With so many favourable articles of late proclaiming the positive merits of investing in buy to let properties, a novice landlord might be forgiven for thinking that owning a rental property is an easy way to make cash.
But the reality is somewhat different. The potential for earning a healthy profit is almost certainly there, but there are also many pitfalls on the road to becoming a successful landlord. So before you acquire a massive headache, learn how to avoid common landlord mistakes:
Mistake #1: Get a letting agent
If you know nothing about letting property, consider paying a professional letting agency to manage your property. The fees will bite into your profit margin but in the event of any problems, they are first in the firing line.
Mistake #2: Don’t rush into choosing a tenant
Never make the mistake of assuming a bad tenant is better than no tenant. An empty property might be highly undesirable, especially if rental payments are required to cover a mortgage, but a bad tenant could end up costing you thousands in damages, plus they may run up huge rent arrears and then abscond.
Mistake #3: Vet your tenant
On a similar note, ALWAYS check references thoroughly. Just because a tenant appears to be nice and respectable, it does not automatically mean they ARE nice and respectable!
Mistake #4: Get permission from your lender
If your property is subject to a mortgage, ensure the lender is aware you are letting it. This is a common mistake people make when letting their home for periods of time. A failure to do so could invalidate any insurance policy you have on the property.
Mistake #5: Get landlord insurance
Do not be tempted to cut corners on landlord insurance. A good policy might prove to be essential if you fall victim to #2 on our list.
Mistake #6: Get a deposit
Always ask for a decent deposit to cover the cost of potential damage to the property. Eexpensive cleaning and repair bills at the end of a tenancy are a big problem for many landlords.
Mistake #7: Draw up a clear tenancy agreement
Overdue rent is a very common issue faced by landlords, so make sure you have a clear tenancy agreement drawn up with the rent due date highlighted to avoid confusion. If a rent payment is late, take immediate action to resolve the problem.
Lawpack publishes a range of bestselling Tenancy Agreements