The prospect of becoming a landlord can be very tempting, especially for those looking to build their wealth while focusing on other matters. It can be a steady stream of income that will undoubtedly benefit those willing to put in the work. That said, it can also be quite intimidating to be a landlord, as it is often associated with stress due to tenants that refuse to pay.
When you consider all of the challenges that come with being a landlord, it is no wonder why some are hesitant. While being a first-time landlord can be tricky, it does not have to feel like such a miserable process. There are ways to help you earn as a landlord without having to continually worry about being blindsided. One effective strategy is to look into the process of landlord reporting tenant to credit bureau organisations, this can help to encourage timely rent payments by tenants who are aware that their payment history can affect their credit score.
Additionally, establishing clear communication channels with your tenants and setting firm but fair policies may significantly reduce misunderstandings and disputes. Implementing these strategies can create a more stable and stress-free experience, allowing you to enjoy the benefits of being a landlord. With that said, here are a few other ways which can help you reduce risk as a first-time landlord.
Be aware of potential problems
Aside from following laws to ensure that everything goes smoothly, there are also potential headaches that could very well make being a landlord a miserable process. Even if you might do your best to screen a tenant, they could still end up not paying the rent on the dot and give you a difficult time when you try to collect. Fortunately, services such as rent arrears recovery and squatter evictions are provided by experts, to alleviate the situation.
Other issues that can go wrong that may cause you excess stress are property issues. Most of the time the property will most likely be easy to run and have few issues, however, there will also be months where it feels as if everything has gone wrong at once. This can cause you the landlord some anxiety as you will undoubtedly feel pressure to find the correct professionals to solve the issues before the tenant suffers as a result of the broken fixtures. To possibly be prepared for these eventualities you may want to look into finding a company for plumbing repairs or a handyman who you can call for short notice incidents. Being aware and planning for possible eventualities may help make the experience of being a landlord much more pleasant for you.
Beyond fixing visible problems, it’s equally important to pay attention to hidden risks that may affect your property. Electrical safety, for example, is a critical component that landlords cannot overlook. Faulty wiring or outdated systems could not only endanger tenants but also expose you to legal and financial risks. Staying on top of inspections and maintenance can help you identify and address these issues proactively. To avoid additional stress and ensure compliance with regulations, landlords should also consider conducting an EICR check (Electrical Installation Condition Report). This mandatory inspection evaluates the safety of your property’s electrical systems and identifies any potential hazards. Keeping your property in compliance not only protects your tenants but also helps you avoid fines or legal complications.
Ensure that you screen potential tenants before accepting any terms
While some first-time landlords might feel like they have no business screening potential tenants due to the need to start earning money right away, it is always better to be safe than sorry. Pre-screening does not necessarily have to be such a formal process. It begins the moment they call and continues when you get to meet them to talk about the property. You can take the time to observe how they carry themselves and figure out for yourself whether or not they are a good fit.
It is perfectly acceptable to refuse if you do not have a good feeling about the potential tenant. There will always be another to take their place – provided you are diligent with marketing. If you need any guidance on finding a tenant, the best Letting Agent Hull has to offer would be more than happy to help.
How to succeed with your marketing strategy
A decent marketing strategy is mandatory if you intend to have a list of potential candidates giving you a call. It will not do to only have one or two tenants on the list, as it increases the risk of potentially ending up with someone who is not a good fit for your property.
That said, it is not necessarily easy (or cheap) to go with traditional marketing to get the job done. While you can advertise your property however you want, a first-time landlord will likely not have the resources necessary for a decent marketing campaign. Fortunately, you can build the foundation for marketing with the use of social media. Not only does it help you interact with potential tenants, but it is also completely free.
Ask for a rent guarantor
Another very effective way to reduce your risk is by asking for a rent guarantor from your tenant. Now you might wonder, why ask for a rent guarantor? A rent guarantor is someone who agrees to cover the rent and any other financial obligations if the tenant is unable to do so. This can provide an added layer of security, ensuring you receive your payments even if unexpected circumstances arise with your tenant. For instance, if your tenant experiences a sudden job loss, medical emergency, or any other financial setback that prevents them from paying rent, the guarantor can step in to fulfill these obligations.
Also, it’s particularly useful if your tenant has a limited credit history or income that might not meet your usual criteria. By requiring a guarantor, you can have greater peace of mind and confidence in your rental arrangement, knowing that your investment is better protected.
Being a successful landlord is not something everyone can accomplish. It requires plenty of preparation, and the patience to see things through. The tips above will help give first-time landlords a fighting chance at achieving success.
