Whether a landlord has just one property to rent out or an extensive portfolio the overriding need is to get them rented out as soon as possible to start generating income. However being in too much of a rush to get a property occupied can often result in unforeseen problems.
Here are some of the most common mistakes to avoid.
1 Not doing background checks.
It is understandably tempting for a landlord to choose the first potential tenant they come across. This could be one they hear about through word of mouth or one recommended by a friend. Failing to carry out ‘due diligence’ is something that can cost a landlord dearly. That ‘quiet, ideal tenant’ may turn out to be a nightmare who fails to pay rent and then trashes the place. If you simply haven’t got enough time to carry out checks then use the services of an experienced property manager who knows what red flags to look out for.
2 Not securing the tenants deposit
Landlords are required to place the tenants deposit into the Tenancy Deposit Scheme where it stays until the end of the tenancy and may be used to offset any major repair costs for example. The deposit has to be secured within 30 days – the tenant must be provided with a Prescribed Information document (which relates to the deposit scheme) – and failing to do this could mean that the landlord will face difficulties if he/she has to evict the tenant.
3 Jumping straight in with a long term contract
Even if a prospective tenant comes with a set of impeccable references it is unwise to provide a contract longer than 3 or 6 months in the beginning – even if you think this provides guaranteed rent for the period. It is tempting to offer a long contract if only to avoid repeatedly going through the vetting process but beware. The fact is that you can never predict how someone is going to behave. There is no guarantee that a tenant is going to respect your property and not turn out to be the tenant from hell. Far better to offer a short contract initially in order to assess the tenant’s behaviour and attitude so that if eviction does become an option this will, in theory, be a more straightforward process.
4 Failing to disclose material facts and skipping an inventory
This is all about the landlord protecting themselves. When you offer a property to a new tenant you may just decide to get them installed as soon as possible thinking everything will be fine. As we have said earlier though it is unwise to make assumptions regarding your tenant. A landlord should provide a full inventory regarding the state of the property and the fixtures and fittings therein. If this is not done and the tenant then trashes the property or steals something the landlord has no redress when it comes to providing proof. Failing to disclose facts about the property or the neighbourhood, for example, can lead to a costly lawsuit.
These are just a small sample of mistakes that could prove expensive for an unwary landlord. Here at Atwood, we know only too well what to look out for, and how to do things right. Why not get in touch to see how we can protect you from making a potentially expensive mistake?