Fears over pensions and the prospect of creating a reliable income are leading to more people investing in buy-to-let property. The reality, however, is that this takes a lot of work.
The rewards can be huge but the mistakes can also be costly for landlords. Here are some tips to help landlords avoid the pitfalls.
1. Carry out thorough tenant checks
This is the most basic of tasks that every landlord should undertake, and one which will determine the tenant’s ability to pay. Don’t just accept proof of employment or a right to work in the UK; you will also need several months of bank statements to verify that a tenant can afford the rent.
2. Get to know your neighbours
Again, many established landlords will offer this tip since it can pay huge dividends. Get to know your buy-to-let neighbours, because they will be your eyes and ears for any potential problems.
It’s also important to introduce yourself early on, as your tenants may well have an impact on their lives. Investment properties should be run like a business, and because you won’t be there every day it’s a good idea to leave a contact number with a neighbour.
3. Carry out regular property checks
It’s vital to carry out regular property checks to ensure that the property is being looked after by the tenants. Indeed, many established landlords will carry out three or six month checks to ensure there are no problems with their buy-to-let investment and to help resolve any problems quickly.
4. Communication is key
Communicating with tenants on a regular basis will go a long way to prevent minor problems escalating into major ones and can help to encourage tenants to look after the property properly.
It’s this communication which will also raise any problems such as issues with blocked guttering and damage to furniture. Don’t forget that in addition to an annual inspection, a landlord will also need to have the boiler and any gas-fuelled appliances checked annually.
5. Keep detailed buy-to-let records
Finally, a crucial tip that needs to be acted upon from the very beginning - keep detailed records of all financial transactions and expenses. It may be worthwhile consulting an accountant to ensure that all allowances are claimed and taxes paid. Well-kept records will also help prove that all legal obligations have been met.