Having successfully purchased your buy-to-let property the next step is managing the property for long term profitability … as an investment property buyer you have to be involved, otherwise your profits will fall and worse still you may lose your investment and end up in prison!
There are several areas of focus to consider, there are legal issues, tenant management and property management. We will focus on each of these separately.
Legal issues
As a landlord you will have legal obligations, these are more than your responsibilities to the tenant under the terms of your tenancy agreement, and failure to comply can result in a criminal offence being committed. The most important issues are those relating to safety, as a landlord you will need to ensure periodic gas safety checks and electrical safety checks carried out by approved gas and electrical contractors. Then there is tenant deposit protection, as a landlord you have to arrange for an approved third party company to hold the tenant deposit. More recently energy performance certificates are required for any property before it is let.
All in all there are quite a few legal obligations on the landlord, ignore them at your peril! All of these issues can be organised by a letting agent, alternatively you can save costs by arranging directly with approved companies, a quick search on the internet will reveal a plethora of choices.
Tenant management
Most tenants will respect your property, but much will depend on your relationship with them. An absent landlord who never checks up on their property is at greater risk of a tenancy going wrong. We suggest periodic visits to the property, check on its condition and that everything is satisfactory for the tenant – let the tenant know you are there to deal with any problems, either property or tenant related. It is also advisable to maintain business-like communication with your tenant, be polite, avoid misunderstandings as these can soon deteriorate and create problems later in the tenancy.
Before letting to a tenant you should also carry out adequate reference checks, these should include tenant credit checks to ensure the tenant does not have any major financial issues, otherwise you could end up with unpaid rents later in the tenancy. We recommend www.Credit-Check-Services.co.uk for carrying out these checks.
When using an agent or managing the tenant directly, always ensure a full inventory check is carried out. The inventory check must be signed and agreed by the tenant at the start of the tenancy, otherwise you will find it difficult to claim for any damages (should they occur) when the tenant moves out. The inventory list should not only document the items within the property but also the condition of everything from windows and walls to carpets.
Property management
Ensuring the property is maintained is fundamental, ignoring a missing roof tile, a small leak, etc, could result in higher costs in the longer term, properties need to be maintained. When carrying out any decoration or refurbishment go for durable quality appropriate to your rental market. Think to yourself, how will this look after 3 years of letting, will it need replacing, are there more cost-effective options. You need to expect some wear-and-tear, the property will need redecorating from time to time, so the lay out and materials used need to be chosen for minimal maintenance costs whilst ensuring tenant appeal for your target market.
Overall managing the property is a mix of good business sense and compliance with the legal obligations of a landlord, if you ignore these you will at best lose money, at worst end up in prison.
