Letting a property successfully is not an easy task and there are plenty of factors for landlords to consider.
Whether you're an experienced investor or first-time landlord, with so much to cover, it can be easy to overlook important issues.
With this in mind, we've put together an overview of seven common buy-to-let mistakes and how you can avoid them to make sure you get the most out of your investment.
Letting to tenants without referencing
Getting the pre-tenancy process right is key to ensuring your let is a success. You should carry out comprehensive referencing checks to ensure that tenants are suitable to rent your property.
Referencing checks include things like previous landlord references and credit checks. Carried out properly, a referencing check can provide you with all the information you need to make your decision.
It can also be worthwhile meeting tenants before you let to them, to get an idea of what they're like and whether they're a good fit for your property.
By letting to the best possible tenants, your chances of a long-term tenancy and receiving rent in full and on time each month are vastly increased.
Not taking the time to carry out inspections
It may seem appealing to let your property and then leave it be while the tenancy is ongoing. Unfortunately, this could be a costly approach to take.
Carrying out regular inspections allows you to spot maintenance issues before they escalate, alongside making sure that the tenants are looking after the property.
It also shows to renters that you care about the property and are keen to make a success of letting it. As a result, they are more likely to stay for longer and treat the property as their own.
Failing to manage void periods effectively
When you let a property, there will be times when it remains vacant between tenancies. These times are known as void periods and the longer they go on, they can become a problem as you won't be receiving any income while still paying to run the property.
Void periods are a good time to make any upgrades to the property before a new tenancy begins. What's more, it's important you budget for a period of weeks or months without receiving rent.
Once you know a tenant is moving out, the quicker you market your property, the better your chances of a short and painless void period.
Having no budget for a rainy day
Following on from the above, it's wise for landlords to budget for the unexpected. If you don't, it could cause serious financial problems.
You never know when you'll need to pay for an urgent repair or carry out expensive maintenance of the property. Therefore, having a pot of contingency money is vital to ensure you don't come unstuck when these issues arise.
Not keeping thorough records
With lots of different payments, dates and documents to keep up with, it's vital that you keep comprehensive records of every tenancy.
Not only will this allow you to keep on top of your finances, but records could be vital if you need to evict a tenant as a last resort.
Digital records are best and it's important to keep a note of all conversations with tenants, even if they were initially carried out verbally.
Forgetting to monitor tax changes and regulation
In recent years, the tax landscape for landlords has become increasingly complex. From additional rules on stamp duty, to the removal of buy-to-let mortgage interest tax relief, there is plenty to consider.
If you don't have your finger on the pulse of the market, you could miss some vital information that could cause you tax issues down the line. With this in mind, we recently looked at seven buy-to-let tax rules you need to know about this year
Not having the right protection in place
Letting a property can be financially rewarding, but there is also an element of risk involved. That's why it's so important you have the measures in place to protect your investment.
Alongside documents such as an inventory, you'll also need landlord insurance and many landlords opt for some form of rent guarantee to protect against tenant arrears.
By protecting your investment, you can improve the chances of a successful let while making sure you always have the funds available to meet your financial commitments.
By avoiding the above mistakes, you’ll be on the right path to a successful tenancy. However, with so much to consider, the help of a local, reputable letting agent can take the pressure off you while maximising your investment and making sure you’re legally compliant.
If you require any further information on any part of the lettings process, you can get in touch with our expert team today
Here at Farrell Heyworth, we’re doing all we can to help our landlords get the most from their rental properties during the pandemic. You can read more about our safe and responsible service here
We encourage all our customers to register with our My FH portal
, which will give you access to the most up-to-date information; remotely and at your convenience.
You can also discover how much rent you could be charging each month with a free instant online valuation
or a virtual property appraisal.