Here at landlordmoneysaving.com we are always keen to publish ideas that save landlords cash to help boost their bottom line.
One of the most expensive outgoings for a landlord, after their mortgage, is for a lettings agent.
While a lettings agency will have many positives for using their services, most landlords can run their own business as effectively.
These are the four rules for finding and looking after tenants for a BTL property.
Finding a tenant
Even with demand from tenants for rental properties at an all-time high, there still a big requirement for a landlord to select the best tenant for their property.
This means that they must meet with their potential tenant and ask questions and get to know them.
Establish early on whether they have pets or are smokers because the costs for repairing and redecoration after they leave will make a dent in your profits.
Finding tenants is getting easier and many new landlords opt to go online and advertise on sites such as gumtree.com or spareroom.co.uk.
For any landlord looking to have students as tenants, head to accommodationforstudents.com.
Some landlords may also find that social media, such as Twitter or Facebook, may also throw up some quality tenant applicants.
Arrange viewings for your tenants
It’s vital that a landlord meets with their potential tenant to ensure that they have seen the property and they get to discuss various issues.
It’s also important to establish who will be moving in, do not sign a contract unless you are satisfied, and be aware of anyone offering to pay rent several months in advance.
There are many reasons for this but the big one is that they may be wanting to turn your property into a drugs farm – this is a growing problem around the UK.
Also, they may be trying to rent a property that is larger than their needs and so will look to sublet the property to tenants the landlord has never met.
It’s also important to establish affordability for a potential tenant so ask to see at least three months of bank statements, preferably six.
This will establish whether they are living on their overdraft, miss regular payments or resort to using payday loans to reach their payday.
This type of tenant is likely to default on paying their rent since they struggle to manage their money and they will not be the type of tenant you would be looking for.
It’s also important to ask their current landlord for a reference. Another word of warning here: to ensure that the reference is from their genuine landlord, check with the Land Registry as to who actually owns the property.
You should also ask for an employer reference which should mention the salary and any bonuses.
Carry out a landlord’s credit check
It’s surprising just how often landlords with a BTL property do not carry out a credit check which costs £10 but will reveal whether the potential tenant has any County Court Judgements (CCJs) or any other credit risk factors registered to their name. Firm such as Experian can conduct these checks.
Sign up with a recognised association
While saving the lettings agency fee will undoubtedly quickly add up, there’s a lot to be said for joining an association that represents the BTL sector, such as the National Landlords’ Association, which will keep you updated with issues and problems.
The association will also be able to offer credit checks and offer help and advice when it comes to the tenancy agreement and the legal obligations for landlords.
Those are essentially the golden rules to enable a landlord to save money on the cost of a lettings agency but be prepared to deal with all complaints and communication with the tenant rather than having someone who could satisfactorily deal with most requests without having to bother you.