Photo credit: Sint Smeding
With the London Olympics only months away, agents are seeing a surge in enquiries from homeowners looking to rent out their property and take advantage of an expected increase in tourist numbers. For those looking to invest in a buy-to-let property, there are certain steps you should follow and many pitfalls to avoid.
To highlight the latter, here are the top 10 tips to be a rubbish landlord:
1. Pick a rubbish property
Picking a rubbish property is the fastest way to deter tenants. Make sure you invest in a house in a bad location and with poor transport links. Do not research the property you buy and avoid searching on a professional property portal.
2. Evict your tenants
If you're already letting out your property, tenants who pay their rent on time are a guaranteed source of income. But some landlords are evicting them in search of higher short-term profits from tourists, risking their investment yields. You should obviously follow suit.
Antonia Bance, head of campaigns at housing charity Shelter, told The Daily Mail this week: "Lots of letting agents are writing clauses into contracts being signed saying you can live here with the exception of this period [during the Olympics]."
3. Don't raise the rent
If you're a new buy-to-let investor, only a foolish landlord would refuse to take advantage of the predicted rise in tenant demand this summer. Asking rates during the Olympics are already skyrocketing, with some requesting over five times the market rate. A house in Dalston that fetches £300 a week, for example, is now being advertised at £1,625.
4. Don't do your paperwork
An easy way to fail at being a landlord? Ignore all your legal requirements. "Anyone wanting to let during the Olympics will need to apply for planning permission to let their property for less than 90 days," advises W. A. Ellis. "Without it, they are breaking the law and could be fined up to £20,000. The future sale of the property could also be affected as any enforcement notice will be registered as a legal charge and this may deter future buyers. A short let may also invalidate some insurance policies. If the rent is under £1923 per week, it will become an AST (Assured Shorthold Tenancy) and therefore, a Section 21 Notice must be served."
5. Don't allow pets
Lots of landlords don't like pets because of the damage they can do to a property. One landlord in Milwaukee was even jailed this week for killing a cat that had intruded upon his vacant rental home. But animals can have benefits, according to lettings agent Upad:
"The Dogs Trust praises the virtues of lets with pets," explains CEO James Davis. "They claim that not only will permitting pets increase the demand for your property but you'll also attract a better class of tenant. They further suggest that tenants with pets stay longer because they know how difficult it is to find an understanding landlord."
Long-term tenants and increased demand? No landlord wants that.
6. Don't follow safety regulations
You have an obligation to look after your tenants and make sure that your appliances are working correctly. Not maintaining your gas and electricity could have serious financial implications too, but what's the worst that could really happen? (An Oxford landlord recently left his boiler unchecked for over six months. Not only did he put his residents' lives at risk, he was fined £2,000 and ordered to pay costs of £2,179, reports Property Talk Live .)
7. Don't prepare for cold weather
According to Total Landlord Insurance , landlord claims as a result of burst pipes and flooding rise by an average of 100% in winter months versus summer. Checking your home for weaknesses during the winter is a key first step for a new landlord – so don't worry about doing it.
8. Don't check who your tenants are
A New Zealand landlord discovered last week that her home, located next to a primary school, was being used by her tenants as an unlicensed brothel. Who doesn't like a pleasant surprise now and then? (Residents are now calling for "Firecats Escorts" to be closed by the council.)
9. Avoid Landlord Organisations
Legislation keeps changing, but a Landlord Organisation can keep you up-to-date with the current laws and offer useful tax advice, as well as providing support from other experienced landlords. You should probably steer clear.
10. Be horrible to your tenants
"A good relationship between landlord and tenant is essential to a happy tenancy," adds Upad's Davis. "You don't have to be best buddies (although you can be if you want) but a respectful and amicable connection will go a long way."
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