A deep dive into the big moves that landlords can make to get ahead in the rental game.
1. Quality beats quantity
Finding a great tenant isn’t easy but once you do find one, your life will be a whole lot easier than if you are left with a poor performing tenant. It pays to take the time and be selective when reviewing your tenant’s application. Affordability is a key measure, with bank statements and payslips being the core requirement. A credit check can give some good insight into the tenant’s rental history but this sometimes doesn’t tell the full picture. We recommend going deeper and calling the tenant’s two previous landlords for a reference check, because we all know that historical behaviour is the best predictor of future behaviour.
2. Use a comprehensive Assured Shorthold Tenancy Agreement
A written tenancy agreement is important to document the obligations of the tenant and the landlord. Key terms to include in the agreement include deposit terms, the notice period in relation to the consumer protection act, recourse in the case of non payment, pre- and post occupation inspection procedures, renewal notice and period, specific rules such as smoking and pets, noise control measures and maintenance provisions. Most importantly, the lease must be stored safely so that in the case of a dispute it can be found easily.
3. Deposit terms and products
The Tenancy Agreement must set out the terms that specify the collecting, holding and return of the rental deposit. A common dispute is around wear and tear of the fixtures and fittings. It is therefore important that you complete a detailed Inventory, prior to letting your property. This needs to be agreed and signed with the tenant before they move in.
It’s important to inspect and document the state of the rental unit regularly during the tenancy, which can help avoid disputes over refunding the deposit when the tenant moves out. These inspections should preferably be done with the tenant present so that both parties are on the same page.
4. Communication is king when it comes to maintenance
Treat any maintenance and repairs reported to you with urgency. For example, when a tap breaks, this is not something that can wait a week. Cold showers in winter are not fun for anyone. Your property needs to be kept in good shape if you want good tenants to renew their lease. Remember that your tenant is your customer and if you want them to pay on time and remain loyal to you, you need to make sure that they are happy.
5. If you don’t have the time to manage the unit yourself, use a good agent
There are many good agents out there that have extensive track records in managing properties, but there are also many fly by night agents that one must watch out for. We suggest asking for references from the managers to ensure they are reputable and have the necessary expertise to effectively manage your property. Fees for managing the property are charged on top of any commission charged for finding you a tenant. The fees for finding a tenant can be equal to one month’s rent, but with Houson, we only charge £35. You can choose to only use the agent to find the tenant and then manage the rental yourself after that, or you can choose a full service that includes management too, with an average commission of 8–10% of your rental income. Here ate Houson we charge just £50 per month for full management.
6. Package your listings with value
Once you have the basics sorted, you may want to take things to another level and set your listings apart from the rest of the market. This can become especially important in a tough rental market like we are seeing in the UK currently, where there is an oversupply of rental stock available for tenants to choose from. Offering your tenants additional value in the form of discounts on electricity and rewards at major retailers for positive rental behaviour like paying their rent on time and providing a monthly home check-in, can be a very cost-effective way of making your tenants afford their rent better.
