OK, so I used to be a letting agent...
This means that I know a bit about about investment property management... but I do tend to keep the letting agent thing quiet at parties!
I'm not saying I like property management... in fact it's a total pain in the behind. That's why I quit!
But... it's an unavoidable part of property investment and worth knowing about.
Investment property management is a pretty vast subject. But I will give you an introduction and some insider landlord tips and help that I've learned over the years.
Property management is a minefield of ever-growing red-tape and legal requirements so I would definitely recommend that you consider using a good letting agent to manage your properties for you.
Plus, you're looking for financial freedom, aren't you, not another JOB!
This will make sure you stick on the right side of the law and allow you to focus on your business.
The investment property management process kicks in after you've let your property. The first investment property management task you're likely to encounter after letting is either going to be a rental property maintenance request or your first rent collection.
If you've arranged a standing order with your tenant, this should go quite smoothly. Just check your bank account and enter the payment into your investment property management software, if you have it.
Obviously, if the tenant hasn't paid then you have a late rent situation:
Read our section on rent guarantees to find out how late rent can be a thing of the past.
When it comes time for tenancy renewal, you have a few different options.
If your original lease states that the lease will renew on a periodic (also known as month-to-month) basis, your tenant will then be able to quit the property at one month's notice. This option suits some circumstances but it can work against you if your tenant decides to leave at a quiet time of year like Christmas.
Alternatively, if there is no periodic clause in your lease, you can allow it to renew under what is called "tacit relocation". This just means that the lease will renew under exactly the same terms as the original lease.
Lastly, you can get your tenant to sign a fresh lease. This is only really helpful if you need to make changes to the existing lease -- e.g. rent increases -- or if you have agreed to extend the period to give your tenant more security.
Scheduling regular rent increases is an important part of investment property management. It ensures that you always get the most out of your investments and keep up with inflation.
It is obviously going to be a sensitive subject with your tenant though, so it's best approached with diplomacy!
If your tenant threatens to move out if you change the rent, you need to be pragmatic. In this situation I would always just leave it if they are a good tenant, due to the hassle and expense of having to find a new one.
Here are some rent increase guidelines:
Problem tenants can largely be avoided by thorough vetting procedures. However should a tenant start antisocial behaviour, it is important to confront it immediately.
Do remember that there are two sides to every story so if you get a complaint from a neighbour, do your tenant the courtesy of getting their version of events.
If the problems persist, arrange an inspection and write to the tenant explaining that the behaviour is unacceptable and explain that their tenancy may be at risk if it continues. Involve the council if necessary -- most councils will have a dedicated department that will be able to assist with problem tenants.
More info on the various laws, responsibilities and taxes that affect you as a landlord can be found on the gov.uk site.
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