Whether you’re thinking about purchasing a property to fund your retirement or you’re about to sign up your first tenant, congratulations! Becoming a landlord is a big deal, and with the right strategy, it’s the first step towards financial freedom and independence.
Though the best way to become a good landlord is to use your initiative and learn from your mistakes, we thought we’d pull together some useful advice to give you a headstart…
Your rental income will put food on the table and help you invest in future opportunities, so don’t be sloppy. Pursue and chase late payments and have a clear strategy in place to ensure your tenants don’t cross the line. Of course, you should always help tenants in need - especially during times of crisis - but if they stop paying up and ignore your calls, it’s time to start thinking about eviction proceedings and late payment fines.
We recommend setting up online payments to ensure rent doesn’t “go missing” and hiring an accountant or administrative assistant who can handle day-to-day chasing and bookkeeping.
The chances are you’ve invested your life savings into your rental property, so don’t let your hard work go to waste. Before you let any tenant into your property, properly screen them so you know who they are, how they earn a living, and whether or not they’ll pay you on time.
See also: How to avoid bad tenants as a landlord
Always ask for references from previous landlords and conduct a full credit check where possible. Never accept a tenant that wants to pay their rent upfront or in cash, and always play by the book, keeping a record of every interaction and payment, as it may come in useful in the future should you have to take your tenant to court for loss of earnings.
If you’re not comfortable meeting potential tenants face to face and asking those difficult questions, consider working with an agent who will manage the process on your behalf.
The opportunity to build your portfolio doesn’t end when you find a good tenant. Once you have rented out your house, look for ways that you can offer your tenants additional value and improve your property’s return on investment. For example, you could consider solar panels, selling back excess energy to the grid and charging a premium for “green living”, or renting out a garage separately to businesses or consumers looking for a safe lock-up.
Another option to consider is Billing Better, and our bills management service. Landlords and letting agents can recommend us to their tenants and earn additional revenue for very little work. You can find out more about how this service works for lettings agents on our website.
It’s natural to want to buy dilapidated properties at auction and spend money doing them up to attract professional tenants, but it’s important to find the right balance. Sure, you can increase your monthly yield if your property offers premium features like ensuites and modern furnishings, but you should only consider those renovations if they make sense.
Stick to affordable renovations that will have the biggest impact like painting walls, replacing carpets and updating white goods such as fridges and shower units. Tenants don’t look for expensive wallpaper or high-end carpets when renting a property; they want somewhere clean, modern, and homely. Spend that money on your next buy-to-let property, instead.
Finally, never underestimate the importance of marketing your properties and brand.
It is all-too-common for landlords to invest in properties and then struggle to fill them or hand over hundreds of pounds in fees to agencies to market their apartments and houses when they could do the work themselves. By investing in a professional camera and a fancy website, using sites like Rightmove to market your vacant properties and offering prompt, friendly customer service, you’ll quickly fill your buy-to-lets with loyal tenants.
And once your properties are fully occupied, focus on building your brand so that, when your tenant gives notice, you’re ready to get back into sales mode and find a new tenant fast.
There you have it - some top tips for new landlords. Do you have any questions? Reach out to the team at Billing Better and we’ll put you in touch with our network of successful property investors, who will be more than happy to help! And check back to the Billing Better blog soon for more tips and tricks on being a successful - and profitable - landlord.
