The basics of being a good landlord
Being a good landlord can be challenging. With well over 500 laws and regulations to comply with in the UK, it can be difficult to ensure you tick every box – and the legal and financial costs of getting things wrong can be substantial.
Here are a few things to consider to keep you at your best.
1. Stay business-minded
While it may sound obvious, don’t forget that buy to let is a business. As with any other business, you should think about creating a business plan.
This will help you set clear goals and strategies to achieve them. Staying business-minded will also help you to keep focused on making a profit, not forgetting to put a price on your time. If a property isn’t financially successful, it’s probably best to sell it and re-invest somewhere else.
It’s worth remembering that if you don’t have time to do this, you can always outsource this work to an agent.
2. Target and choose the right tenants
We don’t need to tell you how problematic – not to mention costly – having difficult tenants can be. The dream tenants are the ones who pay their rent on time, look after the property and behave in a neighbourly way. So how do you make sure you get these kinds of tenants?
Just like with any other business you need to clarify your target market. If you want to attract a family for example, furnish and decorate your property with that in mind. You also need to make your advertising look professional and place it where your target audience are going to see it. Being available for viewings is another crucial factor, so make sure you’re flexible with your time and ready to answer any questions.
One of the most vital elements of finding responsible tenants is reference checking. No matter how trustworthy someone might seem, it’s crucial (and legally required) that you carry out background checks – TenantVERIFY is a useful tool.
We recommend a four point check:
- Identification from the tenant, containing a clear photograph
- Either a utility bill or a bank statement
- Credit check; clear of CCJs, bankruptcies and indicating confirmation of residency
- Confirmation of employment – a written employer’s reference on company letter headed paper confirming the tenant’s permanent and current employment and that their salary is at least a multiple of 2.5 of the tenant’s rent
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3. Get your tenancy agreement right
Apart from fulfilling legal requirements to protect yourself and the tenant, a professional tenancy agreement – such as one drafted by Landlord Action, part of the Hamilton Fraser family – will give your tenant a positive impression of you as a landlord.
Having a tenancy agreement can also impact your options for landlord insurance; a solid tenancy agreement is seen as a positive – and often a necessity – when it comes to securing insurance. Writing a full tenancy agreement from scratch can be time-consuming and complicated; if you haven’t already got a template and are prepared to draft one yourself, the Government’s template is the one to use.
Your agreement should include things such as:
- Cost of rent, date it should be paid and account details
- Amount of deposit required and how it will be protected
- Which bills will be covered by the landlord and which will be paid by the tenant
- Whether it’s possible for the tenancy to end early
- How often you will conduct inspections and the notice you’ll give
You can see the full list of what to include in your tenancy agreement here.
If you would like a Landlord Action solicitor to tailor the agreement for you we offer two packages which both include a copy of the template – find out more.
4. Get your tenant onboarding right
Moving into a new place is a big deal. The day your tenants move in may be the first time they’ve ever seen the property or been to the area. That’s why it’s important to make them feel welcome and help them settle into their new home. A simple and effective way to do this is to provide them with a comprehensive welcome pack.
This should include things like their legal requirements, a full inventory, things they may need to know about such as how appliances work, how to look after the house and garden, and some useful facts and tips about the local area. You might also want to leave them a gift just to make their first day extra special.
It’s also important to ensure your tenants’ deposit is properly protected in a deposit scheme such as mydeposits, or by using a deposit replacement scheme such as Ome, both part of the Hamilton Fraser family.