Top 10 Mistakes Made By Landlords And How To Avoid Them.
1. Buying the wrong property in the wrong location at the wrong price!
The first, and one of the most important, decisions any investor has to make is which property to buy and where. Get this wrong and attracting tenants is going to be an uphill struggle.
“Investing in a buy-to-let is a big decision. But it needn’t be a hard one. Research the local area to find out about rental demand and make sure you invest in the right location.
2-3 beds are always in demand and are easy to let. Potential investors should look at long-term investment – the best investment properties are those that are going to go up in value so they can be sold for a profit.”
2. Getting the ‘wrong’ tenant
Troublesome tenants can be a real headache for a landlord, so choose carefully before anyone signs on the dotted line. Late payers, or those who don’t pay at all, and tenants who don’t look after the property during their tenancy need to be avoided.
A ‘good’ tenant is someone who pays on time, preferably by standing order, is happy to commit to a six-month (or more) rental contract and is willing to look after the property to a good standard, including the garden.
Credit checking, contacting their employers plus seeking references from their previous landlords can help you determine if someone would make a ‘good’ tenant. Meet them in person too, instinct alone can often make alarm bells start ringing.
And, don’t be tempted to take a gamble with a potential undesirable tenant just to occupy the property quickly. If you hear alarm bells ringing – listen to them!
3. Not making first impressions count
From the moment you first shake hands with a potential tenant at the initial viewing the decision process for them has already begun. He or she will be judging you and your property and trying to decide whether they would enjoy living there and whether they can trust you to be a good landlord.
Making the right impression in those first few seconds is vital. The property should look at its best from the approach and any front lawns or driveways should be immaculate.
Give the potential tenant confidence in you as a landlord too by developing a good relationship with the potential tenant as quickly as possible, gaining their confidence at this stage will help reinforce that you will be fair during their tenancy and will deal with problems swiftly and effectively if necessary.
4. Insufficient marketing
Shout about your property with a clever marketing campaign. No one’s going to rent your property if they don’t know it’s even available!
Be seen in as many places as possible, including web portals, local newspapers and on public bulletin boards. Be sure to have a ‘to let’ sign outside the property too. In any marketing material that you supply describe the property in full detail, including its unique selling points and attractive features. Use as many photographs as you can. And make sure these are taken when the property’s looking at its best (between tenants is often a good time).
Also, think about using visual aids, such as floor plans and walk-through movies to give potential tenants as much information about the property as possible.
But, above all, remember to continually assess the success of your marketing campaign – and don’t be afraid to adjust it if it’s not working.
5. Leaving your property vulnerable to the dreaded ‘void’
If you don’t plan ahead you could find yourself with an empty property and no tenant. Avoid the ‘void’ by marketing your property early and tying tenants into contracts with a three-month notice period if possible. Setting up long-term contracts of 12 months or more will also help to keep your property occupied – fewer changeover periods equal less opportunity for ‘voids’.
“Avoiding the void is essential if you want to be a successful landlord. You should always market the property in the last month of the previous tenant’s notice period and maintain the property to a good standard so that the property is easy to re-let too.”
6. Poor maintenance and upkeep
Would you want to live in a property with crumbling paint, leaky taps and old-fashioned decor? No? Neither would your tenant!
Make sure your property is bright and clean with neutral decoration and modern fixtures and fittings. Similarly, any appliances you are supplying should be modern and in good working order too.
“It’s a lot easier to attract a tenant if the property is well-maintained throughout. If the property’s a bit tired, you could paint the walls magnolia (even over wallpaper if necessary) and lay new carpets too. None of this needs to be expensive.”
It needn’t cost a fortune to bring your property up to an attractive standard, but it may cost you a fortune in lost rental income if you don’t!
7. Pricing the rent too high
In a flooded lettings market you need to be realistic about the rental return you can expect. Price yourself too high and you could well be pricing yourself out of the market! Check other rental prices of similar properties in the local area as a guide to what you should be charging. Don’t be afraid to drop the price if a potential tenant falls in love with your property but can’t afford the price tag.
Think about long-term investment rather than short-term gain – losing £50 to £100 a month is preferable to the property remaining empty.
8. Assuming the property will automatically let, and re-let
Just because you believe your property is the most attractive on the street or the cheapest deal in the local area, do not assume that it will automatically be snapped up. Being a successful landlord requires work and commitment and you must prove to your tenant that you’re 100% committed to making their life as a tenant with you as comfortable as possible.
Be up to speed with repairs and deal with tenant complaints swiftly and effectively. Complacency doesn’t win tenants and inaction positively loses them.
9. Not looking after the current tenant
Word of mouth spreads quickly and if a tenant has a bad experience with you it’s guaranteed that it won’t be long before he or she is sharing their dissatisfaction with others. Gaining a reputation as a bad landlord is sure to have a negative impact on your tenant turnover.
Similarly, if a tenant is pleased with the property and the service you’ve given, they will spread this news too. They may even be able to find another tenant for you themselves, or better still, they may stay on for longer than the original contracted period. In the current competitive lettings market the power of tenant retention cannot, and should not, be underestimated.
“You should be looking after the tenants you’ve already got. You can do this by maintaining the property to a good standard throughout the tenancy and acting promptly if problems occur or anything is reported. It’s also useful to find out why a current tenant is giving notice, often it’s something that can be sorted out fairly easily and the tenant will then extend their tenancy.”
10. Going it alone
Many landlords go it alone but another option could be to hand your property over to a property management agency, which could make your life as a landlord much easier. They may be able to source tenants for you, market the property on your behalf and organise all the paperwork, they can be on hand to advise you and give you essential information about the current lettings climate and what you need to do to make your property more attractive in a competitive market place. You would need to ask them what their services are.