The Buy-to-let market continues to be big business here in the UK in 2023, including the Bromley area. Many people are keen to invest in property to rent out in order to have a steady, extra income each month. But, as with any other investment, being a landlord comes with great responsibility, including ensuring tenants are happy, the mortgage is paid, and that the property continues to be well maintained.
Here are 4 common mistakes that landlords can make, and how they can be avoided…
Not screening potential tenants
What kind of tenant you rent your property out to makes the difference between a successful property portfolio and one that flounders. The last thing a landlord needs are tenants who do not pay their rent on time (or at all!), or who damage the property. A good way to end up with these kinds of tenants is to fail to screen potential candidates correctly. A decent property management company (letting agent), such as Bromley Property Company, can help with this and ensure all tenants are screened and potential problems are unearthed.
Choosing a property to rent out in a wrong location
The location of any potential property that you want to rent out is crucial. The most desirable renters tend to want homes in neighbourhoods that are safe, and have access to good transport links, plenty of amenities and great schools. Choosing a property in a bad location can turn what a landlord hoped to be a great investment into a financial disaster. Make sure you do plenty of research before you purchase. A good agent can help advise where would be a good place to purchase a rental property.
Not looking after tenants well
The good landlord is a landlord who is able to secure and maintain long-term leases. The longer tenants can be kept in a property, the more financially secure the property becomes. A constant turnover of unhappy tenants means that the landlords risk of void periods of time in the property increases, which is risky if a mortgage still has to be paid on it. You want to look after good tenants! For example, If you can offer a slightly lower market value rent and still cover your expenses and make a profit, you will have a tenant who is less likely to look around for something more affordable near the end of their tenancy.
Failure to save money
Owning rental property is a business, something that many landlords forget. And as with any business, there are certain expenses that cannot be avoided. Landlords who don’t put aside money for such expenses can easily find themselves in financial trouble if things go wrong. Landlords should establish a savings account into which they regularly deposit a portion of every rental payment. This money should be used for property improvements or emergency expenses eg a broken boiler, and when money is taken out of the account, it needs to be replaced as quickly as possible.
Being a landlord is a very good way to establish a stable and comfortable income, but the above responsibilities and potential mistakes landlords can make need to be avoided. If you have any questions or queries about renting out a property in the Bromley area, please contact Bromley Property Company and one of our expert property management team can help.