Being a landlord is not as easy as it looks. There is a lot of hard work involved, and its easy to mess things up – and lose a lot of money.
What are the qualities needed to be a landlord?
I’m hoping for some suggestions in the comments, but here are my thoughts:
1. You need to be reasonably intelligent
There are a lot of things you need to know about to be a good landlord, and most of them are not easy.
For example you need to have a grip on your finances and understand the financial aspects of buying property and managing the income. Not to mention tax! Then there are all the legal issues, the regulations you must comply with.
It can be a steep learning curve.
You can of course leave it all to your agent. But as with any business activity, it is really best to understand what you are doing properly. Not all agents are reliable.
2. You must be good with paperwork
This follows on from 1 really. There is a lot of paperwork involved in renting property – tenancy agreements, prescribed information forms, schedules and inventories, tenant information forms, gas safety certificates, receipts and invoices, the list goes on and on.
You need to keep all these in order so you can get at them when needed. You can’t pooh pooh the paperwork in property.
3. You need to be practical and not afraid of hard work
Rented properties need looking after.
- You need to get them ready for the tenants to move into
- You need to deal with problems that arise during the tenancy, and
- You need to clean them up, and get them back into a proper condition again before you re-let them.
You can of course pay people to do it all for you, but most landlords – those that self manage anyway – do a lot of the work themselves.
Cleaning and decorating work is a given. Many landlords come from a building background and do all the repair work. I have also known landlords get qualified as gas installers so they can do their own gas inspections.
You also have be face the possibility that you may get your property back in a disgusting condition and so have to spend several days up to the armpits in rubbish, grime, poo, and other unmentionables.
4. You must like people
Landlording is a people business and landlords need to be people persons. You have to be able to sum up potential tenants and then deal with them once they are in your property.
You also have to deal with a lot of other people such as council officials, accountants, people to do repair work and your gas inspections, maybe the odd lawyer or two.
5. You need to live reasonably near to your property
Some landlords are able to manage property successfully at a distance. For example one of my landlord law members lives in Switzerland and has rented to tenants in England without an agent for years.
However on the whole it is best to be reasonably proximate to the property you are renting. Things go wrong and your tenants will expect you to turn up and sort them out.
Then also, it is a good idea to keep an eye on the property and make sure your tenants are looking after it (and not turning it into a cannabis farm). Its difficult to do that if you live in Cornwall and your rented property is in Carlisle.
Unless you decide to use an agent of course. We will be looking at agents later.
Anyway, those are my suggestions for landlord qualities. Four personal ones and one practical.
What are your suggestions?
You must have an interest or at least follow what is going on in the economy both at home and globally. Everything that goes on in the economy will directly affect your success as a buy to let investor. Interest rises; VAT rates; inflation; are we heading for recession or boom times etc. Being a landlord is not just about you and your tenant, you are not in a bubble. You are directly linked to the economy and you must watch it and what politicians are talking about like a hawk.
Most importantly you must be aware of the legal duties of being a landlord. You will be expected to know about handling tenant deposits, HMO licensing, keeping the property in line with legal requirements, there are so much lines you have to tow as a landlord and if not followed can result in hefty fines and even imprisonment. feel free to visit rentdirectuk.co.uk if you want to let your property without a letting agent
I would just make the comment I have for many years. Any self managing agent who has never experienced serious problems is either a professional and experienced doing it full time, or has been extremely lucky, or has had the same tenant in the property for years, or is using a quality agent, or is a rogue who just doesn’t care and barges their way through their lettings.
I have been in this industry almost 25 years it was complicated enough then and is an absolute minefield now for the well intentioned, but unwary.
My view rwmain that just as I couldn’t perform heart surgery on you, or MoT your car, or sell you a pension, why on earth should I be able to provide you with such an essential element as housing without being duly authorised?
This should apply to ALL agents and landlords and should be enforced with Dracomnian penalties for any illegal, unauthorised letting.
First rant of 2015 over!!!
Apols my rant whould of course have started “…self managing Landlord…”
Tessa when will you put an edit feature for posters?!!!
To be a really good landlord, I’d say a person needs a stronger kit than this.
At least in London, but I assume it’s true for the rest of the UK as well, the renting sphere has become this complicated network of strings where you both need to manage a lot of things at the same time, but also any mistake in either of them can stir everything into a hot mess that can ruin your investment, but also wreck your nerves as well.
Far too often, I’ve seen landlords who are unprepared to solve a complicated situation and make everybody happy without emptying their bank account.
Solving problems is really what landlording is about, don’t you think ?
Anyone can learn how to prepare and apply documentation. Be it 10, 20 or 50 forms, it’s a repetitive action which follows a straight procedure. It can be memorised, or even more simple, you can follow the countless books, guides and articles about how to do this.
Not everyone can handle a sticky situation where tenants, servicemen and finances all pull your decision in different directions. I’m coming to this blog post from just a case like that:
http://www.landlordlawblog.co.uk/2015/01/08/can-tenants-insist-on-plumbers-doing-essential-repairs-out-of-office-hours-to-suit-their-convenience/
Landlording comes with the job of taking hard decisions, the outcome of which is not always guaranteed or even visible. The financial risks are burdening and the fact that your business is directly linked to somebody’s home is also very hard to digest.
You need to be soft and act like a human being, but also be ruthless to protect your business and own financial well being..
I know I probably won’t be a good landlord… But that’s fine, I see everything I need (and don’t need) to see out of both viewpoints..
Good luck to all new landlords in 2015, and don’t make us tenants hate you :)
Audrey speaking as one who’s job it has been for 25 years to often defend possession proceedings in court and through housing advice I have to say it is anything but a repetitive action.
Certainly the forms remain the same but the true life circumstances are many and varied and rarely fit those tick boxes neatly. Thats why I like my job,its all unpredictable jagged edges and strange conundrums.
A solicitor on a training course recently told me that he had successfully defeated possession action by a housing association on no other basis than the tenancy agreement said “No Pets” plural and the tenant in question had one dog, singular. The whole case fell apart because of the letter ‘S’.
Annoying and costly if you are a landlord, a source of fascination for lawyers and housing advisers
That might be completely true Ben. I’ve never been a landlord and at least the regular papers seem like the boring, tedious thing you do with each tenant.
In any case, you only prove my point further.
As for the case you described, I can only say that there are professional services, because one man/woman can’t know it or do it all.
I’ve seen superhero landlords, who somehow manage completely on their own with two – three properties. But there again, only a couple of times.