Owning a buy-to-let property is essentially a business and if done right, building a rental property portfolio is a great way to accumulate wealth and develop a substantial source of passive income. Some savvy investors have even made the jump, and are now living full-time from managing the income generated from their rental properties.
However whether you are the owner of a single property or a whole portfolio, more often than not as a landlord you try to save costs at the expense of the tenant.
While cutting costs is a way to squeeze more profits out of each monthly rental collected, Fresh Property would advocate a more balanced approach to being a Landlord. It is important to always bear in mind that short-term savings made from cutting corners, may result in medium/long-term losses in the form of defaulting (Often Upset) tenants and extended vacant periods.
As a Landlord, keeping the Property in top condition should be your primary concern, simply because Tenants are human beings not just numbers in a “Profit and Loss Account”.
Fresh Property has prepared a short list of things that will help you prepare for your tenancy and in the process maximize your rental return:
1. Know you Target Market
It is always important to have a rough Tenant Profile of who is most likely to rent out your property. Based on the Area in which you unit is located, do some research and understand what the local demand is like. General details of the area should be considered such as:
- Are there any schools, universities or educational institutions located nearby?
- Any Offices or businesses of a specific industry?
- Does the area appeal to a specific demographic market? (I.e. Japanese Expats)
Based on this knowledge you can furnish and equip your property accordingly. For example if your Tenants are likely to be University Students do not equip your property, with expensive furnishings and appliances.
2. Review the condition of the property
Before putting your property on the market for rental, it is important to ensure potential tenants can see themselves living in your property. Always freshen-up the property for example:
- Have the property professionally cleaned
- Paint any areas that do not look presentable
- Replace any furniture or fitting that shows sign of wear and tear
- Check that all the utilities are working (I.e. Hot Water, Lighting, Hobs, etc.)
Having a fresh property in good condition, will allow your rental unit to achieve a higher rental price and the tenant is less-likely to have issues during the tenancy.
3. List of Important Contact Numbers and Guide
Some tenants when first moving into a property are often a little lost/ unsettled; therefore by providing them with a short “Property Guide”, this will help them settle down faster and more smoothly. This guide will serve a dual purpose, firstly it will show that you are a caring Landlord and secondly this will help educate the Tenant on who to contact if they have any issues with the Property. Thus saving you the potential hassle of having to take calls at odd hours when the tenant has a problem. Details you can include in this guide:
- Juristic Person Contact Details
- Handyman Contact Details
- Cleaning Service Contact Details
- Property Manager Contact Detail
- General guidelines on what to do in specific situations or emergencies.
- General Details of Tenancy
4. Check-in/Check-out and Inventory
The biggest cause of disagreement between a Tenant and his Landlord is in regards to the Deposit. However this unpleasant discussion can be averted if the right steps are taken before, during and after the tenancy. An Inventory of the internal contents will have to be made to ensure any potential damages claims after a tenancy can be proved/ substantiated.
It is important that a formal “Check-in” process is conducted with your future tenant. During this process the Tenant will walk through the property and will note down any visual issues he/she/they can foresee, as a Landlord you can acknowledge their concerns and record this formally.
Finally a formal Check-out has to be conducted when the tenant has moved out. By having a formal Check-in/ Check-out and Inventory conducted this will ensure the Deposit issue is handled fairly.