Tips for First-Time Landlords

There are numerous responsibilities that come along with becoming a landlord. For first-time landlords, it can be daunting figuring out where to start, how to succeed, and the best practices of the market.

If you’re a first-time landlord, read our guide to help you navigate landlord duties and excel in your new venture.

Legal and Financial Obligations

It is imperative that you are familiar with your legal and financial obligations when becoming a landlord. Property and tenant management can be complicated, so make sure to consider the following areas:

  • Legal fees (one-off, recurring, and potential),
  • Licenses,
  • Deposit protection schemes,
  • An Energy Performance Certificates for every property,
  • Your obligations as a landlord to your tenants and property.

Preparing a Property for Rental

Following on from your obligations as a landlord, it is your responsibility to make sure that your property is suitable and safe to be inhabited. It is also wise to consider your target demographic of tenants (for example, whether you primarily would like long-term lets, short-term, or student lets) and configure your property to reflect this.

Make sure that you’re taking into consideration:

  • Safety checks of electrical, plumbing, and heating systems, the structure of the building, and any other areas which could cause hazards to the building’s occupants,
  • Conducting routine inspections, usually quarterly but also ad-hoc,
  • Whether you’ll be offering the property furnished or unfurnished,
  • How you will source suitable tenants for your property, whether you do this yourself or using an external service.

Ongoing Tenant and Property Management

As a first-time landlord, you may not necessarily yet know all of the ins and outs of tenancy and property management.

  • Will you be managing the tenancy yourself, or outsourcing this service?
  • Who do the tenants need to contact in case of maintenance/repairs/emergency?
  • Remember you need to give at least 24 hours’ written notice of inspections to tenants, otherwise it is trespassing and illegal to enter the property.

It is vital to be aware of the negatives of owning rental property. You may find yourself out of pocket if a tenant is in rent arrears or between tenancy periods where you need to cover the lack of income.

With the Guaranteed Rental Scheme, Orchard & Shipman can guarantee landlords fixed rental income. Our dedicated team of skilled property managers can oversee the end-to-end lettings and management process, and you will receive your rent each month in advance. Benefits of using this service include no extra fees or set-up costs, ongoing tenancy management on your behalf, no costly void periods even when your property is unoccupied, and no risk of tenant arrears or legal eviction costs. Our guaranteed rental scheme can bring you peace of mind and financial stability, reducing the risks and challenges that you’ll face as a first-time landlord.

General Best Practices

In addition to the specific topics above, here are some general best practices you can adopt as a first-time landlord to ensure the best experience for you, your tenants, and your property.

  • Tenancy agreement documents are not a legal requirement, but they are extremely beneficial to both you as the landlord and to your tenant(s), so it is well worth drawing up this document either yourself or through a management agency,
  • Comprehensive insurance cover for your property – have peace of mind knowing that your money is safe,
  • Research well – understand the law, know your rights, and put a plan in action,
  • Stay organised,
  • Be smart with your money and minimise the financial risks associated with being a landlord by using services such as the Guaranteed Rental Scheme.

Asset Management Awareness Month – March 2021

March brings us Asset Management Awareness Month, highlighting the importance of good asset and property management practices for businesses and property owners. At Orchard & Shipman, we know the importance of managing your assets responsibly, smart planning for investments, and maximising efficiency in the property investment market.

Property management focuses on the logistical, daily responsibilities of property investment, whereas asset management is more dedicated to adding value to property investments. A combined approach – property asset management – is a comprehensive strategy to increase the value of your investments while also reducing overall costs and maintaining efficiency.

“What do I need to consider for my property asset management plan?”

The best property asset management plans are well-rounded, comprehensive, and target the main aspects of property investment. It’s important to have a clear, long-term strategy to improve efficiency and avoid trial and error mistakes. Key parts of a good plan will include:

  • Clearly defining your business goals/objectives with regard to investment – what do you want to achieve? How will you achieve your goals? What do you need to do to maximise your investment potential?
  • Financial requirements and limitations – do you have a strict budget? Are you allocating budget to cyclical and non-cyclical fees and costs? Will working with agencies save you money in the long-term?
  • Planning for the long-term – how will rent arrears affect you? How long can you afford a property to be vacant? How will you source suitable tenants?
  • Investment protection – make sure that your money is insured, giving you peace of mind that your money is safe and protected.

It’s also good to consider the diversity of your property portfolio; diverse real estate portfolios allow for larger income streams, involvement in multiple markets, and the suitability of properties for you/your company. While property investment can be rewarding, it can also come with large costs which could leave you out of pocket, including emergency repair costs, legal fees, and other unpredictable costs. Well-researched asset management accounts for ad-hoc fees and recurring high costs, and takes into consideration both the short and long-term challenges that may be faced. Furthermore, your investment portfolio should align with your business goals and objectives; it’s great to aim high but be realistic and strategic in your approach.

Good property asset management means strategising to maximise income stream, profits, and efficiency. If you own affordable homes but you’re managing/selling them at a loss, there is a better option: Orchard & Shipman’s Affordable Homes Management Service.

As a Registered Provider, Orchard & Shipman are authorised to manage social housing developed under Section 106 agreements made with local authorities. This means you can retain ownership of your affordable properties, which are a fundable and saleable asset, leading to an income stream that increases over time and builds long-term value.

Orchard & Shipman will assume full ownership risk for your affordable new homes, reducing the financial burden on you derived from tenants in rent arrears, void periods, maintenance, and cyclical repairs. The Affordable Homes Management service also includes tenancy management, estate management, and greater control over placemaking, offering a great all-around solution for property investors to achieve their investment goals.

Consider using the Affordable Homes Management Service as part of your property asset management plan.