On paper, being a successful landlord is easy. The right property + the right tenant, mixed with a smidgeon of luck, and voila! You have a successful buy to let business. Unfortunately, there is also a lot that can go wrong!
There are always stories about rogue landlords in the press. These people always get way more column inches than good, responsible landlords. Unsurprisingly, the general public believes bad landlords are in a majority.
Thankfully, there are far more good landlords out there than the press would have us believe. But make no mistake – it’s not easy being a successful landlord. In this article, we have 43 tips to boost your chances of being a buy to let success story.
1. Treat buy to let as a business
Buy to let is a business. Never forget that. If you don’t take your landlord venture seriously, it’s unlikely to generate you a significant profit. In fact, it could even end up costing you money due to careless decision making and forgetfulness.
Create a property business plan outlining your short-term and long-term goals, as well as how you plan to achieve them. This is your blueprint for success.
Manage your expenses and monitor your rental yields. If a property isn’t making you money, sell it.
2. Identify your costs and profit margins early
The purpose of being a landlord is to make money. Generating a profit from the monthly rental fee and the potential for the property to increase above inflation. In the future you may also be able to develop the property. Utilising the land or property to creating more floor space. To do you need to identify the ROI you are able to make both short-term and long-term. A Buy-to-Let Investment Calculator will enable you to identify how you can best utilise your capital and ensure you are capturing all of your costs.
3. Use landlord software
On the back of the previous two points, we recommend you use landlord software to manage your business admin, rent collection, and more. This keeps all of your property-related transactions in one cloud-based location and ensures you don’t forget to do anything important, like place a tenant’s deposit in a government-approved scheme or service a gas appliance. It will also help you track rental payments. Which is handy if you are the forgetful type and your tenants like to take advantage…
4. Act like a professional at all times
As a professional landlord, it’s essential that you act in a professional manner at all times. This includes – but is not limited to – ensuring all correspondence is polite and to the point, you treat tenants like customers, and you maintain professional boundaries. If you have an issue with anything, try to resolve it amicably and professionally.
5. Memorise the contents of your tenancy agreements
A tenancy agreement is a contract between you and your tenant. It outlines what each of you is responsible for. For the avoidance of future issues, it is sensible to familiarise yourself with each clause of any tenancy agreement you ask a tenant to sign.
Many of the clauses will be self-explanatory, but it’s helpful if you can quickly explain any that cause confusion and draw your tenant’s attention to anything you feel they need to know before they sign. In addition, if your future tenant calls you out on something they feel you haven’t done, you can politely draw their attention to Clause X, sub-section X.
6. Offer tenants different ways to pay the rent
If you want your tenants to pay the rent on time, make it as easy as possible. Setting up direct debit payments is one of the best ways to ensure the rent is always paid on the allotted day. You can ask the tenant what day is best for them, so their rent comes out on the same day they get paid. That way, they don’t end up in a financial hole. Be flexible about how the rent is paid. It really doesn’t matter how they pay as long as they do pay!
7. Be open to zero-deposit tenancies
The deposit is often a huge barrier for tenants on a low income. Asking a tenant to find up to six weeks’ worth of rent is a big ask. It also makes it extremely difficult for tenants when they want to leave. Most landlords won’t release the deposit until the tenancy ends, which means a tenant has to find the cash for a new deposit to hand over to their next landlord.
Zero Deposit schemes make private rentals much more affordable for tenants. The tenant buys an insurance scheme, which is approximately one week’s rent. This covers the landlord in the event of property damage. If there are any issues at the end of the tenancy, the scheme reimburses the landlord and then chases the tenant for the money. It’s a win-win for everyone.
8. Store all documents in the cloud
Imagine how you would feel if you lost all of your business documents. This could be because your house flooded or there was a fire, or perhaps you have recently moved house and incompetent removal men dropped a box full of files into a puddle and forgot to mention this before everything went into storage for a week.
Whatever the cause, the loss of business documents is a huge headache when it is time to do your tax returns. If you don’t have access to comprehensive records of your income and expenditure, it’s impossible to figure out what you owe and what you can claim for.
To avoid this kind of problem, store as much of your business documentation in the cloud as you can. Scan receipts, invoices, and everything else. Upload all documents to an online storage facility.
9. Be consistent in your approach
Consistency is key to a more professional approach. Have solid business procedures for everything you do. That way, there is no confusion about anything and tenants (and suppliers) know exactly where they stand.
10. Be available when required
You must set clear boundaries in your professional life. Let tenants know they can contact you in person between set hours. Any messages sent out of hours will be dealt with the next working day, unless it’s an emergency, of course.
Be very clear about what constitutes an emergency. Being locked out of a house for the umpteenth time may not be your idea of an emergency, but use your discretion here.
Genuine emergencies should always be dealt with promptly.
11. Reply promptly to emails telephone calls
Whilst it’s sensible to set clear boundaries about when you are available to deal with problems/queries, do reply promptly to emails and telephone calls. There will be times when you can’t answer the phone, but if a tenant leaves a voicemail, return their call as soon as possible. With emails, aim to answer within 24-hours, or sooner if the problem is more urgent.
If you know you are going to be unavailable for a short spell, set up an out of office message for your email account and change your voicemail greeting to something more appropriate, so tenants/business partners don’t expect an immediate response.
12. Provide more than one contact option
It’s sensible to provide multiple ways for a tenant/supplier to get in touch. Giving out your mobile number provides a direct line straight to you but have a second business phone for this purpose. That way, you can switch it off when you go on holiday or when you don’t want to be disturbed.
Other handy contact options include email and social media. Run social media and messaging accounts for your buy to let business and encourage tenants to contact you on there. Many younger tenants are more comfortable using Twitter, WhatsApp, and Facebook to communicate, but be flexible according to your tenant demographic (expecting an elderly tenant to use Twitter as a communication tool is probably not suitable for that type of tenant).
13. Appoint someone to be your point of contact when you go on holiday
Since it is unreasonable for anyone to expect you to be available 24/7/365, make sure you have someone who can handle the business when you are jet setting. Let your tenants know they can contact this person in the event of problems.
Of course, if you use a letting agent to manage your properties, you don’t have to worry as much, but it is still a good idea to delegate a trusted third-party to act in your absence.
14. Target the right tenants
This one isn’t rocket science, but it is surprising how many new landlords don’t have a coherent business strategy. It’s very important that the property you let is aligned with the type of tenants you want to attract. For example, if you have hopes of letting to upwardly mobile young professionals, the property should be in a well-connected area and of suitable quality.
Have a target tenant in mind before you search for a property. Otherwise, you’ll struggle to find anyone suitable or achieve the kind of rental income you are hoping for.
15. Use multi-channel marketing
Marketing helps you find a tenant. If you’re using a letting agent’s “tenant finder” service, then this is their responsibility and you can relax. But if this is something you want to take on yourself, it is easy to do.
For best results, adopt a multi-pronged approach to marketing. A stand alone ad in the local paper might yield a few enquiries, but it is better to advertise the property on multiple channels.
Begin with sites like Rightmove and Zoopla, as these are where many tenants look first. Bear in mind you’ll need to sign up with an online letting agent before you can add a listing.
Don’t forget about social media. This is often highly effective, especially if you are targeting millennials and Gen Z tenants. Encourage friends and family to share your posts, so they reach a wider audience.
Try and advertise where your target tenant is likely to hang out. So, if you are looking for older tenants, newspaper ads and cards in local shop windows are great, but for students, word of mouth is effective.
16. Take great photos
Photos are critical. A property listing lives or dies based on the photos. The better the photos, the more interest in the property you’ll have. Use a decent quality digital camera to take photos. Pay attention to lighting and if possible, stage the rooms to show prospective tenants what the property looks like furnished.
If your photography skills aren’t up to the job, pay for a professional to do the publicity shots. Unless something changes dramatically between tenants, you can reuse the photos next time you need to find a new tenant, so it’s a good investment.
17. Have effective tenant screening protocols
A terrible tenant can ruin your business. They can cause extensive damage, refuse to pay the rent, and it usually takes months to evict them. An effective tenant screening process will save you money, time, and possibly even prevent a future nervous breakdown.
Try and weed out unsuitable tenants at the first hurdle. Carry out thorough referencing checks and chase up references. At the first sign of a red flag, walk away.
18. Listen to your sixth sense
Ask plenty of questions and listen to your inner voice. If a tenant seems too good to be true, it’s probably because they are.
19. Be respectful to your tenants
Be polite and respectful to your tenants at all times. Be patient and explain things if something is not clear to them. Never resort to acting rude or using bad language.
Address tenants by their name in all correspondence and keep any communications you have with them professional.
If you need to inspect the property or organise a repair, try and work with your tenant’s schedule. This may be your property, but it is their home (for now), so respect that.
20. Use the Pavlov’s Dog approach
Pavlov, a Nobel prize-winning behavioural scientist, conditioned his dogs to salivate when a stimulus other than food was introduced. From this, he realised behavioural responses could be taught using classical conditioning techniques.
You can use these principles to condition good behaviour in tenants. When tenants do things you like, such as maintain the garden or decorate in tasteful colours, reward them with a discount off their monthly rent. If you make it worth their while when they do things that benefit your property, they are far more likely to continue to look after it.
21. Let tenants keep pets
Pets are a contentious issue. Some landlords forbid pets whereas others don’t mind a cat or small dog. If you are not an animal lover, we understand if you refuse to allow pets in your properties, but remember, saying “no” to pets means you also say “no” to a significant number of prospective tenants.
Allowing tenants to keep pets is fine as long as you manage the tenancy carefully. Landlords can no longer ask for larger deposits to cover the extra damage, so you’ll need to make it quite clear in the tenancy agreement that any damage caused by pets will be charged to the tenant.
Carry out regular property inspections to check for damage. Be vigilant and as soon as you notice any issues, deal with them.