The first time you take the leap and begin renting out your property to tenants can result in a mix of emotions; excitement, a sense of accomplishment and nerves. You want everything to go successfully and smoothly whilst you don’t have the experience to fall back on.
You’ve done all your researching and reading but you’re feeling a little overwhelmed - there’s a lot to remember! Here’s a breakdown of the most important tips for first time landlords to safeguard yourself (as much as you can) against things going wrong.
Screen your tenants thoroughly
This is super important. With good tenants comes good tenancies, less worrying, less problem-solving and less headaches. For your first tenancy at least, you’ll want to avoid tenants with bad credit scores, bad references and criminal records. It’s always better to play it safe whilst you’re starting out. For reference, an excellent credit score is anything above 750. Bad credit is anything below 600. Scores between 600 and 750 range from poor to good.
Be careful that you never fall into the trap of illegally discriminating when rejecting tenants. You can reject a tenant over their income, references, credit history or their current state of employment, but you cannot reject someone over their marital status, being pregnant, their age or any of the ‘protected characteristics’ such as nationality, gender identity, sexual orientation, disability or religion.
Chase that rent
Collecting rent on time needs to be a priority. Your rent is your revenue so make sure you pursue any late payments and late charges. The minimum a tenant should do is meet their rent payment obligations and it’s okay to make this clear. Although you always want to remain friendly and accommodating as a landlord, ensure that getting rent on time is serious business.
Stay on top of legislation
Landlord legislation is extensive and it’s always changing. Stay in the know and keep on top of your landlord legislation admin. There can be serious implications to failing to comply with rules and regulations around everything from landlord tax, to property safety, to inspections.
If you’re unsure whether you know your stuff or not, check out CIA Landlord Insurance’s landlord legislation quiz to test your knowledge. If you score low, don’t worry - you can download their whitepaper at the end of the quiz to read up on everything you’re not sure about.
As much as it’s important to keep your property looking fresh, clean and make it stand out from the competition, you don’t want to invest money in the wrong things. Some landlords will spend crazy amounts on installing marble worktops, expensive carpets and luxurious curtains, but these things don’t necessarily equate to more value.
Focus your attention on the kitchen and bathrooms as these are the key selling points in a property. Keep things neutral to appeal to the masses and perhaps look at adding in a few unique quirks such as a smart security system, ensuite or outdoor storage space such as a shed ; something that is useful for the tenant and sets your property above the rest.
Spend time on your tenancy agreement
Putting together a tenancy agreement isn’t the most exciting of tasks, but it’s definitely worth it and necessary. If you encounter issues and disagreements, your tenancy agreement will be the thing you fall back on and look at to resolve things. It details everything that was agreed to at the start of the tenancy.
There’s plenty of templates online that you can use to build your tenancy agreement. Just make sure that you’re using one for the right country! You may have to add in things like pets and smoking clauses and other specifics to tailor the agreement to you and your requirements.
Keep your tenants happy
Be a responsible landlord. Respond to issues quickly and don’t leave your tenants in tricky situations. Also, don’t be overbearing and make sure you give your tenants space. Your home is now their home. Unfortunately, many landlords give the industry a bad name for not taking that fact seriously.
If you look after your tenants, they will look after your property. Happy tenants will stay with you for longer and possibly be happy to pay increased rent payments over time. You’re sure to reap the rewards if you respect your tenants, take your responsibilities seriously and if you’re savvy with your money.
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