5 Common Mistakes First Time Landlords Make & How To Avoid Them

5 common mistakes first-time Landlords make & how to avoid them
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1. Undermining the importance of parking

Many Landlords have liked buying in central locations, close to mainline stations and employment hubs, however, with the rapid emergence of people working from home – it could be said that this is not where the demand is anymore. Renters are willing to look further out than they traditionally would have – in search of good communal spaces, gardens where they can take a break from work, and most importantly, good parking facilities so they have the ability to come and go and know their parking requirements will be met. Parking has become even more important during the COVID-19 pandemic as people avoid public transport for now.

2. Not buying a property with an ‘edge’

Every property has some good and bad points, hence why we all buy different types of properties according to our taste, desires & budget. When we say ‘edge’ we are looking for a property – and a bit more. For example, a property could have a larger than average garden & privacy due to being a corner plot. It could have a garage which is useful for storage or converting into further accommodation later. Another scenario may be that the property is an end of terrace and could be converted into two flats with two separate entrances. If buying a flat, it could be no service charge payable and only a small amount of costs for the annual ground rent charges.

3. Timing their entry into the marketplace badly

There is a saying in estate agency that when mortgage brokers invest in property; they tend to buy at the height of market. The reason around this is because when the property prices start increasing, herd mentality kicks in and others jump in due to FOMO (fear of missing out) and so prices rally further. The mortgage broker is so busy arranging finance for everyone who is buying, and ultimately making good commissions. This is normally the point whereby they have saved enough funds to be able to eventually invest in a property themselves – this has often been not the best entry point into the market.

4. Not doing enough property inspections during the tenancy

Tenants these days are making the property they rent more homely than ever before. For example in a recent landlord survey, it found that 63% of renters had redecorated their home and 53% made changes to their garden with their landlords permission. Some landlords in the past have had the attitude that their job is done once a tenant moves in and that they can check their account just once a month to ensure the rent is paid. In reality, this could not be further from the truth – inspection visits should happen minimum three times per annum – either physical or via video inspection. It is never a good idea to skimp on your investment and the longer you leave a problem, the worse and more costly it will be to sort out  a problem which was a relatively small issue to begin it. Be proactive, not reactive. Snuff out any issues quickly.

5. Skimping on tenant referencing

Landlords should not undermine the importance of vetting a tenant. It is common to get excited once you have a prospective tenant lined up and everything looks great on the surface. The reality is that people can tell you anything they want you to believe and landlords should not leave this down to chance – they must screen tenants to check their employment status, credit rating, previous landlord reference and rental history, salary details, checking if they have the right to rent in the UK legally. If you do not properly screen tenants, there is a greater chance of you having to evict a tenant, lose rental income and with the current backlog of eviction hearings due to the Covid-19 pandemic – you could be waiting a long time for a court hearing and this could be one of the most costly mistakes that a landlord could make. We recently wrote another article specialising in this topic which you can read here.

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