As we face uncertain times especially with COVID-19 it is extremely important to have a plan of action as a Landlord. If you are just starting out on your buy to let journey or have had years of experience behind you, most investors would agree that avoiding any kind of mistakes on your journey is the key to turning a profit in a competitive and tough market.
Not only can it prove costly on your bank balance but also costly in terms of time and energy. When done right, you can expect a healthy return on your investment (high yield) and a steady increase in the value of your portfolio.
To help you avoid any mistakes we have put together a simple guide on what to avoid with these 5 mistakes.
Mistake 1: Not Purchasing Landlord Insurance
Owning a property comes with many risks from unfortunate situations such as fires, flooding and damage that may have been caused by a tenant. Many landlords have made the mistake of not buying landlord insurance by simply not realising that it’s something which is needed in order to protect themselves from any unfortunate event.
Standard home insurance is not enough when dealing with rental accommodation! You need a specific landlord insurance policy. Having a tailored landlord insurance policy in place can protect you against risks and spending the money at the beginning rather than at a later date will save you an awful lot of time and money in the long run.
Mistake 2: Not Enough Research On The Market
Is there anything about the property you are interested in that requires extra research such as Houses of Multiple Occupation (HMO) or properties built not to standard construction? Failing to understand the type of property you are interested in purchasing or have purchased can have huge financial implications. Not setting up your property from a correct legal standpoint will bring you hefty fines in the future.
Mistake 3: Failing To Carry Out Regular Inspections
Having tenants into your property is great! and it can be tempting to think “job done” and nothing else is left to do. But you at all times need to keep a close eye on your property investment.
Everyone has heard of complete horror stories of tenants not looking after their rented accommodation or even worse finding out your property has been turned into a criminal cannabis farm! While most of the time these things are highly unlikely to happen it is very important to always carry out regular routine inspections once every few months for signs of damage or usual wear and tear within a property.
This also can help build great relations between a landlord and tenant which is certainly not a bad thing!
Mistake 4: Not Protecting a Tenants Deposit
This mistake is often a beginner rookie mistake by many landlords. Every deposit must be protected in one of three government-backed deposit schemes. You can find those schemes here:
The tenant deposit must be protected within 30 days and the tenant must be issued with key information which can also be found here
If for whatever reason you forget to supply the key information you may be ordered to pay the tenant 3 times the deposit in compensation.
Mistake: 5: Getting Attached
This is one mistake we have seen over and over. Many landlords often treat a rental as if it’s their very own home and waste time and money on expensive fittings, fancy art decor and so much more. Not only does that eat into your profits it can also put off many future tenants as often your taste and style is different to many other people. Keep it simple and remember this is a business you are running!