Whether you’re a seasoned professional or an accidental landlord, it’s always a good idea to listen to advice from those that have been there and bought the t-shirt.
We spoke to our network of landlord associations and asked them what their top tips for landlords were. Here are the top 10 tips from those in the know!
1. Stay on top of the rules
By far the most popular tip was to keep on top of the rules. Whether that is new legislation or key documentation, the most likely reason you could find yourself in hot water is if you haven’t dotted the ‘I’s or crossed the ‘T’s.
If you take a slap-dash approach to health & safety and something goes wrong you could find yourself facing huge fines, criminal charges and even prison. Don’t get caught out – complete the right checks and make sure your H&S paperwork is absolutely up to date.
2. More paperwork?
Yes, it’s dull – but our second top tip is still paperwork related. Keeping your records up to date and ensuring all your paperwork is accurate is vital.
Whether it’s your AST contract, your references, your inventories or your correspondence, it’s really important to stay on top of this. That way, if you do have problems with your tenants, you’ll need to have this paperwork complete and up-to-date to give you the back up to any legal action.
3. Respect your tenant
Remember there are two parties in this agreement; you and your tenants. It has to work for both parties and when it doesn’t is when things can go wrong. So remember to respect your tenants.
Communicate with them in a professional and appropriate manner, listen to their concerns and empathise with them as you would want others to empathise with you.
By showing them respect they are far more likely to respect you and your property. And pay the rent, of course!
4. Never be afraid to ask
You may feel a little silly asking what you assume to be a dumb question, but better to look silly for a few minutes than to not ask and make a mistake that could end up costing you. So ask! Ask friends, ask other landlords, ask an agent. Jump on a landlord web forum and ask.
Consult more than one person too – as often other people haven’t asked and could be making up the answer!
If you don’t know, don’t guess. The internet is a huge resource and you can guarantee that the answer will be there somewhere. So, ask away.
5. Take your time when selecting tenants
Don’t rush to fill your property with the first interested party. Take your time to find the right tenant. We looked into this in more detail in our ‘Top tips to finding the right tenant’ guide but the main points were:
- Get to know your tenants and check references
- Get a recommendation
- Use an agent
- Act professionally
- If in doubt, walk away
They all basically boil down to not rushing into anything. Is it worth risking giving the keys to your £200,000 buy-to-let house to a total stranger? No. Take your time, get to know your prospective tenants, do your homework and if in any doubt, step away.
6. Be a human being first
Similar to point #3 – but really, this is all about remembering we’re all human beings. If you see your tenants as cash cows this will ultimately start to erode the way you treat them and the trust you have in each other.
Listen to your tenants and treat them as you would a family member. Get it right and you could have financial stability for a decade or longer. Get it wrong and you could be scratching around looking for new tenants every six months and dealing with vacant periods every year.
7. Grow your knowledge
If you’re keen to make sure that your buy-to-let portfolio works for you then make sure you are giving it the right attention.
Study the risks and how to avoid them, learn from your mistakes, read up on the best ways to manage your properties and how to keep them in order, and stay on top of new legislation and what it means to you and your tenants.
Having the knowledge will give you the confidence to manage your tenants, agents, tradesmen and utility companies. It will mean you’re not being over-charged or being taken for a ride. Keep learning and enjoy the journey.
8. Understand the financials
This could, arguably, be the no.1 top tip as it is so important to the long-term success of any property investor.
You must have an absolute clear understanding of the financials. Not just the basics, but the whole picture.
When you’re looking at understanding your potential returns and yield have you worked through all the costs, tax implications, interest and other risks? Have you considered the most tax efficient way to structure your portfolio? Have you factored in all the potential costs?
It is easy to fall into the trap of only looking at the top lines: cost of purchase, cost of servicing the mortgage and cost of basic bills versus the rent you’re going to get. But that is probably only a fraction of your considerations.
Do your homework, ask the questions and get some advice before working through the financials to really ascertain your liabilities and potential income. Is it definitely worth it?
9. Manage your agents
Many landlords will happily give up 10% of the rental income to an agent in the hope it means they can sit back and enjoy the fruits of their labour – but we all know this isn’t the case. Agents need managing.
Make sure your agent works for their money by keeping them on their toes! Talk to them regularly about tenant issues, maintenance requirements, legal and H&S documentation, inventories etc.
Make sure that they know that you know what is expected of them.
They’ll want to keep you off their backs – so that means decent tenants, paying their rent with no issues and keeping everything in order.
10. Join a landlord association
Unsurprisingly, considering our panel of experts included many landlord associations, our final top tip is to join a landlord association.
A one-off annual cost may be an outgoing you’d prefer to avoid, but it’s a small amount when compared to the potential savings you can make taking into account the quality advice, bulk savings on offer to members and the mistakes you can avoid from recommendations and answers to those ‘dumb questions’ you have!
A good landlord association also provides access to legal experts, document templates and training, as well as a network of like-minded souls happy to share their experiences at formal events or a local social gatherings.