Six Mistakes First-Time Landlords Make
We Look At Some Points For New Landlords To Be Aware Of.
Despite overblown media reports of a wave of landlords selling up due to regulation changes and new government policies, property remains a viable long-term investment for many.
For first-time landlords, however, common pitfalls can turn a promising venture into a stressful experience.
Avoid these six mistakes to ensure your property investment journey gets off to a smooth start.
1) Underestimating costs
One of the biggest errors new landlords make is underestimating the ongoing property maintenance costs. Repairs, safety inspections and void periods (when your property is empty) can quickly eat into your profits. Budgeting for unexpected expenses and having a contingency fund in place is essential.
2) Skipping tenant vetting
Not thoroughly vetting tenants is a costly mistake. A great tenant can simplify your life, while a problematic one can cause endless headaches. Always conduct background checks and credit assessments and request references to minimise risks. A good letting agent removes most of your risk if you ask them to do this.
3) Not understanding legal obligations
Being a landlord means adhering to a maze of legal responsibilities, from ensuring gas and electrical safety to adhering to local licensing requirements. Ignoring these regulations can result in hefty fines or legal action. Consider working with a letting agent to keep you compliant with all legalities.
4) Poor property management
Some new landlords assume property management is as simple as collecting rent, but it involves much more. Maintenance requests, tenant disputes and ensuring legal compliance can take up considerable time. Many first-timers benefit from using a property manager, especially in the early stages.
5) Not setting the right rent
Overpricing your property could result in long void periods, while underpricing it might leave you out of pocket. Research the rental market in your area to set a competitive and fair rent. Or even better, consult a local letting agent for an accurate valuation.
6) Neglecting tax planning
Many new landlords forget the tax implications of rental income and property sales. Be aware of your income tax responsibilities and factor in capital gains tax if you plan to sell. Working with an accountant can help you navigate tax efficiently and avoid unpleasant surprises.
We’re here to help you whether you are new to the rental industry or an experienced landlord.
Call our friendly team of experts today to get answers to your rental questions.