Developments in technology have extended access to property markets far beyond an investor’s local vicinity. However, property management is the key to long-term success. Keeping abreast of new legislation, landlord and tenant liabilities together with the need to control costs are all part of the modern day landlord’s role. So how do you manage your properties from a distance?
Draw up a detailed tenancy agreement
While many believe that tenancy agreements are simply a means for landlords to take control, this is not the case. A detailed tenancy agreement ensures that both sides, landlords and tenants, are aware of their responsibilities and liabilities. It will cover issues from payment of rent to repairs, property inventory to codes of conduct. A countersigned agreement indicates that all parties are aware of their liabilities/responsibilities and should be recorded and stored.
Deposit protection schemes
The UK government passed legislation for the creation of deposit protection schemes to protect the initial deposit of tenants. It is vital that everything is down on paper, signed and countersigned to show that deposits have been paid and transferred to the relevant protection scheme. In the event that there are issues when a tenant leaves a property, any deductions should be recorded and all parties informed. The use of authorised deposit protection schemes is now a legal obligation for landlords.
Communication with your tenants
To what degree you should communicate directly with your tenants is a subject on which many people have differing opinions. In a perfect world, there should be a line of communication between landlord and tenant which allows problems to be discussed and solved in a timely manner. For example, if a tenant has short-term cash flow issues then it may be in the landlord’s interest to offer a degree of assistance. This would avoid the costs of eviction and advertising for a new tenant. A monthly phone call or perhaps email communication to check that all is well can help to avoid any major issues in the future.
Maintenance and non-emergency repairs
Where you have rental properties outside of your immediate area it would be sensible to schedule maintenance and non-emergency repairs well in advance. This ensures that tenants are given the opportunity to be present when work is carried out. If for some reason the tenant was not available then the landlord would have sufficient notice to rearrange their schedule. Arranging work on a rental property without consulting the tenant is a recipe for disaster.
Visiting rental properties
When you consider that landlords will have invested a significant amount of money into their rental properties, it makes sense to carry out regular checks. We are not talking about long drawn-out visits, more of a quick look around your property (inside and out) to check all is well. Landlords will need prior approval from their tenants as to turn up unannounced could be seen as an invasion of their privacy. It is also vital that you ensure a record is kept of the general wear and tear and other issues which may have arisen during your visit. Where appropriate, discuss any issues directly with the tenant.
Building a network of property contractors
If you have worked with property contractors in the past who have carried out repairs and maintenance to a high level, at a reasonable price, it makes sense to use their services in the future. Over time you will likely be able to build a network of property contractors to cover everything from electrics to plumbing, gas checks to general maintenance. As the trust factor builds between landlords and contractors grows, it may save time encouraging tenants to contact them directly. The contractors would still report to the landlord but this would save time and ensure repairs/maintenance is carried out as quickly as possible.
Keeping abreast of legal obligations
Over the last few years we have seen significant changes in the legal obligations for both landlords and tenants. It is therefore vital that you keep yourself abreast of regulatory changes and consider how they may impact your investment returns and property management going forward. Unfortunately, issues such as eviction will likely rear its head at some point. For example, a failure to follow the eviction process to the letter of the law can not only be costly and time-consuming but could lead to legal challenges.
Property management companies
There will be occasions where time constraints, a growing portfolio and simple distance mean it is impossible for landlords to efficiently manage their property investments from afar. This is where the role of property management companies comes into play. They will carry out regular checks, collect rental payments and manage the repair and maintenance of property. They should also be able to offer guidance and assistance on practical and legal issues. While there is obviously a management cost, for many landlords this is a price worth paying to protect their investments.