Currently, the private rental sector is undergoing turbulence. Changes to mortgage relief have cut margins. New Energy Performance Certificate (EPC) requirements mean many landlords will have to upgrade their properties’ energy efficiency by 2025. Buy-to-let mortgage interest rates are up and high inflation is eating into profits. Little wonder many landlords are looking for ways to protect their investment. In this article we share our top tips for landlords to get the most from their rental properties.
Screen potential tenants
I wasn’t surprised to read that there has been a notable increase in tenants lying about their ability to pay their rent. There is currently a lot of competition for rental properties while, at the same time, people’s incomes are getting squeezed. Some tenants are resorting to forging payslips and bank statements to secure tenancies on properties they can’t afford.
Tenants like these are much more likely to run into problems paying your rent. This is why it’s essential to conduct professional tenant referencing checks before handing over the keys to your property. I would recommend choosing the most thorough checks you can. These typically comprise:
- An employment history check
- History of residency (with previous landlord reference)
- Personal data checks – bank account, ID etc
- A credit check and affordability calculation
Properly done, these checks should screen out people who would have problems paying your rent, as well as those who have been troublesome tenants in the past. Given that a full check costs in the region of £30, it’s a good investment to help secure the best possible tenants for your property.
Build a good relationship with your tenants
If you have a good relationship with your tenants, they are much more likely to look after your property. This can help cut down the wear and tear. It will also encourage them to stay in your property longer, cutting down on the time and expense needed to find new tenants.
So, be approachable, respond to tenants quickly and keep on top of maintenance issues when needed. If tenants respect you, it pays off in multiple ways.
Get the right insurance
As a minimum, you will need landlord insurance that covers the building itself. However, one of my top tips for landlords is to get rent guarantee insurance as well. This is all the more important in the current climate where growing numbers of people are having trouble paying their rent.
A good rent guarantee policy will offer you:
- Monthly rental income if a tenant defaults
- A certain amount of cover for up to 3 months after an eviction
- Landlord legal expenses (such as eviction costs)
If a tenant defaults, an eviction can take months, leaving you with no income. It’s better to be safe than sorry!
Use a good accountant
Working with a good accountant can simplify the way you manage your portfolio, as well as potentially helping you to increase your margins. As the Landlords’ Accountant, THP offers landlords a tailored package of services that include:
- Free landlord cloud accounting software
- A personal landlord account manager
- Preparation of Self-Assessment Tax Returns for you and your partner
- Arrangement of fee-free BTL mortgages via our broker partners
- 15% discount on Wills and Estate Planning Services
I hope you’ve enjoyed my tips for landlords. Follow this link for full details of our Landlord Platinum Service – it offers you even more benefits than the ones I’ve listed above!
About Jon Pryse-Jones
Since joining THP in 1978, Jon Pryse-Jones has been hands on with every area of the business. Now specialising in strategy, business planning, and marketing, Jon remains at the forefront of the growth and development at THP.
An ideas man, Jon enjoys getting the most out of all situations, “I act as a catalyst for creative people and encourage them to think outside the box,” he says, “and I’m not afraid of being confrontational. It often leads to a better result for THP and its clients.”
Jon’s appreciation for THP extends to his fellow team members and the board. “They really know how to run a successful business,” he says. He’s keen on IT and systems development as critical to success, and he continues to guide THP to be at the cutting edge and effective.