There's never been a better time to be a landlord
How do you ensure that you have angelic tenants, who pay the rent and keep the property in pristine condition?
Here are a few simple tips will help keep landlord/tenant relations on track.
Number one golden rule: never fall in love with the house that you're going to buy and let out. This business is all about yield and mathematics. Don't get your heart on one property - identify 10 that are suitable, and maybe you'll get one.
Another golden rule is not to be too nice to your tenants. You need to know if something has gone wrong, because you'll have to pay to put it right. But you should maintain a bit of professional distance, otherwise your phone is going to ring all the time,with tenants asking for new beds and washing machines.
One idea is to go through all the usual credit reference checks, ask for personal guarantors and make prospective tenants sign a tidiness contract too. However nice tenants seem at the start, it's best to get them to agree to the house rules: no smoking, maybe no outdoor shoes, and regular cleaning. Make them sign each page of the contract then if they fall down on their side of the bargain you have the paperwork to back you up.
Face-to-face contact is essential. It's not just to complete paperwork and collect rent that landlords visit their properties. It's also to carry out maintenance and repairs. Doing these yourself does enables you to keep an eye on the place - as well as saving a fortune.
A letting agent will take on the work of finding suitable tenants, draw up contracts, collect rent and oversee maintenance. But in the finely-tuned balance of income and outgoings, using an agent will make profit margins tighter.
Make sure you show the property a bit of love and tenants are likely to respond in kind. If not - they're likely to move out.
And if they move out, you're likely to get what every landlord fears: a void time. This is the time to take a hard look at the property and see what needs improving. It costs, but is well worth it in the long run as it means you'll get a new tenant sooner and even keep them longer.
The final golden rule of being a landlord is that you can't just sit back and expect the money to magically appear in your bank account. Tenants have feelings too, and it pays to look after them.
That said, you must be careful about the people you employ to do the work. Do your research thoroughly, and remember that reliable workmen are often better value overall in the long run than cheaper ones.
While most landlords manage to remain on friendly terms with both tenants and tradespeople, some find it hard. The pressures of being a landlord - and the sums involved - mean it can be difficult to stay best friends with the people around you.
One comfort, of course, is the money. The buy-to-let still produces healthy returns on the right properties. If you look for an area with a thriving jobs market and good transport links, then you can't go far wrong.
With interest rates near to zero, and the rest of economy continuing to splutter, it's harder than ever to get a return on your investment. Luckily for landlords, bricks and mortar still still going strong. When it comes to property, it's time to join the club.
- National Landlords Association (http://www.landlords.org.uk/): support, information for landlords old and new, plus help with contracts documentation and certifications. The National Landlords' Association provides courses and advice to members and non-members alike, steering them through 50 different Acts of Parliament that relate to landlording.
- Landlord Action (http://www.landlordaction.co.uk/site.php/0333-240-9750?gclid=CJ2JqdPG-rcCFfLHtAodYyYAqw): Free helpline and practical assistance when it comes to moving on tenants.
- Association of Residential Lettings Agents (http://www.arla.co.uk/): get access to ARLA's nation wide directory of approved anbd indemnified letting agents.
- I Am The Agent: online property rental service, whereby you advertise your place for a fixed fee.
- Also the Telegraph has a fortnightly Property Club email bulletin for landlords and property investors (news, statistics, offers and tips)
And some final tips
So you want to be a landlord:
- Buy properties no more than 40 minutes' drive away. Or be prepared to employ a letting agent.
- Research the area. Don't just drive around, spend a few days there, talking to residents, shopkeepers, estate agents, people in pubs.
- Check your tenants' references. How genuine are they? Could they have been faked by a friend? Is their previous landlord giving them a good reference just to get rid of them?
- Get a guarantor's covenant, preferably from a relative; someone who can vouch for the tenant's character.
- Don't be a stranger Introduce yourself in person to your tenants to help form relationships.
- Beware cash up front. It's tempting, but someone offering six months' rent in advance, in £10 notes, may be hiding something.
- Build a team of electricians, plumbers, carpenters, boiler-repairers and decorators whom you can trust. They will save you money later.
And here's an interesting link - why you might be turned down for a mortgage: http://www.rightmove.co.uk/news/articles/property-news/5-reasons-you-might-get-turned-down-for-a-mortgage