Whether you’re an accidental landlord or someone developing a property portfolio, there are some key worries which could be eating away at your peace of mind.
So, if you’ve inherited a property, or bought them at auction, here’s what you could so about the three most common things which keep landlords awake at night:
- Tenants falling into rent arrears.
This must be the number one concern for most landlords. Having tenants who fail to pay, or fail to pay on time, can become a nightmare when you have buy-to-let mortgages to pay every month.
This can put an enormous financial burden on landlords.
Although no one can avoid the issue completely, there are some things you can do to lessen the risk.
What you can do:
- Get your tenants vetted comprehensively – including financial references and former landlords.
- Get a guarantor – ask your tenants to find a guarantor who will cover the rent if they fail to pay.
- Get landlords’ insurance which includes non-payment cover – an independent broker like Severn Bay will help you find the best options for your circumstances. You’re looking for rent guarantees, cover for legal expenses, and to ensure your liabilities are covered.
- Expanding your portfolio too quickly
Growing your portfolio is an excellent way of growing your long-term investments. However, doing it too quickly can over-stretch landlords financially, especially when there are problems such as tenants who fail to pay or properties lying empty.
What you can do:
- Draw up a proper business plan – Talk to an independent mortgage adviser and your accountant about what funds you have, and what you will need to expand. Make the expansion a conscious, planned move, rather than simply buying more properties at auction.
- Get your properties properly covered – talking to an independent insurance broker, someone who has access to the best deals across the whole of the market, will help you get a bespoke package which covers everything you need. That gives you peace of mind.
- Ensuring all properties comply with regulations
Landlords know there is a growing list of regulations with which they must comply.
Buildings, particularly houses of multiple occupation, must confirm to stringent building regulations and must have the right energy efficiency ratings.
Gas appliances must be serviced regularly, and the electrics must be checked.
What you can do:
- Hire an agent – they will manage the tenancy agreements, ensure repairs and maintenance are carried out, and see to it that paperwork is in order.
- Get a survey of your properties – look at where improvements can be made to help improve the energy efficiency ratings, where there could be room for expansion, and where there will be a need for maintenance in the future. Create a long-term plan for each property.
Do you need advice on the right insurance for landlords? Call our experienced brokers on 02920 470375.
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