It’s pretty much inevitable that as a new landlord you’re going to make some mistakes along the way, but hey, we’re here to hold your hand and make sure you don’t trip up too often! Here are five of the most common blunders and how to avoid them.
This is top of our list because it can be the most expensive mistake of all. Every deposit must be protected in one of three government-backed schemes within 30 days and the tenant must be issued with certain Prescribed Information. If you forget to do this, or don’t do it properly, you can be ordered to pay the tenant 3x the deposit in compensation. Just say the word and Upad will protect your deposits for you, so you can be sure it’s been done properly.
This can turn out to be another very expensive mistake if there’s an accident on your property. Standard home insurance is not adequate for rental accommodation, you need a specific landlord insurance policy. Even if your property is let unfurnished and your buildings insurance is provided by your freeholder, you still need public liability insurance in case your tenant has an accident and sues you. An online search will give you the names of plenty of brokers providing landlord insurance. Check out Upad's Landlord Insurance Here.
Too many landlords treat a rental like it’s their own home and waste money on expensive fixtures and fittings, art work and scatter cushions. Not only will this eat into your profits, it could also put tenants off because your taste (fabulous though it might be) is unlikely to match theirs. This isn’t personal, it’s business.
Remember this mantra “tenants are NOT my new best friends” and you’ll avoid the trap many landlords fall into of getting so friendly with their tenants that they find it hard to get tough when things go wrong. Just think how hard it is to remind your mate they owe you a tenner and you’ll realise how difficult it would be you’ll have chasing your tenant for rent arrears if you’ve become bezzie mates. Keep it friendly but professional and you’ll be fine.
Once you’ve settled in your new tenants it can be tempting to think “job done” and do no more than check that their rent hits your bank account every month, but really you need to keep a close eye on your investment. You’ve all read stories of tenants turning rentals into cannabis farms and brothels, and while this is highly unlikely to happen to your property you should try to carry out routine inspections at leave once every six months to check for signs of damage or wear and tear. While most tenants will immediately alert you to any problems, you can’t depend on them to do so and at the end of the day it’s your investment, not theirs.