First Time Landlord
Experience as a first time Landlord was quite a learning curve. Would I do it again I ask myself? Possibly, but I would do many things differently, and some not at all! Having sold the property on, I thought it would be useful to share what I learnt so that other Landlords can avoid the many potential pitfalls.
What to look for in a buy-to-let property:
- Location – probably the most important thing. Try to choose a property that’s in a popular area, close to a school (for a family), within walking distance of a town (if that’s important) and has good travel links.
- Be realistic – establish your budget, taking into account legal fees, estate agency fees and potential property repairs. If the property needs upgrading, for example double-glazing, add that into your budget too. Think about what repairs and upgrades actually need to be done.
- Budget – if you can afford it, consider a family home with two or three bedrooms. This size (in most cases) will give you considerably more monthly rental income than a flat. Also, if you purchase a flat you (the landlord) will be responsible for paying the ground rent and any other maintenance fees. It all adds up and will eat into your profit.
- Negotiate – don’t be afraid to negotiate the asking price, especially if the property has been on the market for a while. You might be pleasantly surprised! Roughly a 10% discount is considered appropriate.
- Survey – if you are worried about potential problems, it’s best to ask for a more detailed survey. Be sure to find a surveyor with good online reviews. We recommend Downlands Architectural Design & Surveying in Framfield. If the survey does highlight problems, it’s wise to investigate further early on, then if you need to, pull out!
- Solicitor – it makes sense to choose a reputable solicitor too. One that’s local helps, particularly if you come across issues during the process. Don’t be coerced into choosing one that you don’t know, even if the agency recomends them and has leaflets. They may be on commission!
- Check the sums – don’t assume that invoices are correct. Sadly, we had to query the solicitor’s invoice three times before they got it right! The same applied to the final completion invoice!
After purchase:
- If the property needs upgrading, or requires work, think about the quality of what’s required. There is no need to spend a lot of money on a new kitchen and bathroom, if they’re fine as they are. The same applies to decorating and carpets. The important thing is that everything works, is clean and in good condition. When you sell the property on, that’s a different matter!
- Two upgrades that are worthwhile, will make your property more desirable, and will add value when you sell it on, are double glazing and central heating. If you have a gas fire and/or central heating, you will need a Gas Safety Certificate.
- You also need to purchase landlord and contents insurance for peace of mind.
- If the property does need work, inside or out, do it before you show any potential tenants around, as ‘work in progress’ such as decorating or scaffolding can be off-putting.
Tenant Finding and Management
- Agency or do-it-yourself? If you use social media, finding a tenant can be relatively easy, however, if you want to ensure a good quality tenant with a faultless credit rating and references, an agency is the way to go. They will either just find a tenant for you or manage the property for you. Fees are according to the level of service. I would always recommend using an agent, at least to find a good tenant for you.
- If you choose to manage your property yourself, ensure that you keep on good terms with your tenants. I would recommend doing a bi-monthly or quarterly inspection of the property, so you can keep an eye on things and avoid any potential problems.
- Pets – Many people have pets nowadays, however, to keep your property looking good, it’s better not to accept pets (even if well-behaved!) as they can damage your property (new carpets is a common consequence and could cost £100s).
- Resist the temptation to all a friend or relative to become a tenant. It could damage your relationship if you have problems down the line.
- If you’re managing the property yourself, create an inventory, including photos.
- Issues – if there are any maintenance issues, find out what caused them. For example a blocked drain is usually caused by misuse and is therefore the tenant’s responsibility to pay to have it unblocked.
Why use a letting agent?
It’s the agent’s responsibility to sort out any problems, including maintenance and repairs.
A letting agent will:
- Advise you on how to prepare your property prior to letting.
- Ensure you meet the legal obligations.
- Find the most suitable tenant for your property quickly.
- Advise on the potential rental income and do any negotiating for you.
- Organise an inventory and deal with the deposit for you.
- Arrange tenant referencing and credit checks.
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If you would like to be a Guest Blogger, contact Sue on 01825 761890 or email sue@sjemarketing.co.uk.
