When houses were much cheaper, many people bought properties with the intention of renting them out to others. It was easy to do, renters didn’t ask for much, and they could quickly make a lot of money. Then, house prices started their astronomical rise, fewer people could afford one home never mind more, and laws for landlords changed. Suddenly they had to do a lot more to make their homes fit for tenants and to look after them afterwards. They had to pay higher taxes on second and subsequent homes, higher insurance rates and they had a much harder time making money from their properties. Housing companies came along and bought up all of the cheap rentals as fewer, and fewer everyday people thought buying to rent worth the hassle.
But, the rental market is changing too. No longer are people renting for a few months or years while they search for their forever home. Rented accommodation is no longer a short stop-gap between leaving home and buying property. It can be a long-term housing solution for many. Young people today get married and have children, while still living in rented accommodation. They move from one rental to another when their family expands, and are in a constant search for that perfect rented house. One that’s large enough for their families, affordable, in a great location, in excellent condition, somewhere they can make a long-term home for their families with a helpful and understanding landlord to help them on their journey.
This means that there’s a gap in the rental market for landlords that care. Those that aren’t just trying to make as much money as they can while doing very little work. Here, you can make money, make a difference to your tenant's lives and build a reputation as a great landlord. Then, you can make big bucks.
Make Your Property Great
There are a lot of rental properties on the market and a lot of landlords that have a reputation for doing the bare minimum to make them liveable. Make your property great to attract the very best tenants. Those that will stick around and look after your property.
Remember, most renters are renting because they can’t afford to buy. Usually, because they haven’t saved a large enough deposit. This means they probably don’t have a substantial disposable income. One thing these people often struggle with is finding a nice property in a friendly and convenient location. They can either afford a good house, with enough space and a garden, in a questionable area they’d rather not live in. Or, a poorer quality home in the ideal area. Rarely can renters afford both.
Try to stand out from the crowd of rental properties by buying houses in desirable areas, especially near good schools to appeal to families who are more likely to be long-term tenants. Then, before putting it on the market spend some time making sure the house is at a great standard. If you’ve already got tenants in and want to make some big changes, Schemel-Tarrillion can help, without you having to lose rental income.
Find Long-Term Tenants
Every time your property is empty, you lose rent. The longer it’s empty, the more money you lose. You also have to spend money. There’s advertising, estate agent fees, taxes and insurance on empty properties and of course the risk of having to deal with damage to the property.
Many tenants frequently move between properties until they can afford to buy. Often because the house isn’t perfect for them. Younger tenants without responsibilities and commitments also move around more often.
Finding long-term tenants who are responsible and take care of the house is the best way to avoid any of the costs that come with an unoccupied property. Making you’re your house is in an excellent location, and excellent condition is the first step towards long-term tenants. But, you also need to ensure that you keep the property to an excellent standard and that you deal with any issues in an efficient and timely manner. Look after your tenants and the house, and they are much more likely to stick around. While your relationship should first and foremost be a business one, that doesn’t mean that it can’t also be polite and friendly.
Be friendly, welcoming and approachable. Make sure your tenants are comfortable coming to you with any problems they might have, and you’ll have the best chance to keep them.
Keep Tenant Turnaround Time to a Minimum
Try as you might to find long-term tenants, at some point, they will leave. When this happens, it’s important to get new ones in as soon as you can. While still taking your time to make sure the property is in perfect condition.
As soon as your tenants give you notice of their desire to leave, start putting together a plan. In theory, if you’ve had good, long-term tenants, they’ll leave the property in good condition. But, if they’ve lived in the property for a few years or more, chances are it will still need at least a little TLC.
As soon as your tenants move out, inspect the property and make a list of what needs doing. Then, get on it straight away. Spend the time and money that you need to do a good job and then start looking for your next tenants.
Minimize Advertising Costs
Estate agents and advertising can cost an absolute fortune, especially if you end up with a few properties vacant at the same time. However, there are ways to minimize these costs.
Utilize the internet as much as you can. If you wanted you could avoid a considerable portion of advertising costs by doing it yourself. List your property online and advertise on social media. There’s a risk that tenants won’t take you as seriously this way, but as long as you list the property with plenty of pictures, build yourself a solid reputation and present professional branding, you should be fine.
The best way to reduce advertising costs is by needing to advertise for as little time possible. One great way to do this is by building a relationship with your tenants. Word of mouth advertising could lead to them recommending a new tenant to take over the lease before they’ve even moved out.
Increase Rent
To attract and keep the best tenants you’ll want to keep your rents as low as you can. But, that doesn’t mean that you shouldn’t increase them. As inflation rises, taxes increase, and the cost of maintaining a property goes up, it’s only fair to assume that a landlord would increase rent. If you had the same tenant for ten years and you never put their rent up, you’d find yourself losing out heavily. Especially compared to the market value of the house.
Every year, take a look at what similar homes in the same area are being listed for. Try to keep below it, but explain to your tenants that you do need to increase rental amounts and your reasons why. Don’t do it too often, and make sure any increases are fair and small and the majority of tenants will be happy to pay to avoid the hassle of moving. Especially if they are happy with the property and yourself as a landlord up until that point.
Remember, It’s a Business
It can be tough finding the balance between being a good, trustworthy and approachable landlord, who has a friendly relationship with their tenants, and remembering that you are a landlord and it is a business relationship.
Being too friendly can give tenants the wrong impression. They can think that it’s ok to be late for rent or to take advantage of your kindness. They can start to become disrespectful and stop taking the correct care of what is at the end of the day, your house. In the short-term, this can mean you are waiting longer than you should for rent payments, which could affect your own finances. In the long run, you could find yourself needing to make expensive repairs to the property or in legal disputes about fair wear and tear.
Make sure that you set clear boundaries from the very beginning as well as avoiding other common mistakes. Take a security deposit, through the official and legal channels and impose a late fee on any payments. Make sure you stick to your boundaries, even if your relationship is a good one. Tenants need to understand where your lines are.
Add Services
Look at ways to make some extra cash on the side of rent and tenancy. If you own a block of flats, add services like a laundry or gym that you can charge extra for. Even in single residencies, you could offer extra cleaning or landscaping services. New tenants are often willing to pay a little extra for convenience.
As a private landlord, you will probably find it more cost effective to own fewer properties, and maximize their income, than own more properties and spread yourself thin.
