If you’re looking at moving into buy-to-let, it’s important to understand what can go wrong, and how to fix it. Many people have a positive experience of buying and letting a property – but that’s not the case for everyone. There are a few pitfalls in buy-to-let.
Let’s explore them - and find out what are the best ways to recover from the setback.
Some landlords find that they have failed to factor in all the costs, and end up out of pocket. Before you purchase a buy-to-let, there’s a lot of homework to do. Not only does the rent you charge need to cover your mortgage, it should also give you funds to cover insurance, furnishings, maintenance and any agency fees.
On top of that, you’ll need some reserves in case the property is empty for a few months of the year.
Once you reach the all-important monthly total, you need to check that this is a reasonable rent In comparison with other, similar properties in the area. If it’s too high, you won’t attract tenants and will start losing money straight away.
If it’s too late, and your numbers really don’t add up, your options are to sell, or develop the property so that it’s worth a higher rent.
There are increasing legal responsibilities for landlords, designed to give tenants better protection, but also to back important government initiatives. It’s very important to keep abreast of these, or you risk a fine or even a ban on renting out property.
A landlord’s duties include:
If you’ve missed any of these you should address them straight away. Some of these measures carry fines for non-compliance. If you’ve been fined, you must pay up and follow any instructions.
An easy way to ensure that you comply with all the rules and regulations is to appoint an agency like Progressive Lets, who will help make sure that you and your property always meet requirements.
One of the riskiest elements in the letting process is, unfortunately, the tenant. Most landlords have had at least one experience where tenants have failed to pay their rent on time, caused damage to the property or driven the neighbours to make complaints.
The best way to avoid tenant traumas is always to check their references, and particularly to contact previous landlords to find out if there were any issues in the past. Make sure you also have a robust tenancy agreement in place to give you the opportunity to end the tenancy.
If it’s too late and you’re already having trouble with a tenant, it’s never too late to appoint a lettings agency. Agencies have a lot of experience in managing difficult tenants and resolving problems.
There are many more situations that landlords can unwittingly find themselves in - but we can help. For help and support, contact our friendly, experienced lettings team today via email: firstname.lastname@example.org or telephone: 01733 293900.