1. Get Previous Landlord Reference
The first thing you need to know in a rental property. When dealing with rental properties, you must make sure that you get a previous landlord reference. Most people just say they want a previous landlord reference but the previous reference is actually the current landlord’s reference. If the current landlord sees a bad tenant, it is going to want to get rid of that tenant. So we’re going to give them the best reference that they could possibly get just to get them out of their hair. So you need to get the previous landlord’s tenant as a reference.
2. Good Referencing System
You need to be aware of is to use a good referencing system. Now, a good letting agent will be able to provide this for you, where they will check their previous landlord, they will check their previous work, they will check their credit to make sure they’re creditworthy. This is very very important. It’s worth paying for this service.
Make sure you are not scammed. It’s very important. What tenants can do and have done it in the past, I actually witnessed this firsthand is that they will say to you “I will pay you six months rent up front.” That sounds so appealing. I sound so appetizing to the landlord who perhaps has had these properties empty for a long time.
But don’t fall for this because what happens with this scam is that they will pay the six months rent upfront. On the seventh month, all of a sudden they haven’t got any more money to pay the rent. On the eighth month, you’re trying to evict them. On the ninth month, they’re still in the property rent-free. Four or five months later you’re still trying to get rid of them. So avoid this scam.
3. Get Guarantor In Your Rental Property
The fourth thing you must know is to get a guarantor that can backup the tenant. So if for any reason they’re not going to pay, that person will guarantee the money for you.
4. Properly Signed Tenancy Agreement
Be professional all the time. Make sure that you have a properly signed tenancy agreement in your rental property. Make sure you secure the deposit in a deposit protection scheme. This is very important because later on if it’s not being put in a deposit, it’s not being put in a protective scheme. If you have for any reason to take that tenant to court, you’ll be thrown out of court if you’ve not protected their deposit so it’s essential.
5. Document Everything
Your EPC, your electrical certificate, your gas safety, documenting your tenancy agreement. Document everything. If you’re going to keep on the cloud, keep on the cloud. In a very secure way, you’re going to keep on your laptop or keep on your local computer. Keep in a very secure way by document absolutely everything.
Be tight with your documentation because it’s very very important especially if you’re dealing with multiple properties, you need to make sure that you’re on top of every single one of these documentations. Put in your calendar a reminder to do the gas safety so that every year, you make sure that your gas safety is up to date.
6. Get Rent Insurance
A lot of people don’t do this and they take the risk and they say okay if the tenant doesn’t pay I will work it out some way or the other but rent insurance is quite a good way of securing your rent. What happens is if the tenant for any reason cannot pay that rent then the rent insurance will kick in and will help you to pay for that rent with a mortgage and in the case of where you know you have to evict a tenant or something like that. The rent insurance company will actually take care of that and to make sure that you get your money. So get rent insurance.
7. Get A Cleaner
If you have multiple tenants in a property, it’s advisable to get a cleaner to come around once a week. And the reason for this is because most of the time, occupants leave properties that are shared like an HMO house or multiple occupancy. They leave because they’re fighting over who has left a mess in the kitchen or who has less hair in the bathroom or who left the place untidy.
So if you get a cleaner, which you can expense over the rent divided by the rent throughout the household, you are increasing the length of stay of each tenant because the tenant will be happier because the place is kept in a good way. So that’s a point #8.
8. Treat It As A Business
Your rental property is a business. Your property letting is a business so treat it as a business. What I tend to do is put aside about 25% of the profit and you have that put aside in case of repairs and unforeseen things that come up. It’s a good idea to do this so that you don’t get surprised when a boiler needs to be repaired or floodwaters are broken or a tap is broken or something’s happened and you don’t actually have that money to sort the house. So treat your property letting as a business. It is actually a business.
9. Get An Accountant
Get a good accountant to help you with your annual self-assessment. You do not want a situation where your tax has built-up over the years and then you’re left with a hefty tax bill that you’ve got to sort out. So do get your self-assessment done by a professional accountant who can help you.
Summary
And finally, if you need any help with perhaps some underperforming rental properties or you want to offload some properties that maybe you don’t want anymore then give us a call because we are still buying properties and we still can help you to restructure your property even if you don’t want to.
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