Rental property can still be one of the most lucrative investment strategies – so long as you take the right precautions. Here are a few common buy-to-let blunders and how to avoid them to ensure that your rental property investment is a success.
Buying a property without getting it surveyed
As the property owner, you’re responsible for repairing any wear and tear. Buying a deteriorating property could result in heavy repair costs that could eat away at your profits. Before buying a property to rent out, make sure to hire a surveyor to check for any damage that could result in costly future repairs. Hiring a surveyor may cost a couple hundred dollars, but it could save you buying a property that could potentially cost you thousands in upkeep.
Taking on tenants without screening them
No property owner want to take on bad tenants. As desperate as you are to fill your property, you should always take the time to screen tenants. This could include doing a credit check that will determine how good they are paying bills on time, as well as getting a reference from a previous landlord to check that they’re able to keep a good relationship with property owners. Many property owners set rules to minimize damage to the property such as no pets or no smoking. Getting a professional contract written up and having them sign it could further protect you from tenant-related stress.
Taking ages to reply to tenant requests
Fast communication is essential when owning rental property. If a pipe bursts or a storm rips tiles off the roof, tenants will expect a quick response and action. In fact, it could be illegal to let them live in such conditions for any more than a couple hours. Make sure that you’re always on top of phonecalls and emails from tenants – you could hire a property manager to handle this if you’re unable to act fast yourself.
Trying to do everything yourself
Many property owners will try to save money by handling it all themselves, but this can cause a lot of stress. If you’re not a dab hand at DIY, you’re better off always hiring a handyman to take care of repairs. A property manager on tenancy agency meanwhile could help to handle tasks such as marketing your property, screening tenants and collecting late rent payments. You could even look into utilities billing services and fit-out services if you own several properties. On top of this, you may want to have a solicitor and an accountant on call for helping you with the financial and legal side of things.
Forgetting to keep financial records
Property investment can be a side hustle for many people, but it could still be earning you enough income to affect your taxes. If your earnings are large enough to be taxable, make sure that you’re paying this tax every year by filing a tax report, as well as keeping clear financial records as proof. You may be able to deduct any expenses spent on property investment from your tax.