Research by Upad has shown that one of the biggest pieces of advice that experienced landlords would give is to get to know tenants, even when using a letting agent. However, the most common advice was concerned with finances. More than one in ten said that they misjudged the rental value of a property. More than a quarter said that the best advice they could give would be to accurately do the sums and ensure that landlords had a contingency in place for unforeseen circumstances.
Getting To Know Tenants
Upad asked experienced landlords what their biggest regrets were when starting out as a property landlord. 12% of respondents said that they regretted not meeting and getting to know their tenants, while 10% said that they did not fully appreciate the value of referencing checks. When asked for the single most important piece of advice they could give, one third said getting to know tenants would be their priority.
Private landlords will get to know their tenants to some extent. They could meet prospective tenants when showing them around the property, and may be responsible for tenant checks, reference checks, and other essential checks. They are also likely to meet the tenant during the period of their tenancy.
Using a letting agent minimises the workload for landlords, and is often considered the more convenient alternative, but it also means that the landlord has less interaction with the people living in their homes. The agent will usually conduct checks, meet tenants, and deal with enquiries throughout the period of the tenancy.
Research also shows that most tenants want to get to know their landlords. It doesn’t have to take long for the landlord to get to know their tenant, either. A landlord can conduct their own tenant interview. They can ask any questions and get a good feel of a tenant’s character. Landlords know their property best and will be in a better position to answer questions about local amenities, schools, and provide other local knowledge. Building a relationship with a tenant could reduce the likelihood of them causing damage to that property, and they will be less likely to miss rental payments. The better the relationship between tenant and landlord, the longer that relationship is likely to last.
Landlord Financial Concerns
Financial issues are obviously a major concern for landlords, too. 2019 has been dubbed as the year that will see the end of amateur landlords. Amateur landlords are those that inherited property or decided to rent their property out because they couldn’t sell. It is estimated that this group accounts for around 60% of the total market.
Experts have warned that the letting fees ban, due to start in June this year, means that costs will be passed on to landlords. Mortgage interest tax relief has also been cut, while increased red tape will make it increasingly difficult for landlords to operate too.
11% of respondents said that they misjudged the rental value of a property. Rental value is the amount that the landlord can charge tenants to stay in the property and is determined by a lot of factors. Location, property type, number of bedrooms, and proximity to local services and amenities will determine a rental value range, while the condition of the property and even the state of the market itself will determine the exact amount that the landlord can charge potential tenants.
27% said that they would advise new landlords to do their sums accurately and ensure that they have money put aside for emergencies or unexpected expenses. Landlords are often warned of unexpected bills. New landlords may face higher mortgage fees, will have to pay landlord insurance and you will also have to find money for things like boiler cover and protection. You will also have to pay tax on the income from your rent, make good any repairs that are required, and cover fees including legal fees and estate agent fees.
The real estate market has changed. Where it was once considered a relatively easy way to make some extra money from a property, it is a lot more challenging following the introduction of new government legislation and experts have warned that the days of amateur landlords are nearly over. Experienced landlords have answered a survey on the biggest piece of advice that they would give to new landlords. The most common pieces of advice are to ensure that landlords do their sums, and that they get to know their landlords.
Rick Marsh is a content writer for Haboth Lettings, a letting agent working on behalf of landlords and tenants in Blackpool and around the Fylde coast. Enjoy a stress free letting experience and get in touch today.