For some time I have been providing a series of informative articles aimed at helping you get the most from the continuing boom in the residential property market .
Most agents will receive phone calls from a troubled landlord or tenant, disappointed that the promise of utopia has disappeared as rents become unpaid or landlords try to flout the law regarding inspections, visits or fail to carry out repairs.
Whilst it is sometimes possible to be successful as a property manager on a part time basis, the fact is private landlords often come unstuck when they can least afford it. As the rental market grows and tenants are more selective, it makes sense to take all steps to avoid costly mistakes.
Lets look at the most common problems facing the DIY landlord.
For the landlord, the first problem can be just finding a tenant. At present, there is a wide choice of property on the market and prospective tenants are choosy, often looking at three or four properties. It is therefore essential that you are able to market your property as widely as possible. Newspaper ads are an obvious but expensive way of marketing and you may need to advertise in several papers to get the necessary coverage. Once advertised, it is essential that you are able to conduct viewings when the prospective tenants need to view. This could be daytime, evening or weekend – If you can’t do a viewing, they will go elsewhere!
A “To Let” board will bring in a good response as tenants will often drive around to see what’s on offer. Good agents will also have the property details on a national web site, accessible to many good professional tenants 24/7 – how will you replicate this service? At an average rent of £400 PCM, an empty property is costing you £100 a week.
Once prospective tenants are identified, they will need to be referenced. It is increasingly common to find people with CCJ’s. You will need to contact previous landlords and try to take employers’ reference. All this takes time and often needs several attempts to get the information. A good agent will do all this Is your tenancy agreement up to date? I still find landlords who don’t even have a written agreement! If you run into problems, the court will not give you a second chance if your tenancy agreement is flawed.
Don’t forget the mandatory safety requirements, or specialist insurances that are available to protect property, contents, rent and legal fees. You can sometimes obtain these privately, but a good agent will normally offer these at a much more competitive rate.
You should inform the utility companies and council tax about the change of occupant. I’m afraid that the current poor performance of most utility companies in getting this information right first time will give you more grey hairs than you bargained for, but if you use an agent, they will do this for you.
How will you have the rent paid? – Cheque, Standing Order or will you just pop round and collect it. How long will you give a tenant if the rent is a little late, and what will you do? – Should you write, phone or sit on the doorstep? If you use a professional agent, this worry will be handled by them with rents paid promptly and follow up action taken if there are any difficulties.
Will you carry out regular inspections of the property? If you do, there are rules that must be followed such as giving sufficient notice – you can’t just let yourself in! Routine visits ensure communication between landlord and tenant. Good agents do this to minimise the problems and to avoid molehills becoming mountains!
Keeping a tally of all the calls from Landlords regarding rents owed, every one was out of pocket for more than the cost of an agent managing the property for a year. Some were owed over 6 months rent, a costly business. When the costs of re-letting and mortgage payments are added, the unlucky landlord could be facing a significant loss.
Tenants don’t always have it easy either. An increasing number are going for professionally managed properties only to avoid intrusive Landlords, a poor repair record or just plain bullying. Although it may well cost them more to set up a tenancy, the safeguards and integrity of a good agent will ensure they have the quiet enjoyment of the property that the law dictates. This swing will have an impact on the market and increase the difficulties for the private landlord. Those that do succeed in this market do so because they treat letting as a business and adopt a sensible, totally professional approach.
In summary, I make no apologies for pushing the professional service offered by a reputable agent. Unless you have the time and detailed knowledge required becoming a property manager, some things may well be better left in the hands of a specialist. One wrong move could cost you your profit for the year and turn a sound investment into a minefield. If you cannot afford to loose a months rent or two, safeguard your property in professional hands and enjoy the rental guarantees offered by leading agents.