Not having the law on your side
Being a landlord isn’t as simple as a handshake. It’s a legally complicated process. For one, you have repair and insurance liabilities. Rent deposits have specific ways they need to be handled. Do you know all your legal obligations? How about what you need to put into a tenancy agreement? Or how to legally solve disputes?
It may be your house, but your tenant has rights that you need to understand and abide by. Overplaying your hand is an easy way to get in trouble. A new landlord needs good advice on their side. Teams like Lennons Solicitors can make it easier to understand what’s involved and help you stay on the right track.
Not knowing how to market
Yes, there are more people in need of a place to rent than rental homes available. The market is in your favour. But never, ever assume that you’re going to have tenants in your home without putting any effort out. You have to know how and where to market your home. To understand the house and its area and what kind of people it will attract. Use a diverse range of strategies to catch as much attention as you can.
Not vetting your tenants
Market right, or partner up with the right people, and you’ll start to get tenants. Don’t jump at the first people who want to rent your place. You want a tenant who is responsible, with the least risk of causing damage to the home. They vet your home, so you should vet them as well. Start to recognise warning signs and decide how much you’re willing to put up with. Some landlords are happier to accept pets and children; others aren’t. It’s about finding your boundaries.
Not preparing for the work involved
It’s not a hobby. It’s an investment. It can certainly be a rewarding and even fun investment, but if you treat it like a hobby, it can lose you significant amounts of money. For example, if you’re not trying hard enough to find tenants, you can easily end up with an absent home that’s draining your resources. If you don’t prepare improvements and repairs for the home, it will undoubtedly decline in value. If you don’t organise a cash flow, you won’t know whether or not it’s even making any money. A letting agency can help in a lot of these tasks if you don’t have the time. Just don’t neglect them.
Hopefully, all the above points make sense to you in your plans to become a landlord. They’re vital to understanding how to make your buy to let investment a profitable one.
Site last updated: 2. April 2020