12 top tips for landlords
What is the trick to never losing on a buy-to-let? Property investment expert suggests some very shrewd moves to ensure a steady income..
Owning investment properties can be a scary business from a financial perspective. What is the trick to never, ever sitting with a vacant property? What if a tenant absconds? How do you keep a happy tenant? How do you get paid on time?
Well here are some of my tried-and-tested tenant tips....
1. Forms for everything. It is very important to file all your correspondence regarding your rentals.
2. Everything in writing. It is so easy for people to misinterpret a verbal conversation or agreement. For your own protection correspond in writing.
3. Meet your tenant. If possible, meet your tenant. Even though you have bought property as an investment vehicle, it is still important to realise it is "a people business". Meeting your tenant can often lead to a longer tenancy and better relationship.
4. Send your tenant and/or agent a gift? Wow! How many of us even think of our tenant or agent as really adding value to our investment? The tenant and agents play a huge role in the income potential of your property, so look after them. This way they can really know you appreciate their business. Send the gift to your agent before he or she has found a tenant for you - especially if you have bought into a new development with many similar types of properties as yours....hopefully your agent will focus on yours!
5. Inspect what you expect. How often do we just give our properties to a rental agent to manage, but we did not even discuss what we expect of the agent/tenant? Do a list of what you require of the agent and ask for written feedback in connection with these requirements.
6. Give clear instructions to the agent. Make sure that the agent understands your requirements and that his or her company can assist you with specific requirements.
7. Give tenants an "appreciation bonus". Penalties are illegal, so try a different tack. When you sign the lease, arrange that should the tenant agree to your requirements (examples include: rent paid on last day of previous month; and agent/owner to check property (with list) every 2 months, and all in good order), you will pay a certain amount of the rent on top of their deposit. They may not take this off the rent. This way their deposit builds up into a greater lump sum which could assist them to buy in the future. This also protects you as you hold a larger deposit as the rental time increases. Best of all, when the tenant leaves, you will probably find that they have already found your new tenant for you! Good news spreads. This is one of my greatest and most successful methods of tenant retention and procuring new tenants.
8. Debit order - offer another appreciation bonus. This is a bit of a hassle to set up with the bank but, once done, is really worth it, as you are then pretty sure when your rent will be paid into your bank account.
9. Use furniture. One of the smartest ways to obtain a higher rental is to furnish or partly furnish the property and, of course, these days you can buy so much over the internet. Furniture can attract tenants who are not staying for too long, shopping to buy a property or are young students/employees.
10. Upgrade the property. Another way to obtain higher rentals is to speak to your tenant as find out what would create a better living environment. Often it is a small item like a heater that makes a difference. If it is a "big ticket" item, increase the rent, or ask the tenant to pay half. This then becomes part of your property for the next tenant as well. Happier tenant, happier landlord, more rent, better investment!
11. Offer a weekly cleaning service. If you are letting to students, for example, you may want to throw in a weekly cleaning service. This way you would have a "direct line" to what is happening in your property. If there is anything that needs attention, you can attend to it immediately.
12. Buy rental insurance. If your tenant absconds you are covered for a certain period of time. I have discovered two companies that offer rental insurance: one has pure insurance and the other is a company that handles the rentals as well.
Article by: Janine Barry - www.realestateweb.co.za