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  • Common mistakes Landlord's should avoid

    There are many simple mistakes that Landlords can make when renting their property, here are a few of the main traps to avoid.

    Not carrying out background and reference checks on tenants

    It is all too easy to find a tenant and want to move them in as quickly as possible in order to keep your property filled. Before rushing in you need to remember that your tenants will live in and effectively have control of your property. Should you need to later down the line, evicting a tenant can be a very difficult process. If you are employing an agency they can run these checks for you, such as identity checks, references, and credit checks. Alternatively make sure you check everything yourself, it will be worth it in the long term.

    Failing to protect the tenancy deposit

    Tenancy deposit rules state that if you take a deposit as a Landlord, then it must be protected within a Government approved scheme. Whilst you don’t have to take a deposit, most Landlords do, and you have 30 days from the date the deposit was provided to protect it otherwise you will have broken the law.

    Forgetting to protect the deposit can mean that your rights to evict a rogue tenant are denied and you cannot serve a valid section 21 notice if need be. It also means that your tenant has the right to bring a court claim against you for up to 3 times the sum of the deposit because his legal rights have been denied. Don’t be fooled, in many cases this does actually happen where tenants are up-to-date with their rights.

    In addition to this you are also required to serve the prescribed information on the tenants within 30 days.

    If you are unsure, use this tenancy deposit compliance checker.

    Landlord mistakes

    Not realising you need specialist landlord insurance

    Thinking that an ordinary home insurance policy covers you for your rental activities is a common mistake to make. However, once you are renting out your property you will require a specific landlord insurance quote and policy to make sure that your rented property is fully covered.

    A landlord insurance policy would usually include buildings insurance, landlords’ contents insurance and landlord liability cover. There are many other insurance options to consider too, including accidental property damage and lost rental income/rental default cover.

    Not knowing your legal duties and obligations as a Landlord

    You have many legal obligations as a Landlord, and whilst your property is an investment for you, you must remember you are also providing someone with a home. With this in mind there are a number of health and safety regulations to get your head around and it is important to investigate these beforehand. For example, you must give your tenants a copy of the gas safety check record prior to moving in and provide an Energy Performance Certificate. If you are renting out a large HMO property then you need to provide fire alarms and extinguishers. Be sure to know your responsibilities and keep up-to-date with changes in law.

    Not dealing with rent arrears quickly

    One of the toughest mistakes can be not dealing with rent arrears quickly. The first initial process of dealing with non-payment of tenants is to talk to them about the seriousness of the situation and the risk they are running of losing their home. If tenants fall into arrears of two months then you need to take immediate steps by serving a section 8 notice to gain possession of the property. Bear in mind that should the tenant continue not to pay that arrears of at least four months will have built up before a possession order is given.

    Allowing tenants to run up a debt that they can never afford to pay is not a wise thing to do and whilst you may feel compassionate to their situation, you will need the income to cover your own expenses.

    You want to avoid this situation wherever possible. Leda from Location Property Group advises: “When dealing with late rental payments, remind the tenant when they are a few days late and follow up again a few days later. We email and text a friendly late payment reminder 3 days after payment is due. A few days later, we do the same again.”

    Doing it all by themselves

    Finally, reaching out for help is something that can be beneficial for many landlords. As William Scott-Moncrieff, Director at Ogilvy & Sneyd, advises: “Being a landlord can be a stressful, trying endeavour, but one of the most common mistakes that a landlord will make is thinking that they have to do it all themselves.

    “Many don't know when they should relieve control of every small part of being a landlord. At some point, it simply makes sense to get help. Whether that means hiring someone to take care of the maintenance, or even using a property management company for the whole thing. Relieving control means that you'll have more time to enjoy the profit you're making instead of worrying about every little thing that could go wrong.”

    Want to find out more about Bluedrop's Landlord Insurance?
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