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Using a letting agent will seriously erode your profits especially in a climate with increasing regulation and cost. Moreover, as I have written about previously, letting agents do such a bad job, not only will you save money by becoming a landlord and managing your property but you’ll also have less stress. In this post, I’ll outline some of the things I’ve found helpful in how to become a landlord.
- Don’t use a letting agent
Not using a letting agent will save you around 10% of your gross rental income, moreover, you will do a significantly better job. OpenRent makes this process easier by advertising your property, generating contracts and taking the DPS.
- Do your own inventory and check-in/out reports
Becoming a landlord is all about doing it yourself. Inventory and check-in/out reports aren’t difficult and you’ll save a decent amount of money by doing them yourself. I’ve written a post that explains how to do inventory and check-in and out reports here.
- Keep track of your accounting
No surprises here, you need to keep track of income and expenses as a landlord. It’s not difficult so there’s no need to pay for an accountant. I use a simple spreadsheet, you can download preformatted spreadsheets like this one that makes the task easier.
- Track depreciation
Many landlords forget this one but it’s something you should definitely be doing. It’s easy to set up and tells you how much money you should be saving for when washing machines and the like break down. You can see how I track depreciation with a simple spreadsheet here.
- Find a reliable handyman
Getting repair work down is a common landlord task so you’ll want to have a handyman you can rely on. I’ve found the MyBuilder website useful for posting jobs and found good tradespeople I now contact directly.
- Document your appliances and model numbers
If like me you have a fitted kitchen in your rental property then only certain sized appliances will fit. If your washing machine breaks down and you need to arrange an urgent replacement (while you are on a sunny beach holiday) then it’s good to know what to order without visiting your property.
- Know who to contact when things go wrong
This could be a local firm for fixing your boiler or specialist for fixing appliances. Do the research now instead of when it’s an emergency.
- Get insurance
There are various insurances you can get as a landlord and differing opinions to what’s essential. I have general insurance that covers furniture and appliances + liability insurance in case a tenant has an accident and decides to sue. The landlord’s insurance I use also has a 24-hour helpline that can be given to tenants in case of an emergency, for example, if there’s a leak.
- Understand the regulations
Obviously keep up to date with your responsibilities, it’s not that hard. Gas, energy and electrical certificates all need renewing on varying frequencies. You can read more on the government’s website.
- Do property inspections
From my experience, letting agents promise to do property inspections but never do. When you become a landlord you will want to keep your prized financial asset in good order so doing regular inspections is part of the job. This can often be done when visiting for another reason so there’s no need to make a specific appointment with your tenants.
Those are my top 10 tips for how to become a landlord, if you have any questions or know of any other suggestions then please leave them below.