Letting a property can be a worthwhile income stream, that can also be interesting and rewarding. But there are plenty of things which can go wrong. Benefit from the knowledge of an experienced lettings team to discover the most common landlord mistakes and how you can avoid them.
Landlord mistakes to avoid
1. Not knowing the fundamentals
Every landlord is a first-time landlord at some point, and of course that can’t be avoided. However, many landlords fall into the role almost accidentally. Perhaps you’re holding onto a property to rent out when buying your next one, or you’ve inherited a property. The problem is that you need to know the fundamentals of being a landlord.
If you’re totally new to the game, be sure to educate yourself. Even better, avoid any mistakes by using a Property Management Service.
2. Not treating it like a business
Closely related to the first mistake is that often landlords treat their buy-to-let as a bit of a hobby. It’s true – letting out a property can be fun! But it’s best approached as a business, and therefore professionally. This ensures you get the best return on your investment and that problems are planned for, so your buy-to-let ownership can tick along in a more stress-free way.
Don’t forget to do the maths accurately and thoroughly. You need to work out your calculations carefully, including factors like mortgage repayments, repairs, maintenance, and rental income, to ensure you balance the books and make a profit.
Similarly, not treating it like a business means you may be reluctant to extend your portfolio. However, buying new properties to rent out means that you can streamline your landlord business and realise greater profits.
3. Not getting tenant checks
We know it can be a real hassle chasing references and doing credit checks. However, it’s essential that you avoid this landlord mistake that’s well known for causing massive headaches down the line. It’s much harder to evict a tenant than you may think, even if they are failing to pay. What’s more, the most time and effort consuming stage of being a landlord is when you’re between tenants. So, make the effort worthwhile.
You want to get credit reports and also several references. Furthermore, you have a legal responsibility to check the immigration status of your potential tenant. A little patience will pay off in the long run by securing good tenants.
4. Acting outside your own tenancy agreement
Tenancy agreements are there to protect both the tenant and the landlord. You must both operate within it. This means that you must know your tenancy agreements well and, if in doubt, check them again before you act. The tenancy agreement sets out both your rights and your responsibilities, so make sure you are clear about what it says.
This also helps you understand if your tenant is making reasonable requests or breaching the contract. It protects you from legal action, including fines and criminal charges.
Our Landlord Services can help ensure you use a clear and fair tenancy agreement.
5. Not checking the property regularly
The tenancy agreement should allow for regular checks of the property. Unfortunately, landlords are often busy people and overlook property checks, thinking that everything will be fine. Unfortunately, this can end up being costly and even more time-consuming in the long run.
Property checks are good for picking up problems early. For example, a small damp problem or a leak is easily fixed – but, if left, can result in widespread disruption. You also get a window into seeing that the tenant is looking after the property as expected. Furthermore, you can check there’s no subletting going on.
If you don’t have time for these landlord tasks, that’s not a problem. Just use dedicated landlord services, picking a level of service that suits your needs.
6. Having a pre-tenancy inventory
The tenancy agreement is often seen as the most important document shared between landlord and tenant, and that’s true. But closely on its heels is the inventory. This can be done by your letting agent, but always make sure that the inventory of the property is complete – whether it’s furnished or not.
This can then be used to ascertain the condition of items and be used in the check-out process at the end of tenancies to determine the paying back of deposits.
7. Taking good tenants for granted
Not all tenants are created equally. When you have a good tenant, it’s very easy to overlook them and let time pass. Instead, good tenants should be rewarded and kept happy as they are worth their weight in gold. The longer you can hold onto good tenants, the more hassle-free your role as a landlord is, and even more profitable.
For example, a good tenant who happily does their own high-standard DIY can end up saving you from other problems in the long run. Tenants who pay reliably on time save you money on chasing rent arrears. They also ensure you don’t lose out to downtime between tenants when you have to move bad tenants on.
8. Not accounting for downtime
Even with the best tenants, there will be times when the property is empty. A very common landlord mistake is to fail to take account of these down times when doing the calculations. Downtimes should be expected and accounted for.
9. Not preparing for maintenance
One of the most common landlord mistakes that we see is would-be landlords failing to factor in the cost and disruption of maintenance and repairs. Maintenance and repairs are part and parcel of owning the property as a landlord and they must be factored in.
You should be saving for things like roof repairs, appliance breakdowns and boiler servicing. These should all be treated as normal business expenses, rather than eating into your profit. A well-maintained property will be more profitable in the long run.
Avoid common landlord mistakes
Being a landlord can be isolating and it also means you’re more likely to make mistakes and have the consequences of those mistakes to deal with. Instead, get the experts on board to help ensure that you get the support you need.
Use our landlord services to ensure that you are supported to be the best landlord you can be.