Three areas of responsibility buy-to-let landlords must be on top of
For buy-to-let landlords, success doesn’t only depend on buying the right property in the best location. Of course, this is an essential factor in your success, but it doesn’t stop there. You’ll need to manage your tenants, your property and your finances.
Managing your tenants
From vetting tenant applicants to chasing late rental payments, responding to midnight requests to fixing a dripping tap, to evicting tenants from hell, managing tenants is a difficult task. You must be a people person, detail-oriented, and understand the landlord law inside out. Get one thing wrong or say one thing wrong, and you could be up the proverbial creek without a paddle – and with a hole in your canoe.
You’ll need to stay in line with the Right to Rent law, while ensuring that you don’t discriminate against tenants. You’ll need to show empathy while being tough, and be friendly but professional, to develop a good, working relationship that keeps your tenant in line and on your side.
Tenants can be demanding, and landlords must manage those demands. You’ll need to handle situations carefully and cautiously.
Perhaps hardest of all is increasing the rent you charge to good tenants – you don’t want to upset the apple cart, but your costs are rising and you need to remain profitable. You’ll need to arm yourself with market knowledge, and then explain the rental increase in terms the tenant can understand. If you don’t, you could suffer the loss of a good tenant and a costly void period while trying to find a replacement.
Managing your property
The government has been toughening up on the private rented sector in the last few years. Many new regulations have been introduced, and others updated, that affect how you must manage your property. Your first challenge is to ensure that you know these laws and don’t fall foul of them.
Managing your property is not simply about reacting to tenant repair reports. You’ll need to be proactive, and carry out regular maintenance to keep your property in good order (and reduce the costs of more serious repairs caused by lack of maintenance). You must also ensure that gas safety checks are conducted each year. And this is just the tip of the iceberg. Your property must be fit and habitable – and this means it must be safe. This is where local authorities can take you to task: you’ll need to make sure you comply with health and safety rules for buy-to-let properties.
Managing your finances
The most successful buy-to-let investors make sure they retain a tight hold on their finances. They reduce costs wherever possible, claim every expense they can, and regularly review their largest expenses (especially their mortgage deals).
Good landlords understand the cost of void periods, and so work hard to avoid them. However, they also know that they must increase rents to allow for inflation and to make a reasonable profit.
Sensible financial strategies include maintaining a close eye on market rents, being hyper-diligent about costs, and ensuring you keep all receipts. Keeping close to a mortgage broker with buy-to-let mortgage expertise and hiring a good accountant who understands the buy-to-let tax regulations are both key relationships for buy-to-let landlords.
In summary
These three areas are interconnected, with elements overlapping between tenant, property and financial management.
Our effortless property management processes help landlords to keep on top in all three areas of responsibility. Here are just a few of the ways in which we can help you:
- We provide ‘best in class’ in support services – first lets, relets, maintenance and accounts
- We manage the property process from start to finish
- We deal with service charges and ground rent on the landlord’s behalf
- We administer payments of service charges and ground rents
- We provide a referral service for rent and legal insurance, buildings and contents insurance, and mortgage advice
- We pay your rent within 24 hours of receipt into our bank
- In case of rental dispute, we will prepare all the relevant evidence to present to the DPS arbitration service
- We conduct annual rent reviews in line with current market valuations
- We organise inventories at the start of the tenancy and check-outs at the point of vacating
- Our maintenance department has a national database of the best contractors and ensure that work is done cost-effectively and efficiently
- We can organise all compliance, ensuring the property is in line with legislation
- We organise annual gas safety checks and arrange for Energy Performance Certificates
- We provide a bespoke tenancy agreement that has been approved by a solicitor to provide protection for landlords and tenants
- We can organise quarterly/interim property inspections if required by the landlord
- We collect monthly rent and chase any arrears with the tenants – if the tenant does not respond, we pursue any guarantors on the account
- When tenants renew onto a fixed-term contract, we can conduct in-house referencing and produce a renewed tenancy agreement if required
- In the unfortunate circumstance of a tenant falling into arrears, we can serve a Section 8 notice and recommend a solicitor to attend to the eviction process
- We notify local authorities of any change of tenancy to ensure tenants fulfil their legal responsibilities
To help landlords navigate many of their responsibilities, we’ve produced The Ezytrac Lettings and Management Series. These five books cover all aspects of Letting and Managing your property:
- Book 1 – Finding Great Tenants
- Book 2 – How to Maximise Rental Income
- Book 3 – How to Deal with Rent Arrears
- Book 4 – Landlord Cash Flow Considerations
- Book 5 – How to Be a Great Landlord
Download your free copies here.
Live with Passion,
Brett Alegre-Wood