The 5 Biggest Mistakes that Landlords Make. And How to Avoid Them.

Clarity Property Management understands that as a landlord, you have a long To Do list. And, it’s easy to get things wrong. Here are the top 5 mistakes that landlords make – clearly laid-out so that you can avoid them.

With several years’ experience in the rental property sector, I recognise that when it comes to renting out properties, a lot can go wrong.

Being a landlord is not only more complicated than it used to be, it’s also more stressful. Or at least it can be if you don’t have the right advice and guidance. It may seem easy: buy a property, make a few tweaks and renovations, then rent it out for more than your monthly mortgage payment.

It’s really not.

Mistakes can be costly and time-consuming, and they’re easily done.

Are you going it alone? What we mean is, are you hoping to save money by doing everything yourself? Rather than engaging a reliable, experienced letting agency, that is? Whilst we’d strongly recommend avoiding the DIY approach, and outsourcing to the team here at Clarity, we hope you find this blog a useful “things to be aware of” guide to help you on your way.

From finding dependable, professional tenants through to dealing with rent arrears, an end-of-tenancy or even an eviction, I always say that there’s a lot to know.

And there is.

In fact, there are way more than 5 mistakes in the complicated world of property rentals that we hear of on a regular basis. But these are the clangers that could cost you dear – in terms of time, money and hassle:

1. Not running adequate checks on your potential tenant

Failing to run through an in-depth series of checks and balances on the person moving into your property can undermine the whole point of renting. After all, you need to know that a) they can and will pay the rent and b) that they’re decent, trustworthy and likely to treat the property well.

Otherwise, trouble could be heading your way.

A legitimate agency can take away this headache, offering the following services:

  • Credit check
  • Linked address, identity and fraud information
  • CCJs, decrees and other court information
  • Right to Rent check and advice
  • Affordability rating
  • Previous landlord reference
  • Income and employment check

2. Not Having the Right Insurance

An extremely expensive mistake if you get it wrong.

Even if you let your property unfurnished, and your buildings insurance is covered by your freeholder, you still need a specialist buy-to-let buildings and content policy; one that includes public liability cover. Should there be an accident in the property, and you don’t have this insurance, your tenant could make a claim against you.

Not taking out rent guarantee insurance to cover unpaid rent is a common mistake we see, too.

3. Being Unrealistic About Finances

In our experience, many landlords fail to budget for the costs of repairs or ongoing property maintenance. Painting, cleaning and carpet cleaning between tenancies  can be expensive, as can – horror of horrors – ghastly nasty-surprise costs such as a new boiler if the old one goes kaput. (It does happen.)

Also, if you expect that your property will always be rented, and that you will have no void periods, you may need to think again. Void periods can happen, not least if your tenants turn out to be somewhat flighty; we’re back to robust reference checks again here. Or rather, the lack of.

Without a simple cash flow analysis to keep enough money to cover your mortgage you could be on a painful journey to financial ruin. Forgive the strong words here – but we’d rather be realistic than not.

4. Not Having a Strong Rental Agreement

And generally, not following property rental legislation.

Oh my Goodness, where do I start? A minefield. And the main reason for outsourcing this essential element to a lettings agent such as Clarity.

When it comes to your status as a landlord, you can’t rely on promises. Or a handshake.

For your protection, and for your tenant, the absence of a current, legally binding tenancy agreement could be your worst-ever decision. Rental property laws are increasingly strict, and progressively swayed in the favour of those living in your property. Should something go wrong, it could go very badly wrong indeed.

Included in this minefield of misadventure could be a failure to protect his or her deposit in a government-backed Deposit Scheme, forgetting to maintain adequate documentation, and even holding back from enforcing the terms of the lease – if you have one, that is.

By the way, regarding the Deposit Scheme, did you know that if this isn’t secured within the legally allocated time of 30 days, your tenant can prosecute you for three times the deposit they paid? And, become immune to Section 21 notices? Good luck with trying to regain possession…

5. Failure to Keep Tabs on the Property

A frequent error that landlords make is not to check on the property frequently enough, perhaps due to distance, or for other reasons. Sub-letting can be a big issue, not least in big cities, and one that could involve complicated, ultra-expensive, legal processes. Plus, it may not take long for a small, cost-effective repair issue to grow into a majorly big-ticket catastrophe due to ongoing neglect.

Again, a good property rental agent will “disappear” this problem immediately, ensuring that any problems that arise can be sorted out quickly. Also, although they’re not officially checking up on how your tenants are looking after your property – they sort of are.

Only 5 mistakes?

In reality, there are several more, but we don’t want you to lose the will to live.

In a nutshell, the team here at Clarity is here to hold your hand. We’ll aim to move as many of those property-related pitfalls and trip hazards out of your way as we can.

In fact, we know how to avoid them altogether.

As a new landlord, we’d recommend you NOT to go it alone. There’s a whole world of obstacles in your way if you do so. Why not get in touch with us for some clarity on the matter?

Tenants With Pets – As a Landlord, Where Do You Stand?

Your ultimate guide from Clarity Property Management about how things are NOW, what will change for renters with animals – and when. Are you pet-friendly? Most of us are. Or, would love to be if we could.   The British are animal lovers par excellence. The statistics...

Landlord Tax: What Can You Claim For, and What’s Not Allowable?

Landlord tax. Not exactly a snappy, cheerful seasonal blog for December this time – apologies for that. However, the deadline for submitting your tax return on 31st January is approaching super-fast, so at the very least, this article is timely. And hopefully,...

So, You Want to Sign Up For Another Year? But With DIFFERENT Housemates?

You’re a student in a shared house in Brighton. It’s a great place to live, the property is clean and comfortable -  and you’re keen to stay there. But, you’re changing up the dynamic – with one or more brand-new housemates. No problem at all. The Clarity team is...

How to Avoid Making Mistakes When Renting

If you’re a professional not yet ready to buy a property, it’s essential to know how to avoid mistakes when renting in Brighton and Hove. Being a tenant gives you options, but like anything in life, it’s easy to get wrong and end up living somewhere that puts your...

Verification: ef8e813a640860fe