Becoming a landlord is complex. There are various things to consider when listing properties, so it’s only natural you’ll make mistakes along the way. This article has been written to help you recognize what mistakes to avoid as a landlord. It comprises a list of common errors landlords make, so you can learn from these mistakes before you make them. Preventative measures are a great way to avoid learning the hard way.
Overpricing the Property
When someone is looking to sell a property to a landlord, it’s natural for them to talk up the rental value of the property. As a landlord, you can assess the reality of the situation by researching online and talking to letting agents. We’re currently operating in a price-sensitive market. The last thing you should do is inflate the cost of rent for tenants, only to receive insufficient interest while you’re still paying overheads. Avoid listing at a high rate than having to scale the price down later on.
Rentals have become popular in society as a lifestyle choice. People are increasingly choosing rentals because they can’t afford to buy, and it’s a convenient option to do so. This has made long-term rentals common, so tenants will want furniture that creates a warm ambiance. If your property doesn’t make tenants feel at home, they will treat it badly or find a better one. Make sure you incorporate good quality furniture or risk an undesirable outcome.
Getting Poor Tenant References
The main point of referencing is to ensure prospective tenants will be capable of paying the rent. If you receive inadequate references, you can’t paint gain an accurate portrayal of the likelihood they’ll pay going forward. Check employer and bank references, and ensure the cost of rent is no more than half the prospective tenant’s income. With good background checks, you can gain an understanding of whether they’ll pay on time and treat the property well.
Using a Bad Management Agent
If you use a bad management agent or don’t use one at all, you’ll struggle to manage your property from afar. This becomes more relevant if you reside a distance from your rented property. With a good management agent, problems can be attended too quickly. Regular inspections can be conducted, and the landlord’s legal obligations followed. A good management agent can use their knowledge and experience to fill in the void left by rookie landlords.
Forgetting the Importance of Location
When given the choice, tenants will always prioritize location over other factors. This means as a landlord you should too. Buy properties with a widespread appeal, considering your target demographic. What amenities are close by, and how encouraged will prospective tenants be by the area itself? To maximize letting potential, make sure the location of your property appeals to a variety of tenants.
Being Financially Overstretched
Paying the right price for a property is a great starting point. Financial considerations stretch to being realistic about maintenance costs. It’s important to take advantage of websites where you can advertise rental property for free. Budget your expenses and stick to your budget, because then you’ll have a clear understanding of what you can afford and what you can’t.