Property Management: Top Tips for Landlords
Are you a landlord with a property under your belt to look after? Read on for top tips in property management from our team of experts.
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Whether you're a new landlord or a seasoned professional with a portfolio of properties, it's essential that you implement good property management to maximise your yield and reduce headaches. To help guide you through the process, we've put together a comprehensive guide with the best tips to follow and common pitfalls to avoid as a landlord.
What are your property management obligations?
Before we go into the top tips, it's essential to establish your obligations as a landlord in the UK. It's not as easy as signing a contract and forgetting about your rental property. There are specific rules and regulations you must abide by that ensure your tenants' safety and quality of living.
Your responsibilities include:
- Repairing and fixing structural damage, heating and hot water issues, and sanitaryware damage.
- Ensuring that gas and electrical appliances are safe to use.
- That the furniture supplied to tenants meets fire safety regulations.
- Ensuring that the property is in a liveable condition.
- Meet safety standards (fire alarm, carbon monoxide detectors, and gas safety)
If you fail to uphold these obligations, your tenants could file complaints against you and even take legal action. To avoid this, it's always a good idea to stay on top of these issues, as it will improve the relationship with your tenants and increase the chance that they will treat the property respectfully.
If you'd like professional advice on your obligations, you should contact a solicitor specialising in housing law or a property management company, who can talk you through your responsibilities.
Property Management Tips for Landlords
To ensure that you have a good experience as a landlord, here are some top tips to make your life easier and ensure that your property stays in good condition.
The quality of your tenants can directly impact your experience as a landlord. It might be tempting to accept the first applicants that make an offer; however, it's always better to wait for the right tenants and lose out on a couple of rent payments than have a year of stress with the wrong tenants.
Here are some steps you should take:
- Request and verify references - You should always check references with previous landlords. You'll get an idea of what type of tenants they are and whether they fit your requirements.
- Check documentation - If you're using an estate agent or property management company, they'll do this for you, but if you're doing it yourself, ensure that you check the legitimacy of the tenants' documentation.
- Financial check - You should request to see a work contract or a letter from the employer confirming salaries. Otherwise, you should see recent bank statements to ensure the tenants can cover the rental cost. If you're working with an estate agent, ask if they run credit checks.
- Right to rent check - You are legally required to check the immigration status of any potential tenant before they move into the property.
It's imperative to note that you must comply with the latest laws and regulations as a landlord. As a result, you cannot discriminate when choosing tenants, including criteria such as age, disability, race, religion, or gender. In general, you should be educated and knowledgeable about all the legal requirements for landlords and tenants so that you can avoid legal action.
As a landlord, you have the right to conduct inspections of your property to ensure the tenants are complying with the tenancy agreement. During the inspection, it's vital that you check:
- The structural condition of the property, inside and out.
- Maintenance issues that need repair.
- Signs of any illegal activity that breaches the tenancy agreement.
- That the property is still in a habitable condition.
If anything, inspections give you peace of mind and a chance to meet your tenants and hear their difficulties. Communicating in this way will help build a good relationship, especially if there are issues that you can fix. You are also entitled to take photographs as evidence if you encounter anything that breaches the tenancy agreement.
Note that you must follow current regulations that state landlords must provide at least 24h notice before any visit. If you don't provide notice, the tenants are fully entitled to deny entry. If possible, it's a good idea to arrange a time that's suitable for your tenants. In terms of inspections, once a quarter is plenty to ensure the property is still in good condition. More than that is likely to result in problems and upset tenants.
Hire a Property Management Company
If you don't have time to oversee admin and management, you should consider delegating the task to a professional property management company. They will conduct all the checks we've previously mentioned in this guide and handle all communication on your behalf with tenants.
If you're wondering whether it's worth the investment, here are a few reasons why:
- A property management company will conduct better applicant checks. They've got extensive experience in the field and know what to look for.
- Professional companies know the latest rules and regulations and will ensure that you're complying with them.
- You'll receive advice on what to do when uncertain situations arise.
- Many tenants like landlords that employ property management companies as issues get sorted quicker.
- It will save you the time and hassle of dealing with tenants face to face when there's a problem.
- A company will handle rent collection on your behalf and be better trained to deal with late/missed payments.
How much does a property management company cost?
Property management firms will charge you a percentage of the monthly rent paid by tenants. Typically, it can be anything between 8% to 15%, depending on the company you choose. Note that even if you go with a company that offers an 'all-inclusive service, chances are there'll still be extra payments to be made.
Usually, the cost of a property management company is worth it, considering that they can save you money in the long run. They'll be able to:
- Find better quality tenants.
- Fix issues for less with their in-house team.
- You'll have more time to focus on your day job instead of handling the property admin and management tasks.
- They conduct better financial checks to ensure that the tenants can afford to rent your property.
What to look for in a property management company?
It's essential that you don't just go with the first company that makes you an offer. If you're renting your property through an estate agent, they'll likely have their own property management division.
Typically, you can land yourself a deal if you keep all your property dealing within the same company, so it might be worth considering your estate agent. If you're going for an independent company, here's what you should look for:
- A property manager that has experience dealing with your type of property.
- They should have a thorough and professional applicant screening process.
- They're reputable and recommended by clients online.
- They are transparent about fees and services.
- What services do they include with their 'all-inclusive package?
Choosing the wrong property management company that doesn't have a track record of dealing with issues quickly and efficiently could result in more headaches. Also, ensure that the company is part of the Association of Residential Managing Agents, the sector regulator.
If you choose to manage your property yourself, you should know that there's a lot of admin and extra work involved with being a landlord. Unfortunately, you can't just sit at home and take in the profit from your rental property. These additional tasks can get out of hand if you fail to stay on top, resulting in unnecessary stress and sometimes loss of income.
Here are some valuable tips on good organisational practices for landlords:
Keep tabs on rent payments - Ensure that you know exactly how much is coming in each month from your rental properties and whether it's late. If you have multiple properties, it can be easy to overlook a missed payment. There are fantastic digital tools you can use that allow you to keep track of everything.
Stay on top of your tax payments - As you know, you'll be liable to pay tax on your rental income if you surpass the tax-free minimum allowance. You should go through the UK Government guide on taxation for landlords.
Inspections - Arrange inspections well in advance to minimise disturbance for your tenants as a way to maintain a healthy relationship between both parties.
Resolve issues - Ensure that you sort out any problems as quickly as possible. If you don't, the number of issues could escalate and lead to tenants reporting you or taking legal action if the property becomes uninhabitable. The best way to avoid all this extra work is to delegate to a property management company. As evidenced above, a professional property manager will do all the leg work for you at a small cost. It's always better to have peace of mind.
Professional Lease Agreement
A lease agreement is your protection as a landlord from tenants potentially damaging your property or missing rent payments. It also stipulates your rights as the landlord and those of the tenants.The key is to make the document as thorough as possible. Ensure that your details and those of every tenant living in the property are included. If anyone moves into your property, ensure that their names are added. Here's some vital information that your contract should include:
- Tenancy term dates (when it started and when it finishes).
- Length of the notice period.
- The rental cost.
- If any, what bills are included in the rental cost?
- What services are provided by the landlord, such as gardening, cleaning, or maintenance?
- The property address.
- Who's in charge of minor repair issues.
If you feel like you can't write the tenancy agreement on your own, you can always employ the help of a property management company, estate agent, or online service. You should also ensure that you're familiar with the different tenancy types and that the contract is for the correct type of tenancy agreement you have.
Property management pitfalls
There are plenty of mistakes you can make as a landlord, especially if you're a new one. Having a good understanding of what can go wrong and knowing how to avoid it will save you time and money in the long run.
You should ensure that the property you intend to rent out is in good condition. That includes furniture and appliances that work. It might seem like a good idea to install used, cheap stuff in the property, but chances are they will break and cause problems down the road.Of course, if you plan to rent to students, you have more flexibility in this regard. You don't have to install the newest, latest furniture and appliances, but ensure that it's in good working order for a better living experience.
Ensure that you conduct a thorough inventory check before and after tenants leave your property. This will work in your favour if there is a dispute over damage caused to the property. It will also ensure that you know what belongs and what doesn't.Landlord insuranceLandlord insurance isn't a legal requirement, but it's a great safety net if something happens to your property. If you have a buy-to-let mortgage, you'll likely be required to take out insurance. Ensure that you talk through the details with the insurance provider, as some only cover fire or flood damage.
Construction and maintenance
When something needs fixing or replacing in a rental property, many landlords opt for the cheapest labour they can find - family and friends. It's not a good idea to DIY issues in your rental property unless you're a qualified professional. Most of the time, the problem comes back a few weeks after you patched it. Paying for skilled plumbers, construction workers, and carpenters will cost more but it will ensure you only do it once.
Oasis Living offer an Improved Property Management Service
We can help you maximise your property profits within an efficient and cost-effective online alternative to the traditional letting agency! For as little as 5% in fees, we will manage your property's maintenance, documentation and more, putting more money in your pocket! We use tech and automation to make the processes smoother and more transparent.
We also provide a handy online dashboard that gives you insight into your payments, maintenance issues and more, all at a glance!If you are interested in finding out more about how Oasis Living can help you maximise your portfolio, get in touch with one of our experts today.
Whether you're a buy-to-let landlord or looking to maximise your build-to-rent project, we have a team of people waiting to help you achieve success.For more tips on property management, learn how to set up your own property management company with this helpful article.
One of our letting experts will ensure you get the most value from your property