Keeping your costs down is one of the most important things in having a long-term, successful investment. For buy-to-let landlords, this is no different.
Landlords can use letting or estate agents to find and manage tenants, and collect rent. However, this would mean paying them some of your returns.
Another option is to go it alone and become a DIY landlord, although there are vital points to consider before taking this leap.
The advantages
Saving on letting agent fees can be beneficial to your business, as any rental income you make will go directly to you, rather than a percentage being paid to them. Additionally, you will not face any extra fees.
You will also have more control over the type of tenant you have, and the relationship you have with them. This can help solve any problems, as you can communicate directly with tenants. Many experienced property investors claim that the key to healthy returns is happy tenants.
It is important to remember, however, that if you choose not to use a letting agent, you will need to do all the jobs that they do. And you cannot afford to scrimp.
What you should consider
Running a buy-to-let investment is the same as managing any other business. You will need to ensure you always have tenants, these tenants are paying the rent, and that the property and tenants are being looked after.
Maintaining a strong relationship with tenants can help keep the rent coming in, stop them leaving, and keep the property in a good condition.
Tenants have the right to live in a home that is safe and in a good state of repair. You will be on call if anything goes wrong.
It is always a good idea to know various tradespeople who can be on hand in an emergency. As a landlord, you are responsible for the property, and this includes the plumbing, heating and hot water, drains, and wiring, alongside other things.
You will not just need good tradespeople. When renting a property, you will need to advertise in the right places and have the correct paperwork in place.
You must also remember to report any income and gains to the tax office.
Your responsibilities
Before renting a property, you should be organised with all of your responsibilities.
Landlords must provide a gas safety certificate and ensure a registered engineer checks all appliances. Tenants should be given the gas safety check record when they move in, or within 28 days of the check taking place. Not offering this can result in fines or imprisonment.
Electrical equipment must also be checked. If you rent a House in Multiple Occupation (HMO), then you will need to conduct an inspection every five years.
Furniture has to be fire-safe, and private rental sector landlords must also install smoke alarms on each storey of their rental property.
You must also organise an Energy Performance Certificate (EPC) for prospective tenants. This will help them determine how efficient the property is and how much their bills could cost. If you do not provide an EPC, you could face fines of up to £5,000.
Before the tenant moves in, you must register with a Government-approved deposit protection scheme. Using one of these systems will protect and hold the tenant’s deposit. The scheme will guard the money against dishonest landlords and agents, and deal with any disputes. You can also be fined for not being part of a scheme.
A helping hand
There are many services that can help you, protect your property, and support you in becoming a landlord.
You can outsource some of the work involved and pay for certain services that will protect the essentials.
One of the biggest problems you face will likely be the boiler. If this happens to fail, tenants will probably be calling you immediately for it to be sorted. Breakdown cover can avoid any stress if this happens.
A regular premium will mean that if something goes wrong, the provider’s engineer will be out to fix the problem. Sometimes, you can give the tenants the policy details and they can arrange a repair to suit them.
When finding tenants, the internet is the best place for it. Some online letting websites allow you to advertise your property for free, and then you will pay extra for wider promotion, enquiries, and viewing arrangements.
You should ensure that your property looks good in photographs, and use high quality images. Make sure that details are accurate and up-to-date, and that you target the right type of tenant.
You may be able to download tenancy agreements and other documents online. Some you might have to pay for, but you can just buy them as they are needed.