Being a landlord can be a decent way to earn some extra income, but finding tenants and maintaining a good relationship with them is a complicated process. And it can be easy to make some mistakes that might make it harder to get or keep tenants. Keep reading for a few top tips on simple steps that landlords can take to avoid the most common problems.
Making avoidable mistakes can create difficulties for landlords
When a tenant and their landlord have a good relationship, it can be incredibly beneficial to both parties. The tenant has a clean and safe place to live with the knowledge that their landlord will fix any problems that arise in the house or flat. And the landlord has a trustworthy tenant who keeps the home in good condition and always pays their monthly rent on time.
But the coronavirus pandemic has upended the rental market and created strain between some tenants and landlords, for example, students who are worried about facing possible eviction because one member of a joint tenancy agreement cannot currently pay their share of the rent due to lost wages as a result of the virus. However, if you want to evict tenant for breaching lease agreement, that’s another issue.
Yet even before the pandemic hit, some landlord-tenant relationships were already being badly damaged because of basic mistakes that the landlord made. The landlord advice guide below has been developed with input from LDN Properties – the well-known specialist home buyer that can help you sell your house fast in London.
Five top mistakes landlords typically make, and ways to prevent them
Here are five common errors that landlords commit, particularly if it’s their first time renting a property, along with advice for some potential simple fixes:
- Not screening prospective tenants properly
The problem: A landlord doesn’t do the right credit and other background checks, or ask the right questions about a prospective tenant’s criminal and other history when interviewing them about renting their property. A disreputable tenant evades such screening and causes major problems at the home, including squatting (meaning they refuse to pay rent) or even damaging the property.
How to address it: Take your time when interviewing potential tenants and make sure that you undertake extensive due diligence before agreeing to sign a contract with a renter. Obtain every possible credit check and other background information you are legally allowed to have in order to assess your tenant’s trustworthiness.
- Not keeping the tenants satisfied
The problem: Tenancy agreements will put certain obligations on the landlord, such as fixing structural problems and other issues as they arise. Landlords that do not take very good care of their properties or tenants run the risk of having disgruntled renters who might refuse to pay, or to reduce their rent some months in response.
How to address it: If landlords work hard to keep their tenants satisfied by fixing problems as they arise and keeping to the terms of the rental agreement, tenants often will repay that by being great renters who always pay their monthly instalments on time and who will keep the house or flat in great condition.
- Not having a plan in place for payment and unexpected financial issues
The problem: COVID-19 has caused many people to lose their jobs, creating uncertainty about how they will pay major bills like rent. Without a plan in place for dealing with such emergencies, landlords risk losing out on a significant amount of money from their renters, whilst the renters face the risk of eviction.
How to address it: Be considerate of the fact that unexpected things happen in every person’s life, and respond to such outcomes accordingly. Perhaps you can agree with the tenants that they can defer or reduce payments for one or two months. This will ensure an ongoing good relationship with them and mean that you will continue to have tenants who hopefully can repay you in the future.
- Not insuring the house or flat properly
The problem: Landlords who don’t take out the right insurance for their rented residential properties could be facing significant legal bills for accidents or other issues that might happen to the tenants when they are living in the rental property.
How to address it: As a landlord you can’t use regular home insurance to cover such incidents. Instead, you’ll have to buy a special insurance policy designed for rental homes, which should cover any claims that your tenants might make. You can also use this guide by TecHero Roofing Inc. to understand what kind of damage is covered by homeowners insurance.
- Not picking the right location for your property
The problem: Picking the right house or flat for your own home can be a lengthy process, and it’s even longer when you’re planning on renting out the property. A home in the wrong location could struggle to find anyone interested in being a tenant.
How to address it: Do research on which nearby areas are in high demand for rental properties and likely to stay that way in the future, you can learn more from Metropolitan Mortgage Corporation on how to unearth the history of a house. Choosing a good location can ensure that you’ll never struggle to find tenants, even when existing tenants move out. This will provide more financial stability compared to a home in an unpopular location.
Being a landlord is hard work, but avoiding common mistakes makes it easier
If you are a landlord, or you’re a tenant whose landlord has made any of the mistakes listed above, consider using the advice in this post to help you navigate out of those problems. Having a perfect professional relationship between both parties will benefit everyone in the end.