We all know that the buy to let market in the UK has been extremely buoyant over the last few years. This is a market which is likely to continue to grow because of growing demand against falling supply. So, if you are looking long-term with regards to your property investments are you ready to be a property landlord?
Know your obligations as a landlord
In theory the idea of buying a property, renting to tenants, collecting the rent and sitting back, probably catches the eye of many of us. It is obviously not as easy as that but if you are prepared, you know the regulations then there is no reason why you cannot build yourself a good-sized rental portfolio. Many people choose to employ third parties to act on their behalf but there are obvious costs associated with this option.
There are obvious obligations with regards to legal agreements, deposits, safety of the property, regular checks not to mention other issues such as overcrowding. Other options such as HMOs (houses in multiple occupation) can be a little more complex but also extremely lucrative if managed correctly.
Know the rights of your tenants
The days when a tenant could literally be “kicked out” for a disagreement with the landlord have long gone. The buy to let market is enormous and this added investment has prompted an array of new regulations. While many people believe the politicians have gone overboard with regards to the rights of tenants, we live in a very different environment today. Legal agreements are now required for tenants, deposits are to be held separately and the process of eviction has to be made clear.
It will depend upon how active you are in the buy to let market but there will likely be situations where you have “difficult” tenants. As long as you are covered by the eviction process in your legal documentation, and it is fair and above board, you do have legal redress in the event of non-payment of rent, damage to the property, etc. Some eviction actions will end up in the courts and unless your agreement and processes are watertight there is a chance that the courts will side with the tenant.
Communicating with your tenants
While some buy to let investors prefer to set out the details of a rental arrangement and have little to do with their tenants, some prefer to take a more active role. As we touched on above, there will be situations where there are disagreements, perhaps issues with the rent or alleged damage to the property. It is far better to communicate with your tenants if they are having issues than letting everything build up until it becomes a straight fight between the landlord and the tenant. At the end of the day, you would rather have a reliable long-term paying tenant even if perhaps they have the odd issue or two over the years.
The vast majority of disagreements can be ironed out fairly quickly if tackled at an early stage. Don’t forget, every day that your house is empty is lost rent, every time you have to advertise for a new tenant there is a cost not to mention the cost of your time. It is therefore advisable to keep in regular contact with your tenants to ensure that you are aware, as soon as possible, of any issues which may impact you. Hopefully both parties can then agree a solution and acceptable way forward – retaining your vital income stream.