no necessity placed upon you to accept any tenant you feel uncomfortable about.

If you can, use an agency to complete the reference check, because they usually have the most expansive range of connections and networks to get thorough details about your tenant from the limited information they provide.

Do Make The Tenant Aware

If you have certain criteria that the tenant must know about, it’s important you let them know from day one of their application. No excessive noise past 9pm due to the families living nearby, no smoking, no pets, no welfare, these are all examples of criteria you might expect your prospective tenants to adhere to. Make sure that these terms are explicitly stated in their contract before you let them the property.

Don’t Disappear

Once you have a tenant signed and happy in your property, the process has only just begun. Remember, it falls to you legally to take care of any maintenance queries they might have, within reason. Fixing an oven, getting the electricity back online or replacing a broken vacuum cleaner are all little expenses that comes with the cost of letting property.

Fixing light bulbs can be done by the tenant, and you shouldn’t be expected to provide those. Use your common sense to identify what constitutes a problem that needs your involvement or not. A good way to get around this fact is to hire the services of a maintenance agency. Paying a monthly subscription fee can help you cover some of the overhead costs of sending out a professional repairman to look at your property when disaster strikes and something goes wrong. Remember, you’ll still need to pay for parts provided, but the hired labor will allow you to free up your busy schedule for other important endeavors.

Being a great landlord is usually an exercise in self-restraint, availability, and understanding. Remember that your tenants are people, and as long as they respect your terms and pay the rent on time, you have a responsibility to their wellbeing. Duly enacted, the tips on this list will help you become a great landlord and secure repeat business in future.

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