Even though you may not feel like it, being a landlord means you are maintaining a business, and as such you have to be sensitive when running it. If you are going to be successful as a landlord, there are mistakes you cannot afford to make. Here are 5 of these mistakes:
Poor Tenant Vetting
So, tenant screening? You’ve probably done that along with other background checks, but how about social media? It is not uncommon: social media is the perfect vetting tool. Social media shows you who your tenants’ friends are, their habits, and their behavioural patterns. Simply put you may well get a full profile of your tenants from their social media sites, and employers do this regularly. Forget the circumstances surrounding the tenancy, you may know the tenant, or the tenant might be a distant relative, but the truth is you don’t really know anyone, and the first time you meet potential tenants, they are like salesmen; all smiling. Little wonder Marc von Grundherr of Benham & Reeves says, “All tenants seem lovely at the viewing. It’s like a first date. But if you don’t vet them properly, it can be the costliest and most painful thing ever.”
Overlooking Insurance
As a landlord, you must be smart, and there is absolutely no wisdom in not insuring your properties. Some landlords skirt the budget (some don’t have one) in such a way that provision for insurance is totally overlooked. Hazards cannot be avoided in most cases, they can only be managed. If a property were to catch fire, or there was a flooding incident, an all-inclusive insurance policy would take care of the situation seamlessly. Spending money on an insurance policy can actually be a way of saving you from more expenses in the future.
Getting Lost Financially
With so many issues to keep up with, it wouldn’t be a shock if you lost track of your expenditure. What may help is proper bookkeeping; if your books are well kept, it will be easier to identify expenditure incurred in the running of the business. Without proper bookkeeping, you may end up drowning in a pool of endless debt. Income and expenses have to be recorded on a spreadsheet to avoid such an occurrence.
Breaking the Law
There is just no excuse for breaking the law. Most landlords are aware of the laws that exist, yet they break them, as they believe they are the “Alpha and Omega” of their property. Wrong, they might be the owner of the properties, but they have no right to infringe upon the tenants. The most common breach is housing discrimination: the law explicitly states that an applicant cannot be refused the right to rent because of their race, gender, religion, or disability.
No Plan for the Future
So, currently in the UK, landlords are getting good rent fees, so good that most of them aren’t actually thinking about the future. Their actions may come back to haunt them later. Good times don’t last forever, so why not make a sensible plan for the future?
Most landlords learn on the job, and rightly so. If necessary steps are taken, you will be successful as a landlord. On the flip side, mistakes can ruin you. Avoiding the above-mentioned mistakes will ensure that your business thrives.
Landlords can ensure that they never make any of these mistakes by contacting our landlord advice helpline. Get FREE advice on landlord issues from qualified lawyers who can help with anything from tenant disputes to arrear and debt recovery.
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