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Letting Agents for PROFESSIONALS
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MANAGING YOUR OWN PROPERTY PORTFOLIO
Posted on June 9, 2016 at 6:09 AM |
Managing
your own property portfolio is highly rewarding. But there are challenges to be
faced and overcome. These can be minimised by learning from the mistakes of
others so here's our top five 'what not to do's'...... 1)
Not charging the market rate. This can work both ways. Either charging over or
under the market worth. It's a common but understandable mistake. The landlord
has a vacant property and wants to get a tenant installed as quickly as
possible to maximise cash flow. The temptation to ask a rent below other
landlords is obvious. Asking a lower rent will have prospective tenants falling
over themselves to sign on the dotted line. Which is all well and good but once
the tenancy agreement is signed the landlord is locked into receiving a low
rent. Not at all good for business and a mistake which could have far-reaching
consequences for the landlords business. An equally unfortunate consequence
could arise from asking a rent above that of the market value. Again it's an
understandable error especially if the property is in an area which is starved
of rental accommodation. The problem comes if the higher rent puts off
prospective tenants and the property remains un-let. No tenant=no rent=problems
paying the mortgage. Charge the market value and let the property without
running the risk of damaging your business. 2)
Not screening tenants. It's something many landlords will be familiar with. You
have a new property or one which has just become vacant. A friend or family
member hears about the house and says: "Paul / Jade / Fred & Wilma are
looking for somewhere and your place would be perfect." Now, helping
friends and family is fine. But this is your business. If you are inclined to
help go through the same screening procedure you would for any other
prospective tenant including credit checks, taking a security deposit, and
having them sign all the necessary legal documentation. If they don't pass the
screening process than a polite but firm 'no' may cause a temporary schism in
the family but may prevent bigger problems down the line. In a similar vein
don't be in too much of a rush to rent. Always screen prospective tenants
thoroughly even if it means leaving the property empty for a little longer than
you would prefer. It will pay off in the long run. 3)
Not carrying out repairs promptly. Repairs and maintenance is undoubtedly the
biggest cause of friction between tenant and landlord. Every landlord will have
stories of tenants demanding the earth and ringing to report minor problems at
all hours of the night. Unfortunately that pretty much comes with the job. It
is in the landlords best interest to maintain a healthy relationship with a
tenant and responding quickly to reported problems and repairs is the best way
to keep a tenant satisfied and happy to pay their rent. When you are notified
of a required repair attend to it immediately yourself or send your go to
tradesmen. Don't be tempted to let minor repairs go unresolved, get them sorted
straightaway. A failure to do so will cause problems and you could end up
losing a valued tenant and suffer an interruption to your cash flow. Not to
mention you will be storing up issues which will still need to be sorted out
before another tenant is installed into the property. 4)
Not being covered by landlord insurance. Make sure your properties are covered
by adequate and specialist landlord insurance. It sounds obvious but it is
amazing how many landlords neglect this. Ordinary household insurance just
won't do. Take out proper landlord insurance from a specialist provider and
ensure the cover is high enough in monetary value and comprehensive enough in
breadth to cover all eventualities and the complete rebuild of the property.
Don't forget to revise the rebuild value every year when renewing the policy. 5)
Becoming emotionally attached to a property. This may seem a strange one but
when taking on a new property, especially if it is the first in your portfolio,
it is easy to become emotionally attached and overspend on the decor. No one is
suggesting that you skimp but, unless you are letting to the corporate market,
an excessive finish isn't required. To take an extreme example; don't install a
cool and contemporary cream carpet in student accommodation. It won't stay
cream very long. In short, decorate practically and to a good standard,
especially in the kitchen and bathroom, but hold off on the unnecessary
luxuries and extravagant touches. |
Categories: LANDLORD HELP & ADVICE
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