f you’re thinking about letting out a property, you need to make sure that you protect yourself in any way you can. Being a landlord is risky business. It’s not as easy as you might imagine at first. In fact, it can be a minefield. If you get something wrong along the way, you can end up losing time and money. Before you start looking for tenants, here are six things that you need to know.
- You need at least two references from each tenant
When you let a house out to someone, you need to know who they are. You should insist on at least two references from people who know them. These references could come from their employer or their old landlord. You should be quite rigid when it comes to this aspect of negotiations. Once you have the referees’ names, make sure that you give them a quick courtesy call.
- Landlord insurance is a must
You need to make sure that you get landlord insurance as soon as you decide to let out a property. You will need to have the cash to cover any accidental damage or problems with your tenants. There are many in-depth landlord insurance policies out there, and so you need to find the one that suits your needs. Spend some time shopping around until you find a deal that suits you. You ought to check to see what the policy covers before you agree to its terms.
- Some tenants will cause you trouble
There will be certain tenants out there who will cause you no end of problems. No matter how good people sound on paper, you just don’t know how they will act until they move into your property. You should prepare yourself for every eventuality. That means that you need to make sure that you are ready to cope with any issues that they might have. Remember, as long as everything is legal and above board, you should have no issues.
- You should avoid tenants with pets
Sometimes, you will come across potential tenants who have pets. You might find the idea of letting them stay tempting, but you should think twice. If you worry about damage to your property, pets are the worst possible option for you. Animals, such as cats, rabbits and dogs, tend to bite into material and things. If you have a furnished apartment to let, you will find that a cat will ruin any sofa you buy. It’s not worth it.
- Tenancy agreements should be solid
When you create a tenancy agreement, you have to make sure that it’s secure. You should get a legal expert to help you with this step of the process. You need to ensure that everything is clear for both you and your tenants. If there is anything that you want to suggest, let the legal expert know about it. That way, you get total control over the agreement, and so you get to decide what happens.
- You always need a security deposit
Sometimes, tenants will damage your property. That is part and parcel of being a landlord. What you need to do is make sure that you have the funds for those repairs. Before someone moves in, you should make sure that you get a security deposit from them. If you’re buying a home to let it out, a deposit will be important. That way, if something does go wrong, you have financial security. Most landlords insist on a security deposit.
You can make a load of money if you are a landlord, and so it is well worth it. If you want to create a second income stream for yourself, you should consider this idea. But, remember, if you want things to work out, you have to be careful and follow this advice.
Photo: Linus Bohman