THE RULES OF LETTINGS: FIVE UNIVERSAL PRINCIPLES THAT EVERY LANDLORD NEEDS TO KNOW

The rules of buy-to-let: five universal principles that every landlord needs to know

Whatever kind of landlord you are or wherever you own a rental property, some universal principles apply to keep your investments profitable, sustainable, and enjoyable.

Private landlords are effectively small business owners, and just like high street shops and online retailers, an important part of their success is planning and management.

Fortunately, being organised and astute is completely free and this week's blog is all about mastering the key fundamentals of buy-to-let, including:

• Referencing and management

• Avoiding penalties and fines

• Choosing the right specification

• Maximising your market

• Managing your finances

We love helping landlords in Wokingham to get these things right with a portfolio that runs like a well-oiled machine, so without further ado, let's get down to it!

REFERENCING AND MANAGEMENT

When it comes to selecting a tenant, you cannot be too careful. Who you choose and the way you set things up will have a massive impact on how smoothly a tenancy runs, so be sure to:

• Conduct thorough referencing including a credit check, confirming a tenant's income, and seeing the last three months' bank statements, plus getting a landlord’s reference if they already rent.

• Prepare a detailed inventory with photo or video evidence of your property that lists every last detail including decor, appliances and floor coverings, right down to radiators and light switches.

• Visit at least every six months to see how your tenants are doing, ask about any problems, notice any damage, and check for potential issues like leaks, malfunctions, and damages.

Too many landlords cut corners on referencing, which usually leads to later problems. So for tips on getting it right, take a look at our Rigorous Referencing blog https://www.pauk.property/blog/136-rigorous-referencing-the-secret-sauce-for-trouble-free-tenancies-and-peace-of-mind

AVOIDING PENALTIES & FINES

Being fined as a landlord is costly and unnecessary, but also remarkably easy with ever-changing laws. That said, many landlords we’ve met could have avoided a penalty by getting the following basics right.

• Before the tenancy starts, give your tenants a copy of the How to Rent guide together with any safety certificates for gas and electricity, then put dates in the diary for on-time renewals.

• Install smoke alarms and carbon monoxide detectors on every floor, and test them on the day the tenancy starts, regardless of how recently you previously checked.

• Register your tenant's deposit with a government-approved body like the Tenancy Deposit Service within 30 days of receipt, and send your tenant confirmation of the registration.

Unless you really love keeping up with evolving legislation, you’ll do yourself a huge favour by having your property managed.

CHOOSING THE RIGHT SPECIFICATION

The most successful rental properties require minimal maintenance, stay looking current, and appeal to the best tenants, so when you're choosing fittings, think ‘timeless’ and ‘durable’ for everything.

• Timber and tiles are more hardwearing than carpets, less prone to stains, and easier to replace when sections get damaged (just remember to buy a bit more than you need).

• In kitchens and bathrooms, buy high-quality taps in brushed steel or chrome, and choose natural timber or matt finishes for cupboards over delicate high-gloss lacquers that are hard to repair.

• Use washable paint on the walls in an off-white or soft grey that will work with anybody’s style, feel warmer than brilliant white, and minimise the need to redecorate between tenancies.

You’ll never regret investing in the right specification. By steering clear of fads and cheap products that date and fail reliability fast, you’ll save a whole lot of money and time in repairs and replacements.

MAXIMISING YOUR MARKET

Although it's possible to start a property revolution, your best bet when choosing which rental property to buy is to go with the flow and pick one with a large local audience, so there's always high demand.

Here are the basics of what the three main groups of tenants look for:

• Families want a house with a lawned garden and easy parking close to good education options: this could be a nursery, primary or secondary school, depending on your target market.

• Sharers need good public transport to cater for multiple work destinations, low-maintenance outdoor spaces like patios or balconies, and sociable nearby spots like bars and coffee shops.

• High-earning professionals will also look for a vibrant local scene, and they expect home luxuries with premium fittings. They also love buildings with amenities like a concierge and gym.

There's a whole lot more to this subject, so take a look at our blog on Choosing a Buy-To-Lethttps://www.pauk.property/blog/choosing-a-buy-to-let-how-to-pick-the-right-investment-property-and-market-for-you for tips on every kind of rental property and every kind of tenant.

MANAGING YOUR FINANCES

Money worries are unwelcome and stressful, and plenty of landlords have healthy income streams but disastrous cash flow. Thankfully, a few simple planning measures can help you avoid a financial squeeze.

• Budget for two empty weeks each year in case you need to carry out any work in a changeover period between tenancies, from damages to upgrades.

• Build a rainy-day pot for repairs and essential maintenance—even £100 every month gives you a yearly pot of £1200, which can earn interest and pay for expected and surprise jobs.

• Put money away each month for tax in a safe place where you can’t touch it, like a no-access savings account, premium bonds, or even straight to HMRC. You may even get a rebate!

Finally, minimising your tax is Landlord 101, and a good way to check that you’re claiming every allowable expense is to visit our previous Landlord Tax Tips blog.

Is your buy-to-let on the right track?

There's nothing we love more than boosting the performance and profitability of the rental homes we manage. Could we do the same for you?

If you own a rental home in Wokingham, call us on 0118 304 5877 or message us at office@pauk.property to chat with our team. No strings, just friendly, expert tips for a successful landlord life.