Despite rising interest in rental properties, the economic climate is still causing problems for some landlords. Stephanie Robinson outlines her top tips for weathering the storm...
In many areas around our region there is strong demand for rental properties, bringing benefits for some landlords.
However, the static nature of the domestic housing market is also increasing competition, as more homeowners look to rent properties they cannot sell. In light of the current economic situation, I have put together a checklist to help landlords maximise their rental potential.
Research, research, research
Do your homework on the market in your area. Make sure you are charging the right level of rent and you are not pitching your property too highly.
Even during periods of increased demand, it is better to remain competitive and charge slightly less than the market rent. It is also important to advertise effectively, as tenants’ needs vary. For example, students will have very different priorities to young families.
Make your mortgage work for you
If you are struggling to meet your mortgage payments, or your circumstances change, talk to your lender and try to arrange a new repayment plan.
Should your deal be coming to an end, search the market for a mortgage that best suits your needs. It may be worth exploring commercial finance opportunities if you do not find what you are looking for with traditional buy-to-let lenders, particularly if you are a professional portfolio landlord.
Avoid the void
It is amazing how many landlords experience rental voids through lack of forward planning. Marketing your property before the current tenant leaves increases your chances of keeping it fully occupied. But a sure-fire way to minimise gaps is to retain good tenants for as long as possible.
Remember, it is always easier to keep an existing tenant than to find a new one.
Pick your tenants with care
Carrying out proper checks on prospective tenants should be standard practice for every landlord. Do not hand over the keys to your property before completing credit checks, bankruptcy searches and gaining previous residency information.
Together you are better
Landlords and tenants both benefit from a good relationship. Courtesy, reliability and availability will make for a happier tenancy all round. What starts with a small problem can turn into something costly if it is left. Communication is critical!
The golden rules
The list of rules and regulations governing landlords is long and still growing, but the risk to your reputation and bank balance is significantly greater if you do not comply. This includes lodging bonds with a government approved deposit protection scheme, as well as providing tenants with a valid energy performance certificate and gas safety certificate.
Taking a deposit is important, but protecting it is even more so. To make life easier when it comes to handing back the cash, draw up a clear and simple inventory that both you and your tenant agree to and sign. This should help avoid disputes at the end of the tenancy.
Are you covered?
Landlords need decent insurance against injury to tenants and their guests, the dreaded void periods, buildings cover and damage. Can you afford not to have the right policy?
Start a ‘rainy day’ fund
Life as a landlord is rarely straightforward and emergencies can crop up without warning. Putting some money aside each month will help take the sting out of expensive repairs, such as a new boiler or windows. If you have several properties, make sure you save even more to cover the inevitable.
Get decent advice
Getting the right advice is essential, whether you have been a landlord for years or you are just thinking about taking the plunge. The market is always changing and it is worth listening to the views of an experienced landlord. Joining one of the local landlord associations gives you access to useful information, a listening ear and sound advice.
There are several such groups locally, including the Sheffield Responsible Landlord’s Scheme and the Sheffield and District Landlord Association.
Stephanie Robinson is a solicitor specialising in property and commercial litigation at Sheffield’s Taylor&Emmet LLP. Tel 0114 218 4000 or visit www.tayloremmet.co.uk and www.landlorddisputes.co.uk.