Before buying a rental property, there are lots of things you need to take into consideration.
As well as assessing whether there’s enough of a demand in your local area, if you’ll be able to generate a return on your investment and thinking about a long-term strategy, you should decide whether you have the right skills and personality to become a successful landlord.
Though the vast majority of your work will involve selecting properties and vetting tenants, equipping yourself with the following skills will help increase your chances of success…
A good landlord does more than put a roof over someone’s head.
They’re available 24 hours a day, 7 days a week to answer any questions and put things right if something goes wrong. Whether it’s a leaky tap, a broken lock, or a dodgy boiler, you must be able to attend to issues and resolve them in an efficient and timely manner.
If you can’t make that commitment, whether because you’re always out of the country or you are busy with work, hire a maintenance company to be on call and make sure tenants know.
Many landlords and investors fall into the trap of thinking they can buy a cheap property and rake in the cash. That’s true to some extent, but you’ll need to deal with tenants, agents, and tradespeople virtually every month, and be responsive and proactive to their requirements.
If you’re not organised and don’t have good people skills, you’re not going to get very far in the property game. You must be able to sell properties to potential tenants, haggle on your maintenance and management fees and communicate efficiently to ensure everything runs smoothly. Not everything can be done over an email or put off until you’re in the mood for it.
As a landlord, the chances are that you’re going to run into difficult tenants. Of course, there are ways to separate the wheat from the chaff (more on avoiding bad tenants here), but the likelihood is that you’ll need to deal with a tenant who can’t pay their bills on time, is making too much noise or has damaged your property, requiring hundreds of pounds worth of fixes.
Landlords need to be confident and, perhaps more importantly, authoritative. If you can’t take control of a difficult situation, tenants will walk all over you. That means late payments, disruptive behaviour, and broken windows, all of which will leave you out of pocket.
Before entering the game, you must be confident that you can tell a tenant they need to move out. If not, consider handing over the reins to a property management company.
Following on from our last point, having patience in dealing with difficult tenants is key. Yes, they’re renting out your property, but you can’t just kick them out or fine them if you’re not happy with their behaviour. One of the most frustrating things about being a landlord is that you have to follow the law and best practices, meaning evictions can take a long time.
That’s not all. In today’s crowded rental market, you might not find a tenant at all. Whether you’ve bought a niche property or you’re in an oversaturated city, know when to lower your prices and when to hold off, and don’t just accept any old tenant because you’re desperate.
Building a healthy tenant/landlord relationship from day one is important.
You’re not above your tenants because they’re paying you to live in your property.
Be open and honest about your long-term intentions (for example, if you’re planning on selling in a year’s time), make a good first impression, enforce clear and reasonable rules, keep a healthy distance, address their problems quickly, offer easy payment methods, be fair with rent increases, keep digital copies of all paperwork, and go the extra mile.
A welcome pack and a Christmas card show tenants you care about them and their loyalty.
Try to be understanding and put yourself in your tenant’s shoes. Whether you have one rental property or 100, then the chances are you’re in a better position financially than your tenants, so cut them some slack if a loyal tenant falls into arrears one month.
Work with tenants when they run into problems (whether that’s paying bills or dealing with a noise complaint) and try to work out the best way to resolve their issue. Be calm, national, and offer your support rather than shouting or putting additional pressure on them.
Having said that, you should also know when enough is enough. Set reasonable terms for late payments and evictions to ensure that your tenants know exactly where they stand.
Finally, a quick word on hunger and drive. A landlords job isn’t just to provide quality housing at an affordable price - it’s to make themselves money. Always be on the lookout for new opportunities to expand your portfolio or increase your yields, such as converting houses into apartments and upping monthly rent in relation to local market rates and increasing demand.
In today’s cut-throat market with ever-changing legislation and increasing taxation, the more revenue streams you can create the better. One option is to partner with us here at Billing Better and offer your tenants the ability to pay for all of their monthly household bills under one payment. Click here to find out more and request access to our revenue generator.
Do you possess all of the necessary skills to be a successful landlord? Let us know over on LinkedIn and tell us if you think there are any other points that should be added to this list.