By Ashley Osborne | Head of UK Residential & Managing Director – International Properties
Buy-to-let strategy is one of the most common form of real estate investments and it is also one that requires the most work. This is because your role in buy-to-let strategy changes from a property investor to a landlord, which most investors fail to morph into. To help, we have come up with some effective Landlord advices that will help you manage and maximize your profit on rental properties.
- Tennant Screening
The question of whom you will rent the property to and for how much is the most important decision of all as this will influence all your proceeding decisions. To determine this:
- Research the area you plan to invest in. This means, the type of people that rent there, how much they pay, and their turnover. In addition, you can research the amenities nearby to determine who will be best suited for the property.
- Student or single tenants are quite happy with single room apartments, while families would most often require at least an apartment with 2 rooms or more.
- Remember, the most common tenant types might not necessarily be the best. For example, students are more likely to cause damages to your property than, say professionals.
- Legal Responsibilities
Familiarize yourself with your rights as a landlord, especially if you are a foreign investor with multi-property portfolio as laws differ between countries.
- Landlord Rights
- Other legalities may include
- Managing your Rental Property
Retaining your property’s condition is essential to keeping your house value high. Do not underestimate expenses. You will need to invest time and money to keeping your property in good condition. To do this:
- Keep a percentage of profit for repairs/damages. A good rule of thumb is to put aside 3-months’ rent for emergencies.
- Service the most commonly used equipment frequently to keep them safe.
- Act quickly. Do not be tempted to let the problem prolong to save cost in the short-run.
- Carry out Inspection regularly as tenants will often not mention problems that could be costly in the long-run. Do make sure to follow the legal procedures when you do inspection.
- To avoid trouble among your tenants, prevent property damage, and limit your exposure to lawsuits from residents and neighbours, it is essential to create a legal contract between you and your tenants that includes the following, but not limited to:
- A strict rent payment date and term of the tenancy
- Deciding which party is responsible for repairs and maintenance
- Clarify your legal right to access the property
- Explicitly stating disallowed behaviour such as excess noise, illegal activities, pets, etc.
- Population Trends:
Along with housing market, be on the lookout for population trends.
- Introduction of new amenities and infrastructure to a city often leads to an influx of new demographics
- Population of an area is also constantly evolving. Number of older people might be decreasing while number of students might be increasing.
As you take the role of a landlord, make sure you plan for every eventuality – from nightmare tenants to empty properties. There are lots of things that can go wrong, but most of these can be overcome with the right processes and safety nets placed in advance.