When letting a property, it’s a good idea to make sure you’re aware of some of the pitfalls facing landlords. Many of these common mistakes can be costly and painful to fix. Here are some of the things to watch out for.
Failing to secure deposits
If you fail to secure your deposit with an authorised Tenancy Deposit Scheme (TDS) within 30 days of receiving it, you can unwittingly land yourself in trouble. Failing to secure your tenants’ deposit in time means that they can apply to the courts for a mandatory fine to be awarded to them, which is three times the deposit amount. You also cannot serve a section 21 Notice of Possession.
Not getting a proper inventory
According to data released from the tenant deposit service, 55% of disputes over deposits arise from cleaning and a further 43% are down to damage to property. Getting an accurate record of the condition of your property at the start of the tenancy and again at the end is the best way to prevent disputes arising and the easiest way to settle any that do come up. We think using an accredited third party inventory company is best – and use one that takes lots of images to support their written description of your property.
If you use us to let your property or manage it, we’ll provide you with an inventory check-in report carried out by an AIIC qualified Company (worth upwards of £135) at no charge.
Skimping on insurance
Getting the right landlord insurance is really important. It needs to have liability cover for you (in case someone is injured at the property and takes action against you). Specialist landlord insurance has public liability cover as standard, but many landlords forget to change their buildings insurance and have a residential policy that doesn’t even allow for tenants to be resident at the property.
More importantly, The Money Charity says that over the last few months, there has been a significant increase in landlords issuing claims against their tenants in the county courts of England and Wales. The number of orders for possession, both outright and suspended, is also increasing, with nearly 70% of claims resulting in some form of order.
This is because UK personal debt has reached a new high, climbing above its September 2008 peak for the first time since the financial crisis, says the charity. Add to that the high rents tenants are now paying and you can easily understand why some find living a struggle.
However we can help protect you with a comprehensive Legal Protection and Rent Arrears policy for Landlords. In fact, if we manage your property this policy is inclusive within our competitive management fee.
If your tenants fail to pay the agreed rent, the policy provider will start to pay your rent or any shortfall each month. More importantly, they will also deal with the recovery of any debt and start the eviction procedure to recover your property for you. Legal costs are covered by the insurer.
With landlord rent arrears on the increase, we would recommend you arrange a policy for each property you own that you let to tenants.
Not screening tenants well enough
Getting tenants who can reliably pay the rent and keep the property in good condition is all most landlords want. So, no matter how keen you are to get somebody in and paying the rent, you need to make sure character references and financial checks are done thoroughly. A good lettings agent will always carry out these due diligence checks.
If you want to get the best price for your property, it needs to be marketed professionally. Almost everybody (97%) searches for property online, so to get the most viewings you need to be marketing on popular property sites. Professionally taken images will massively increase the number of enquirers and viewings you will get, from the type of tenants you really want.
And don’t forget floor-plans either. Many tenants want top see the overall floor-space on offer before visiting your property, so advertising without them will create additional hours of wasted time for both you and the tenants viewing.
If you’re thinking of using an agency to manage your property, you should know that we’ve worked hard to bring you an exceptionally comprehensive service that takes all of the hassle out of your hands. Our packages start at just 4% plus vat for lettings and 11% plus vat for full management and we’re especially proud of the positive feedback we’ve had from some of our customers.