07 Aug 11 Tips On How To Be A Good Landlord
Landlords don’t always get a good press.
You only have to type the word “Rachman” into Google to see the number of complaints there are about landlords. The word has become synonymous with high rents and low service, and they are not alone in this category. Being as Express Conveyancing acts for hundreds of Landlords with their Conveyancing, we have decided to write about the topic on how to be a good landlord.
There is an endless list of cases involving unscrupulous landlords who overcharge their tenants on the grounds that tenants are unlikely to do much about it.
If you have 100 tenants, and you overcharge them all by £100, on their own it’s not worth their while arguing, but cumulatively the landlord is £1,000 better off. Of course if the tenant refuses to pay, the landlord probably won’t chase them, but at some point the tenant might want a reference from the landlord and so might pay up.
If it’s a long term lease, the tenant will want to sell, and won’t want the new owner to know that their landlord is difficult, and so are likely to pay up to ensure the smooth sale of the property.
Landlords have a great deal of power, but with great power comes great responsibility. Courts are willing to sanction landlords who do not honour their obligations.
There are, of course, plenty of good, reliable, honourable and trustworthy landlords, some of whom probably feel that they are the ones that get the raw deal.
For example, residential tenants have a large amount of protection from the courts. A tenant, no matter how bad, cannot be evicted from the property without a court order, which can take four to six months by the time you’ve served notice, waited for the notice to expire, issued proceedings, obtained your order, and got the bailiffs in to carry out the eviction. If the tenant has stopped paying rent in the meantime, you can be thousands of pounds out of pocket, not to mention the legal and court fees and any damage done to the property. You will hopefully have a deposit, but its’ unlikely to be enough to cover all of your losses and expenses, and the chances of the tenant being worth pursuing (if you can even find them) are not great.
Which might make you think that it’s not worth the effort of being a landlord. Certainly with changes in taxation, and a slow property market, many smaller landlords are offloading their rental properties at the moment with a view to investing their money elsewhere.
So that may mean that now is a good time to be getting your foot on the property investment ladder. We can’t give you financial or investment advice, but it doesn’t take a genius to work out that if property prices are going down, now might be a good time to become a landlord. And yes, it does contain an element of risk (what doesn’t!) but if you plan properly, you can reduce or even eliminate some of that risk.
Here are some tips we’ve learned from our experiences about how to be a good landlord, whilst still protecting your investment.
- Do credit checks on your proposed tenant. In particular, find out where they work and what they do for a living. If they do move on from your property without paying up to date, having a work address may be useful for contacting them. If you know what industry they are in, you may be able to track them down if they move jobs.
- Get a reference, such as from their last landlord or from their employer. Find out if they are reliable (particularly when it comes to paying rent on time) and if they left their last property in good condition.
- If possible, meet them yourself or have someone meet them for you. You can learn a great deal about someone that you’ve seen in person.
- People with children and/or animals might make more mess, but they find it harder to find landlords who will be willing to take them, so they might be more loyal to you. You can always take a bigger deposit to cover any potential damage.
- Do regular checks on the property. If the tenant is keeping it in good condition, it will reassure you that they are reliable. If you notice signs of trouble early, you’ll be more proactive. It’s also a good idea to read the tenancy agreement carefully and highlight the tenant’s responsibilities such as if they are responsible for keeping the garden in good condition, and then make sure that they do.
- If the tenant is contributing towards the service charges, be as transparent as possible. Make sure that the tenant knows how you’ve reached your figures, what steps you took to ensure that you’ve shopped around to get the best deal. That doesn’t mean that you have to go to their preferred supplier, there has to be a limit, but if they are certain that you are on the level, they are less likely to argue and so be more likely to pay.
- Don’t claim for things you’re not entitled to. That probably sounds obvious, but you’d be surprised at how many landlords try it. It’s common for landlords to claim things like interest and costs on arrears, but unless the lease or tenancy agreement specifically entitles them to make those claims, they are simply not entitled to the money. If the tenant refuses they can take you to the lands tribunal who do have the power to award costs against you. There are also plenty of on line forums where tenants discuss landlords, and if your name becomes associated with less reputable practices, you may find it harder to let your properties.
- Make sure you are able to have maintenance carried out on the property. You don’t have to do it yourself, but it’s a good idea to have a local team of reliable tradesmen that you trust, who can come in and do both routine maintenance and emergency work. Not only will this increase the chances of a good relationship with your client, but if the property is in disrepair, this could give the tenant a legitimate legal reason to stop paying rent until the repairs are concluded. You also may not be able to evict a tenant if there is disrepair. So getting repairs undertaken promptly and to a reasonable standard can save you money in the long run.
- If you can’t look after the maintenance of the property yourself, it may be better to appoint a managing agent who will do it all for you. They will charge a fee (obviously) but that is likely to be preferable to having an unhappy tenant. Having said that, you do need to pick your agent carefully. Some will provide you with a reliable and cost effective service. Others do sometimes have connections with tradespeople that is too close, so that work done at your property might cost more than it should, so be vigilant and don’t be afraid to ask questions and challenge decisions. For example, if the agent contacts you and says that the tenant has informed them that the fence has come down, and they have quote for the works, check that it’s your fence that has come down (and not one that is the responsibility of the neighbour) and whether you’re obliged to pay the costs of putting it back up.
- Remember that communication is often king. If the rent is late, get on the phone to the tenant as soon as possible. It may be that there’s an innocent explanation, but the sooner you know what’s going on the better. If you are unhappy with how things are going (such as the way they are looking after the property) then consider organising a meeting with the tenant or having your agent do it for you.
- Make sure that any deposit you have taken is properly protected. In residential property cases you are under a legal obligation to protect the deposit using the deposit protection service. If you fail to do so, you can be liable to pay your tenant compensation of up to 3 times the deposit.
Disclaimer – our articles are designed to give you guidance and information. There is no substitute for proper direct advice, particularly as everyone’s circumstances are different. If anything in this article may affect you, please contact us for advice that is specific to your circumstances.