Make Your Landlord Life Easier
Being a buy-to-let landlord can be hard work. It’s easy to let things slip. But if you do, you are threatening your own business. Far better is to make a plan that will help keep you on top of your taxes, regulations, and tenants, and ensure you stay within the law.
These 16 New Year’s resolutions for landlords will give you the foundation to create a masterplan to increase the success and profitability of your buy-to-let business.
1. I Will Always Take the Maximum Tenancy Deposit
It is important that landlords take a tenancy security deposit and that it is held legally in a tenancy deposit scheme.
The tenancy deposit is your buffer against damage or unpaid rent at the end of a tenancy. The rules changed in 2019, limiting the amount of deposit that you can take to five weeks’ rent. Make sure you take the maximum on every tenancy.
2. I Will Use a Watertight Tenancy Agreement
The tenancy agreement sets out the ground rules on which you let your property to your tenant, and how the tenant is to treat their new home.
Put the tenancy agreement in writing. Verbal agreements rarely mean anything in court. The tenancy agreement should be signed by you and all the tenants. Before they sign, talk them through all the tenancy agreement’s clauses, and make sure they understand what they are signing. Equally importantly, make sure that you know what you are signing – and get it checked by your solicitor to make certain it is watertight. Never trust the off-the-shelf tenancy agreements you can buy in some well-known stationery stores.
3. I Will Respond to Repair Issues Within 24 Hours
It is important that you build trust with your tenant. One way to do this is to reply promptly to repair reports.
Make sure that you have a system in place that ensures you reply to repair reports within 24 hours, and that you can assess repairs for urgency. You should also understand who your tenants are so that you always comply with the Fitness for Human Habitation laws.
4. I Will Treat All Contractors Respectfully
There will come a time when you need a contractor to make emergency repair quickly. They will prioritise their customers according to who treats them the best.
Always treat contractors who work for you with respect. Welcome them with a smile and a handshake, and bow to their superior knowledge. Be friendly, and pay promptly. Treat contractors fairly and they will treat you fairly.
5. I Will Create and Maintain a Team of Professionals
You are only as good as the team around you. A professional team of trustworthy people will save you time and money, and make sure you do things right.
Throughout the investment process and beyond, you will need knowledgeable expertise on your side. Solicitors, accountants, property investment experts, mortgage brokers, electricians, plumbers, decorators, and so on. Think about what you have struggled with over the past 12 months. Do you need to find someone to help you with that? Consider your current team. Is there a weak link? If changes are needed, make them.
6. I Will Review and Maintain My Reserve Funds
Emergencies happen. A boiler needs replacing. A tenant misses a rent payment. A tenant moves. A reserve fund covers your financial emergencies as a landlord.
Assess each property and calculate a reserve fund. Put some of your rental income toward the reserve fund each month. Keep records by a property – this will help you ascertain which properties are expensive to maintain. Finally, don’t be tempted to dip into your reserve fund for any purpose other than what it is there for – repairs and other emergencies connected to your property. It is not your holiday fund!
7. I Will Conduct Regular Property Inspections
Regular property inspections are crucial. You can learn a lot from a property inspection. It gives you a chance to touch base with the tenant and ensure that small maintenance needs are dealt with in a timely fashion before they become major repair issues.
Don’t forget that you cannot enter a tenant’s home without warning or permission (except in emergencies). When making a property inspection, be methodical and always compare to the previous property inventory.
8. I Will Keep on Top of Tax
No one likes paying tax, and if you neglect your taxes you could land yourself in hot water. There is only one thing the taxman likes better than collecting tax, and that is collecting fines and tax.
Make sure you keep on top of your taxes. Keep all your receipts and invoices, understand the tax laws, and use an accountant who has experience in buy-to-let investment finances.
9. I Will Review My Buy-To-Let Mortgage
Your mortgage payments are probably the largest expense in your buy-to-let business. It pays to review your buy-to-let mortgages regularly.
The buy-to-let mortgage market is highly competitive, and over the course of a 20-year investment, every percentage point reduction on your mortgage rate could equate to thousands of pounds of extra net profit. Especially with the changes to how tax relief is calculated on mortgage interest payments by landlords, you should ensure you review your mortgage with a mortgage broker before April 2020.
10. I Will Review My Property’s Electrical Safety
Buy-to-let properties must be checked for electrical safety every five years.
When was the last time you had your property checked for its electrics? The law now requires buy-to-let properties to have a valid Electrical Installation Condition Report (EICR) and that electrical safety checks are made every five years. Don’t break the law. Make sure that your property is legal – and remember that electrical safety checks can only be carried out by a competent and qualified inspector.
11. I Will Make Sure That My Buy-To-Let Properties Are Gas Safe
Gas safety for buy-to-let landlords is not something you can neglect. The law says that you must have your gas appliances checked annually.
Gas can be a killer, and you want to keep your tenants safe. In fact, it a legal obligation. When was the last time your property had a Gas Safe certificate check? The next one should be in your diary. Book a Gas Safe registered gas engineer now, and make certain that you and your property are legal and your tenants are safe.
12. I Will Review My Landlord Insurance
Landlord insurance is the ultimate in protection. It is probably cheaper than you think, and could save your finances should something go wrong.
When was the last time you reviewed your landlord insurance? Does it cover all the potential events that could damage your profitability, such as damage to the property, unpaid rent and stolen furniture? When your landlord insurance is due for renewal, review your options and your needs.
13. I Will Keep on Top of the Landlord Laws
There are hundreds of laws that affect landlords, and ignorance is no defence. If you break one of these laws, the ultimate sanction could be a prison.
What systems do you have in place to keep on top of the constant changes in the laws that affect landlords? Make sure that you read this blog regularly – we will help keep you informed of the laws that most affect you, though we don’t have time to detail each in this blog. Our landlord clients are covered, though, because our property management services benefit from a legal department that ensures we work to the letter of the law always.
14. I Will Streamline My Landlord Processes
Owning a buy-to-let property should make your life easier, not harder. If you find you are spending increasing amounts of time on your buy-to-let business, you need to review how you are running it.
Tenant vetting; property inspections; property inventories; rent collection; rent reviews; arranging maintenance… the list of a landlord’s jobs goes on. Isn’t it time you reviewed what you do, how you do it, and how you can streamline it to give you more free time?
15. I Will Plan Next Year’s Maintenance Rota
Regular maintenance helps to maintain your property’s value and appeal. It also shows your tenants that you care. Landlords who maintain their property well tend to have tenants who care about their home, too.
Think about what needs to be done and when. When should you have the boiler serviced? When was the last time you decorated your property? Do the appliances need servicing? Develop a timetable of maintenance needs, share it with your tenants, and book the contractors you need ahead of time.
16. I Will Spend More Time Doing What I Want to Do
Whether it is spending time with your family, playing rugby, going fishing, or sitting in a field reading a book, you deserve to spend your time how you want to, doing the things that make you happiest with the people you want to be with. This resolution needs no further explanation.
Make Your Landlord Life Easier in 2020
Live with passion