It all looks easy on paper but when it comes to the crunch, being a landlord is as difficult as any other business.
Sure, the experienced ones might make it look like they’re printing money. However, to get to that stage, they will have been through countless mistakes, and today’s article is all about showing them in their full glory, so you don’t do the same.
Avoid these landlord mistakes
Protect yourself from surprises
There are a lot of risks involved with being a landlord, especially when it comes to accidents and unforeseen problems.
Being a landlord means that you need to provide safety and stability for your tenants while they’re living in your property. Having the right insurance policy can assure them that their personal belongings are protected and that they can live in peace for as long as they’re renting from you.
Protect yourself as a landlord with insurances from a reputable insurer. You’ll be able to get the financial protection you need without having to compromise on quality. Choosing the right insurances can be overwhelming so follow this guide from Mashroom to help you pick the right policy.
You don’t calculate your yields properly
If you’re currently looking for your first-ever investment property, there’s no doubt this is an exciting time. After all, reading the estate agent brochures and seeing those huge yields suggests plenty of money is to be made, right?
Well, sometimes. Most of these brochures take two metrics into account; the purchase price and the annual rent.
What they fail to look at are the costs of your mortgage interest, the management fee or even how much it is to insure the property. Then, when you factor in possible service charges and ground rents, those advertised yields suddenly seem a distant memory.
You bite off more than you can chew
Many first-time landlords will often end up buying a property that is far too big for their portfolio. They think that they can easily manage two or three properties but the reality is that it is a full-time job in itself.
Remember, you’re responsible for everything that goes on in the property, from finding new tenants to fixing a broken window. If you’re trying to juggle too many properties, then it is inevitable that something will eventually give.
You don’t carry out proper due diligence
When buying a property, you must carry out proper due diligence on the property itself and the location. After all, you don’t want to find yourself in a situation where the property needs major repairs or the location is less desirable than you thought.
Carrying out a full structural survey is always a good idea, as is speaking to local estate agents to get their thoughts on the area. You should also make sure that you’re fully aware of all the local planning regulations, as this could significantly impact your ability to rent out the property.
Then, it comes to the tenants themselves. Make sure you carry out proper background checks, as this will help to minimise the risk of any problems further down the line.
You don’t decorate in a “landlord-friendly” manner
When you’re decorating your investment property, it is important to remember that you’re not trying to create a home for yourself. Instead, you’re trying to create a blank canvas that will appeal to as many tenants as possible.
That means avoiding any personalised touches or anything that could be considered too controversial. Stick to neutral colours and avoid anything that could be considered “too out there”. Furthermore, you need to keep one eye on practicality. A gleaming white carpet might look fantastic for those first viewings, but several months down a tenancy agreement, it can look anything but.
