If you have recently entered the buy-to-let market for the first time, here are a few tips to help you ensure that you property investment is a success.
Where do you start?
Know the law
Like anything else, being a landlord involves following the rules and guidelines set in place by the law to protect all parties involved. Know these rules. Do research. There are few things worse than sinking money into a project, only to have previously unknown legalities prevent a profitable return.
Landlords have specific responsibilities. The property they are renting must be repaired and maintained according to regional and city law. Unless there is an emergency, landlords must give a 24-hour period of written notice before entering a tenant's home.
Also, the visit must take place between the hours of 8am and 8pm. Landlords must provide access to all vital services, such as electricity, hot and cold running water, and heat or fuel and they lack the right to shut it off. The amount the tenant pays for these services is usually agreed upon in a prior agreement.
Landlords are required to present a copy of the tenancy agreements or lease as well as, if asked, rent payment receipt free of charge. If you are unsure of any legal guidelines, it is best to consult a lawyer.
Prepare for costs
If you still believe that the difficulties of renting out are for you, check your bank account. Although becoming a landlord may seem like the way to make a quick buck, it also is the way to spend a quick buck.
A landlord is a businessman. Renting is a business, one that requires time, money, personal commitment, and investment. There will be costs to it that you did not foresee. For example, property taxes on a property that is being rented out are usually higher than those on your regular home and maintenance costs add up very quickly, and more so when it must be delegated.
Additionally, landlord insurance is essential to remember when considering costs. There are tenancy agreements to be considered and accounts to be recorded. Sometimes landlords require extra help for these matters and must hire an accountant or property manager. Considering all these things will prevent you from disaster later on.
Consider your tenants carefully. As a landlord, you have the right to be picky over your tenant’s characteristics.
Discrimination according to race, ethnic origin, religion, sex, sexual orientation, gender expression, colour, age, citizenship, family status, marital status, or disability is illegal. Still, your rights as a landlord include using income information, credit checks, credit references, and rental history as a reason for accepting or rejecting tenants.
As a landlord, you will not want tenants who withhold rent, damage property, conduct illegal business, or disturb others. Since there are laws regulating how and when you can evict tenants, it is important to be certain that your prospective tenants are the ones you wish to be handling your property for the foreseeable future.
Evicting tenants is not a simple matter. Numerous laws dictate when a tenant may be evicted.
According to UK laws, illegal eviction of a tenant includes not giving your tenants the correct amount of notice, changing the locks or evicting your tenants without a caught order.
Tenants may only be evicted for, not paying rent on time, extensive repairs need to be made to the property, breaching their contract, causing damage to their landlord's property, anti-social behaviour, conducting illegal activity on their landlord’s property, and giving false information (fake references or credit checks).
Owners of the rented property may also evict tenants for the personal use of the property by themselves, their families, or the caretakers of them and their families. In the case of eviction, written notice must be served.
Different places will have different rules, and some have more demands than others. It is important that you check your area’s laws before becoming a landlord.
Prepare Your Lease
The business relationship between a tenant and landlord is cemented by either a tenancy agreement or a lease paper. It is very important that such a document clearly outlines the wishes of both sides and is firmly agreed upon. When drawing up this document, you should be sure that the terms of it work for you.
Check that all is according to the laws of the region. Be clear about your own rules for your property, especially if you will be sharing a common space, such as the kitchen, be specific in your demands.
If smoking bothers you, forbid smokers, and if you go to sleep at eight, disallow loud noises after eight o’clock. Being specific with what you want will keep both of the parties from suffering in the future.
Advertise Finding tenants is not hard. If you are worried about how to get tenants, make a good advertisement. A tip for advertising is knowing who to advertise to. Most renters are in their twenties and looking for something cheap and convenient while they study in college or start their first job. Keep your advertisement targeted toward the typical renting demographic.
We have discussed responsibilities, potential problems, tenants, evictions and even legal documents. At this point, becoming a landlord is starting to daunt you. Perhaps you are just a humble homeowner with an extra room, or maybe you simply need a little more cash to help you pay off your mortgage.
You are thinking, “All these guidelines are for people who want to start something new: I just want to make an extra buck.”
If you feel discouraged after reading all these dos and don'ts; take heart. You can start small scale as well. The above guidelines are just that: guidelines. You can use them for that extra bedroom you cleaned out after your kid went to college. All you need is the room, the knowledge that you aren’t doing anything illegal, a tenant, and an agreement with said tenant.
Don’t stress about it
The last tip is one you should apply in every part of your life. Have faith in yourself and your renters. Good luck happens more often to those who are happy. Being landlord might not be for everybody, but if you are willing to put in a little hard work, it can be for you.
By Beckie Jordan.