Are you aware of the risks that could threaten your lettings business?
Monday 15th December 2014
There are many reasons why you choose to let your property, but being a landlord is not without challenges and there is risk. As the leading association for private residential landlords in the UK, the NLA is keen to ensure that you fully understand the threats to your letting business.
We have prepared some advice below on two of the biggest issues that landlords face today:
Almost a third (32%) of landlords have had problems with late/ non-payment of rent in the last 12 months*. The average amount of rent arrears owed to landlords before they can even serve a notice is over £1500! Once you factor in the legal fees and the time it takes to evict a tenant, your expenses can run into thousands.
It can cause an unnecessary gap in your finances; affect your ability to keep up mortgage/bill payments, maintenance of your property and other commitments. But what would you do if your tenants ran into arrears? Here are few tips to bear in mind:
• Sort your budget – if you work 10 rent payments into your budget rather than 12 you will be able to absorb a shortfall should it occur
• Know who you are renting to – it sounds a silly thing to say, but do you really know your tenants? Did you know you can minimise the risk of letting to unreliable tenants by using the NLA’s very own tenant checking service?
• Nurture tenant relationships - Meeting your tenants in person is essential to establishing a positive relationship from the start. In addition, providing good customer service is vital; always ensure repairs are carried out promptly.
• Get best practice guidance – Our latest campaign is all about managing risks in your lettings business. Download our landlord’s guide to rent arrears here
Interest rates have been at their lowest for a long time, but with rises likely to occur in 2015, are you prepared to cope with the effects? Think about the following:
• Would a rise in interest rates affect your mortgage payments? If so, to what extent?
• Would it affect your ability to secure future buy to let lending or to re-mortgage?
• What options do you have to make up for a potential rises to your costs? Think about assessing your savings plan, potentially raising rents and re budgeting.
Our advice is to begin to consider your options now, so when interest rates rise hit, you’ll be able to soften the blow.
Remember, this is just one aspect to bear in mind when running a successful lettings business. The NLA is here to support you through every stage of your lettings journey, from property acquisition through to divestment, and everything in between.
Even experienced landlords come across new challenges so it’s advisable to have access to advice and guidance. For more information about how we can help you, and the benefits of NLA membership, click here
Editorial Contact Details - Conor Shilling