We’ll be providing some basic BTL tips to help new and even seasoned investors with their BTL property investments.
Not doing the necessary level of research is the biggest mistake new BTL landlords tend to make. A general lack of local rental market checks, including the facts, figures and finances. The laws and legislation associated with letting a property, deposit rules or the tax implications of being a landlord.
It’s extremely important to acquire the right type of BTL property that has good strong rental demand and potential capital growth. Unfortunately, new landlords can end up with the wrong property which will lead to void periods, tenant issues and depreciating capital growth. it’s wise to monitor the sales market to prepare for the eventual investment exit.
Sounds a bit rude, but being cheap when investing in your property presentation, maintenance etc. can show it in a bad light and this will reflect the type of tenant the property attracts. Generally, a poorly maintained property will suffer further damage from the tenant or be responsible for high levels of void periods. Basic new and clean appliances will make all the difference, they don’t have to be expensive. These are basic positive steps to easier life as a landlord.
When a tenant requested to view your BTL property it’s a good idea to arrive early and set the scene for the viewing. If during the day make sure curtains / blinds are open to let natural light flow. On the contrary if it’s dark ensure necessary lighting is in operation. Once you’ve shown them around allow them to have another look without you peering over their shoulders… Be polite and answer any questions or concerns, but never offer something to secure a tenant if it isn’t feasible.
Once a potential tenant expresses interest in your BTL it’s time to do standard checks. As a landlord you should perform the following checks:
- Credit check on the tenant with their permission to analyse your potential risk based on the credit report.
- Obtain references from previous landlords & employers.
- Obtain banks statements for the last 3 months.
- Depending on circumstances a guarantor maybe needed, if so, they should also be credit checked and verified.
A failure to do these basic checks could lead to tenants from hell! Non-payment of rent, late payments, trashed property and a lengthy eviction process…
During the term of the tenancy whether it’s 6 months or 12 months it’s advisable to carry out regular pre-arranged property inspections. If necessary, make it known in the tenancy agreement (AST) that these inspections are a requirement to ensure protection of your property and safety and confirm of the tenant. These inspections will allow you to help spot maintenance issues and ensure it isn’t being sub-let.
This is another issue with landlords (not just new landlords). If a tenant reports an issue such as a minor leak, mould or damp it’s important it gets rectified before it becomes a major issue! Typical issues are blocked drains or gutters, missing or cracked roof slates or tiles, which tend to show up during the colder, wetter months of the year. It’s worthwhile getting a builder to check gutters, pipes and roof etc. during the latter weeks of Summer. Doing so, will maintain a good relationship with your tenants and ensure their ongoing happiness in your BTL property.
It’s always important to keep in mind everyone has their own tastes when it comes to decor. In order to appeal to the masses, it’s advisable to decorate / stage your property with neutral colours. Using the same paint / carpet throughout the property will make refreshing the décor much easier.
Ultimately you should have a good reason why you want to become a BTL landlord. I’m sure it’s not to unblock toilets and drains or deal with tenant calls at 3am because they’ve lost their house keys… From the outset you need a strong enough reason to get involved in property investing. Before investing you should ideally know why you’re buying the property, how long you’re going to keep it and how you’re going to execute its exit. You need a plan, whether you’re looking for a high short-term monthly rental return or long-term capital growth.
If you’re considering investing, feel free to contact us.
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