Whether you set out to be a landlord or it happened by accident, there are lots of things to consider to make sure you get the best return on your investment. It’s also easy to get into difficult situations with your tenants if you don’t get things right. Here are six great ways to help things run smoothly.
Get your business head on when looking at properties. You’re not going to be living in it, so the colour scheme doesn’t need to be to your taste. Look for areas where there’s likely to be a strong market for rental properties, such as university towns or near large teaching hospitals.
Work out what your yield will be. Don’t forget to take into consideration times when your property may be empty as well as stamp duty.
Insurance for Rental Properties
You will need a specific insurance policy for your rental properties – the normal home insurance isn’t sufficient.
Complying with the Law
You have a legal obligation as a landlord to ensure that your properties are safe. So you will need to ensure that all gas and electrical items are installed correctly and have the right certification. Smoke and carbon monoxide alarms are mandatory, and you should also have an Energy Performance Certificate for each property. The government provides guidance to landlords to help them stay within the law.
Avoiding Sticky Situations with Tenants
It’s important that tenants pay a deposit before they move into your property. This means you have something to cover any damage to the property or the rent if tenants leave suddenly or under a cloud. You should also take an inventory of the items within the property before tenants move in so that you can check for any damage before they leave and you return their deposit. If you’ve got a lot of properties, you might want to consider investing in Property Inventory Software, as this makes it easier to keep track of what items are in which property. Some Property Inventory Software packages also allow you to take and attach before and after pictures to each property record so that you have a visual record.
Recording Your Income
As with any business that you receive income from, you should keep records so that you can make your tax declaration correctly.