When we speak to clients regarding them renting out their properties privately and running on a “let only” basis there are a number of areas that they are usually unaware of or that they do not feel are important when it comes to managing their property. This is the first point they go wrong…..
- Lack of Legal Knowledge
There are currently over 150 legislations that govern the private rental sector and this is growing daily. If you aren’t aware of these how can you possibly be staying compliant? We ran a local seminar recently and it was a real eye opener to see how many of our clients weren’t aware of the intricacies of legislations such as the Gas Certification regulations and the Right to Rent rules. All of the legislations that surround the private rented sector all hold some kind of punishment whether that is a fine, rent repayment order or even a custodial prison sentence.
- Verifying your tenants (or not!)
When an applicant comes to us to apply for a property we put them through a series of references to confirm that they are a) who they say they are b) they can afford to take that property c) that they can handle their money well. It is my last point c) that usually catches people out, the credit check I would say is the most important of all the references. From it we can learn whether they have any outstanding debts with any utility companies, whether they are rated well with their credit score and if they have any CCJs (county court judgements) or Bankruptcies to their name. Managing money badly is the biggest issue we find when it comes to managing rental properties.
- 3P’s – Poorly Prepared Properties
By failing to prepare your property correctly prior to a tenant(s) moving in you are setting yourself up for failure when it comes to the end of the tenancy. Deposit Schemes are renowned for being very strict when it comes to guidelines for dilapidation etc so therefore don’t give them anything to consider a prior fault. Ensure your property has had a professional clean and paintwork has been freshened up if necessary, get a gardener round to tidy the garden up (get the receipts!!) if you can EVIDENCE that you have carried out these types of works prior to move in then the deposit schemes are much more likely to agree with you when it comes to deposit disputes. Additionally with the introduction of the Homes Fitness for Human Habitation Act 2018 we cannot afford for there to be any faults with a property prior to move in as this may hinder you if you wish to regain possession of the property further down the line.
- Not so Regular Inspections
I asked a group of self managing Landlords how many carry out interim inspections/property visits (whatever you wish to call them!!) the answer across the board was “well I pop in now and again to ensure everything is ok”. That is NOT sufficient when it comes to managing a property. Not only have we now got the Homes Fitness for Human Habitation Act 2018 to contend with which requires all Landlords to ENSURE that a property is fit for purpose at the start of a tenancy AND during the tenancy (this means you cannot rely on the tenants reporting all maintenance issues, because lets be honest…. they don’t!) you also have to consider the Right to Rent Act which means that Landlords have a duty to be able to confirm that all occupants residing at their property have a legal right to rent in the UK… so you need to be checking that your tenant isn’t sub-letting to anyone without the required documentation as YOU ARE LIABLE. We undertake inspections every 6 months to ensure the property maintenance is kept up to date and that everyone living at the property is who they say they are and supposed to be there.
- Invisible Audit Trails
So you are 7 months into a tenancy and your tenant is persistently denying you access and not paying rent on time and playing loud music into the early hours. Not only that but you’ve got a leak from your hot water cylinder and they won’t let you in to fix it. You’ve called them a number of times about it but they haven’t improved and still won’t allow you access so that’s it.. you are serving them notice you want them out. Being the type of tenants that they are they take their notice straight to the council and say you haven’t attended any of their repairs despite them reporting it and are claiming a retaliatory eviction the council contact you and you have no record of your communications to the tenants…. your section 21 notice gets thrown out and you cannot issue another notice for 6 months and surprise, surprise they only pay you half the rent a month. We have an automated system that logs all communications from tenants so that we can track what they have/haven’t said and what we are doing in response to that. If you are not recording when your tenants contact you and the contents of the conversation and your actions following that you are leaving yourself in very sticky territory when it comes to trying to remove the tenants or having to provide PROOF of your actions/conversations.
- Not getting the most for your money
How do you know how much your property is worth on the market? Have you looked through Rightmove, Zoopla & Onthemarket and seen what similar properties are marketed for? That isn’t a successful marketing strategy firstly, just because they are marketed at that rate doesn’t mean that, that is the figure achieved. If you incorrectly market your property and it ends up being vacant for a month how long is it going to take you to recoup that extra money? We also need to look at whether some small improvements in the property would actually make a big difference to the value and if so get that implemented as quickly as possible to ensure your void gap is as small as possible.
- Not using reliable contractors
Finding quality contractors that complete the work to standard that you have identified as acceptable and within timescales that you have discussed is essential. You also need to ensure that contractors know/understand what kind of etiquette is expected of them when it comes to dealing with the tenants. For example our contractors know to only discuss or entertain comments/issues with the problem they are there to attend. If the tenants have additional problems they must report them to us directly therefore we don’t end up with expensive unexpected bills from contractors for works we haven’t instructed.
These are just 7 of the potential mistakes that Landlords are making there are probably hundreds more and with the legislation ever growing are you really in a position to self manage your property?