subject: 10 Tips To Be A Successful Landlord [print this page] Most private landlords feel under real pressure from all sides in the current economic climate. Those with buy-to-let mortgages coming up for renewal may find themselves with much higher interest rates - especially if there is not enough equity in the property to make a re-mortgage possible.
Many will also run the risk of tenants failing to pay the rent - when a combination of increasing unemployment and the recession take their toll.
Nonetheless, there are simple steps that buy-to-let landlords can take to safeguard their position.
1. Make sure you have the right lease. Landlords need to be sure that their paperwork is in order and that the lease they use gives the maximum protection.
2. Consider guarantors. If you are worried that a tenant will not always be able to pay the rent, consideration should be given to requesting guarantors - friends or family in a more stable financial position who can guarantee the rent.
3. Claim maximum tax relief. Every landlord must make sure that they know how to claim as much tax relief as possible for all available costs including a general allowance for wear and tear. Many landlords consistently don't make the most of possible allowances and end up paying far too much money to the tax man. A good accountant should be able to help you make the most of available tax relief.
4. Beware early signs of trouble with tenants. Watch out for warning signs such as late or non payments of rent or any other indication that the tenant may be having financial problems. Never let significant arrears build up - take early appropriate action, including legal advice on your available options. Equally keep a close eye on the state of your rented property and make sure that dilapidations don't build up - or you risk financial bills for repairs which your tenant simply may be unable to pay.
5. Consider ending the lease. If serious arrears are building or your tenant is simply too much trouble, consider terminating the lease, if you are able to do so. Whether the lease is residential or commercial, you really should take legal advice before taking the action. Beware of course that if you do evict the tenant, you may have difficulty re-letting in the current financial climate. Don't forget that the law is particular tight on residential repossessions. Make sure you serve notice on the tenant in the correct form before repossessing.
6. Remember that you don't have to accept a tenants' surrender of the lease. A tenant can't just give up a lease, and if they try to do so, you don't have to accept it.
7. If the tenant is behind with the rent, then, depending on what the lease says, you may be able to use the rent deposit to pay any outstanding rent. However in during so, of course you make yourself more vulnerable to future non-payment of rent and in particular with recouping any money at the end of the tenancy either by way of unpaid rent or dilapidations.
8. Consider increasing the rent. With fewer houses changing hands, and with the banks limiting new lending, there are an increasing number of people who will need to rent. With demand increasing, you might want to consider increasing the rent you charge.
9. Increase your portfolio. House prices remain broadly at their lowest level for many years. Buying when the market bottoms out, is a sound financial strategy and if you can raise the necessary money, the current economic climate might prove exactly the time for a canny landlord to pick up a few cheap properties.
10. Check out new tenants. It will become increasingly vital for landlords to make sure that the tenants they take on will be able to pay the rent. Bank references and inexpensive, readily available credit checks will become increasingly important.
Whilst there is always money to be made from renting out property, there are a number of serious pitfalls. If you want to be sure what to do or want some expert advice, do get in touch with a specialist landlord and tenant solicitor.
