March 26

Investment Property Management 101: Avoid free tenant search sites

How investment property management experience pays

Amateur investment property managers tend to make the same mistakes. It was driven home to me when I watched a recent episode of ‘Nightmare Tenants, Slum Landlords’ on Channel 5. Vicki McNaught had decided to save herself a few quid by going down the DIY route. After all, what is it that investment property managers do that she can’t? Apparently, quite a lot – and from before a tenancy even starts.
Here I retell her story. The mistake she made is a common one. We hear it from many of the previously die hard DIY landlords who ask us to take on the management of their properties.

It’s easy to find a tenant, isn’t it?

Vicki couldn’t understand why investment property managers and letting agents charged so much to find a tenant. It’s not like she had to pay to advertise her property even. There were plenty of websites used by people trying to find a property to rent. Sites like Gumtree, which allows you to post ads for free. So, this is exactly what Vicki did. She was delighted when a young professional viewed and moved in. Just the sort of tenant she wanted.
Her new tenant had a steady job with a steady income. He had benefited from a private education. The references he showed her was evidence that he had a great city career. He was ideal. He would look after the property, pay rent on time, and be of little bother.
Vicki was pleased with herself. She’d saved a couple of hundred quid by not using a letting agent to find a tenant. And the ongoing management fees she was saving would add up to more than a thousand pounds a year.
Then it all started to go wrong.

What do you do when a tenant isn’t who he said he is?

For a couple of months or so, Vicki’s tenant paid his rent on time through the bank. Then one month, Vicki noticed that it hadn’t been paid. From that moment on, Vicki was up the proverbial creek without a paddle.
The tenant simply refused to pay. He wouldn’t let her into the property (quite within his rights).
It turns out that the tenant wasn’t quite who he said he was. He didn’t have a high-paying job in the city. And nor was he privately educated. He was a serial bad tenant. The references he had supplied were false.
So began a long and drawn-out legal battle to evict.

How do you start a good tenancy?

Vicki had made a huge error of judgement. Sure, she’d saved on advertising fees and investment property management charges. But she’d also cut other corners, too. She hadn’t vetted the tenant properly.
When we vet a tenant, we go through their references with a fine-tooth comb. We check their backgrounds, and we don’t take anything at face value – not even the names and addresses were given as referees. It all takes time, of course.
We’ll also contact previous landlords, and run a credit check. More time, and expense.

When the realisation hits

Vicki decided to save herself some money but got everything wrong from the outset. When you hire investment property management services, you’re not only paying for the time it takes to do all the donkey work, you’re paying for our experience and expertise, too.
If only she’d used a professional, she would have saved herself thousands of pounds in losses. You see, her young, professional dream tenant had, in fact, a track record of ripping off landlords going back a long way. For example, he’d previously cost a foreign buy-to-let investor £30,000 in unpaid rent and stolen furniture.
When she was told this, Vicki realised that not using a bona fide investment property manager was a big mistake. A huge error of judgement. It would take years to recoup her losses. And all the time that she wasn’t receiving rent, she still had to pay her mortgage and other expenses.

You tend to get what you pay for

A great saying, which I put my faith in, is that you get what you pay for. Pay peanuts, get monkeys.
Free sites like Gumtree are where the nightmare tenants hang out. They know that’s where they’ll find inexperienced and cash-strapped property investors desperate to rent out their property. And when you find a tenant on a site like that, you’ve got no protection.
Even worse, you find a tenant, get lured by their false references and false promises, and then write a bad tenancy agreement that offers you no protection.

How do you avoid nightmare tenants?

Landlords need to track down top-class tenants for consistent rental income. It’s an arduous process, covering marketing and advertising, conducting viewings, interviewing and vetting. If you’re not experienced in these facets of property management, you probably won’t find the best tenants. You’ll be more likely to end up with a very expensive nightmare.
Vicki told the television programme makers, “We’ve learnt that bad tenants are more likely to target sites like Gumtree because they hope they will be subjected to fewer checks. In the future, we’d always go through an agent.”
Contact Ezytrac today on +44  1522  503  717and discover how our investment property management service will help you protect your buy-to-let against nightmare tenants.
Yours in effortless property management,
Brett Alegre-Wood MARLA MNAEA


How to find tenants, how to vet tenants, investment property management, nightmare tenants, tenant search

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