One of the biggest fears facing a landlord is having a problem tenant. They may be noisy, annoy the neighbours, cause damage to property or pay their rent late or not at all. Other problems to arise could involve disputes surrounding deposits.
- Minimise the risk of a problem tenant by ensuring you carry out thorough credit and reference checks. Letting agents are experienced in carrying out such checks. It may be worth considering hiring an agent purely to carry out checks and find a tenant, even if you do not want a full property management service.
- Do not get angry with a tenant and be professional at all times. A landlord is a business person first and should treat tenants with courtesy.
- Keep on top of problems. A tenant who complains that repairs are not being carried out should not be seen as a problem. Repairs and other issues do not go away. Deal with them swiftly and do not ignore or allow your letting agent to ignore tenant concerns.
- Carry out regular checks of the property, especially if issues such as repairs or neighbour disputes arise. A landlord must give reasonable notice to the tenant, often 24 to 48 hours. Use these visits to also talk to neighbours to gain further insight into the behaviour of your tenants.
- Keep accurate records of the tenancy agreement, financial transactions and any correspondence with the tenant and letting agent. A landlord or letting agent is also advised to ensure they are present with the tenant is carrying out an inventory check at the beginning and end of the tenancy. This avoids any confusion when needing to use part of the deposit to meet the cost of damage or loss of property.
- Minimise damage by making the décor hard wearing. Use washable paint, stain protected carpets or laminate flooring for example.
- If a tenant breaks the law inform the police and if a tenant is late paying their rent for 14 days a landlord has a legal right to repossess a property. There are a number of tenancy eviction services, which can handle repossessing a property.
Renting out property is a business like any other and therefore any profits are potentially subject to taxes like income tax, corporation tax and capital gains tax. Similarly there can be tax benefits in the way that property ownership is structured, for instance some mortgage interest is deductible against tax for investment property, while it is not for private residences. The tax treatment of property ownership is fundamental to a well functioning investment.