So you are becoming a landlord for the first time – congratulations – or maybe you have had your first tenancy and the whole experience didn't go so well, never mind learn from your mistakes! Being a landlord comes with its responsibilities, but if you follow these points they will help minimise the stress and put you on the right track for establishing a good landlord/tenant relationship which will be a win-win relationship – especially as they could well want to renew their rental; agreement which (if they are good tenants) is far easier than starting at square one again.
1 - Ask a Fair Rental Price
Before you advertise your property do your homework to find out what is the going rate for a property like yours – not what you would like, but what is the current rent in your area. Give this plenty of thought and ask letting agents in your area and do some research online. Decide whether you are going to let it furnished or unfurnished.
It is a good idea to provide all the tools needed to keep the property how you would like it and this includes grass cutters, hedge cutters and step ladders – these are the incentive for your tenant to keep things well as there is no excuse not to! Make sure that you have met all the emergency requirements with fire extinguishers, fire blankets, smoke and CO alarms as required.
2 - Prepare a Good Contract
You can get letting contracts online, but it is best to use these as a good framework and to personalise them for your own property. Make the document as clear and as concise as you can – but equally as detailed as possible. Make sure you include any points that could cause disagreement in the future, such as:
- Do you mind if your tenant smokes in the property?
- Can they have guests to stay long term such as relatives?
- Are you allowing them to have any pets?
- Are they allowed to paint interior walls etc?
- Have you defined their responsibilities especially regards parking, gardening and common areas if it is a flat?
- Have you stated clearly how much rent you are charging, what other costs the tenant must pay and importantly on which day every month the rent will be due?
- Also clearly state the financial penalty for being late in the payment of the rent
3 - Prepare for a Fair Move-In Day
If you have time before your tenant moves in, get all the repair jobs and any decorating completed on the property. Get the garden properly tidied and the whole place looking clean, bright and tidy – reflecting your pride in it as this can be very contagious!
With your new tenant, walk into each room and write down a full list of any maintenance jobs that need attention or any faults. If there are stains on the carpet or curtains, write an accurate description of their size and location. Take a photograph of each of these and prepare a full written list and get your tenant to sign it. You should provide them with a printed copy swiftly afterwards.
4 - Have Good Communications with Your Tenant
On Day One, decide the hours in which you can communicate with each other – office hours are the normal practice except in emergency. Provide tenant with a business card or clearly written postcard with your full name, telephone number(s) and importantly – your email address.
Respect their privacy as your tenant and always give at least 24 hours notice that you would like to visit the property.
5 - Document Everything
Keep a file only for the property and keep a copy of all emails/ letters sent to your tenant and received. Always follow a telephone conversation between you with an email stating what was agreed.
Keep a good 'paper trail' on all repairs and maintenance work and always visit after work has been carried out to ensure that both you and your tenant are happy with the standard of work – get your tenant to sign that they are – sounds a hassle, but it is for your own protection.
6 - Reward Good Behaviour!
If your tenant always pays their rent on time – or even ahead of time – it is nice to give them an unexpected treat to say 'thank you' – a nice bunch of flowers, box of quality chocolates or a pair of tickets for the cinema all work well and encourage them to keep the property well, as you are a good landlord.
7 - Respond Quickly to Maintenance Requests
If you have had a request for maintenance to be carried out, respond to this promptly especially if it is something really important such as the central heating/boiler packing up in the winter. Always put yourself 'in your tenant's shoes' and think how quickly you would like the problem dealt with.
Don't cut corners or try to repair things on the cheap because it is false economy and will disappoint your tenant as they are paying a fair price for renting your accommodation.
Many landlords set aside 10% of their rental income each month to use for repairs and maintenance of their property.
8 - Show Compassion
Sometimes life can be unkind and something can happy to throw even the best tenant off track such as losing their job or their car falling to pieces. If they tell you that their rent will be a few days late because of such a calamity, it is wise (if financially possible) to show compassion to them and allow them their requested 'wiggle room'.... but obviously not if this is a regular occurrence.
Likewise, there may be a divorce or illness that will mean one of their friends or family members will have to stay with them, again if this will not impact you, wouldn't it be nice for you to be understanding?
9 - Be Fair When It Comes to the End of the Tenancy
If your tenant has been a good one, it will make sense to suggest they renew the lease. Check first the current rental prices in your area because it is not always fair to increase the rent annually. If they are to continue for a second spell, it is a good idea to arrange to go around the property together to check if any jobs do need to be done etc.
In your rental agreement you will have no doubt requested that the property is returned to you in the condition it was found. When your tenant is leaving, arrange a time in the last few days when you can go through the property together checking that everything is in order – using the list and photographs you prepared at the start of their tenancy.
It is sensible to remember that a person/family cannot live in a property for a period of time without some damage happening. Be fair if they point out something that has been scuffed, marked or chipped – have they made an effort to repair it, for example? In military accommodation, tenants are allowed 10% damage on a property they are vacating and this is described as 'fair wear and tear' and it certainly is fair.
The main point to remember is that you should view the tenancy as a business and be business-like in your approach, dealing with everything swiftly and well. Discuss things with your tenant and get their view as they will know the property probably better than you.
And a final thought? Yes, never rent to family members or friends as this really is putting yourself in a tricky situation... best avoided!
Article kindly provided by Handan Rolande of Exact Inventories.