We’ve all seen the horror stories – whether it’s students turning their bedrooms into beaches, tenants refusing to leave or unpaid rent, landlords don’t always have it easy. If you’re thinking that becoming a landlord might be up your street, here’s 5 landlord mistakes to avoid when buying a property to rent:
1. Not vetting tenants properly
Putting the time in to select good tenants is key to the success of your rental business. If you don’t do your research beforehand, you could end up with tenants who damage your property or miss rental payments – leaving you seriously out of pocket. Ideally you need to meet and interview all potential tenants, as well as asking for references and making sure a formal rental agreement is in place.
2. Not researching the area you buy your property in
You need to ensure that there’s a rental market in the location you buy in. No matter how much you spend making the property attractive, if it’s in the middle of nowhere or in an undesirable area you could struggle to find tenants.
3. Not accounting for hidden costs
We can’t stress this enough, make sure you do your research! You’ll need to budget for everything you’re going to have to pay out. For example there are different types of insurance you might need and as a landlord you always need a stash of cash in case the boiler breaks down as you will be responsible for replacing anything that breaks not the tenants.
4. Burying your head in the sand when it comes to tax
As a landlord, you need to pay tax on the money you receive from tenants, if your total income for the tax year is above the personal allowance threshold of £10,600. What’s more, this is changing – so do your research, there’s no excuses when the tax man comes knocking!
5. Empty properties
It’s simple, your house is only making money when there’s someone renting it. You need to be prepared that there could be times when it’s empty and account for this.
If you are a landlord or are thinking of becoming one and would like any help or advice on any aspect of the rental process, please contact Best Solicitors on 0114 281 3636 or email us confidentially on firstname.lastname@example.org.