6 Tips for Reducing Risk for Buy-To-Let Business Owners
If you’re allowing complete strangers to live in your property, then you’re naturally assuming a degree of risk. After all, there’s no perfect way of knowing in advance whether a problem is going to come up. The environment for buy-to-let landlords is getting slightly more hostile since falling profits and rising taxes are all going to have an impact on your bottom line. Even with the best possible screening practices, the occasional misstep is inevitable.
On the other hand, there are several steps we might take to reduce the risk. Many of them can be taken without spending a huge amount. Let’s run through a few of the more effective ones.
Screen tenants
If you have a property sitting empty, then you might be tempted to make compromises in order to get someone in residence, and pay rent every month. But it’s important to consider that it’s much easier to get a tenant installed than it is to get one evicted. Screen your tenants thoroughly, and, ideally, interview them in person before handing over the keys. Make sure that you have performed the Right to Rent checks, and ensured that the tenant has the legal right to live in the UK. If you don’t, then you could be fined heavily.
Regularly inspect the property
Allow your property to go for years without being inspected, and you’re inviting trouble. Problems might develop, unnoticed by both you and the tenant. You’ll also send a message to the tenants that you don’t much care about the state of the building.
Insurance
Obviously, insurance offers an excellent way to offset any remaining risk. You’ll find specialised landlord insurance products, tailored to the needs of landlords – they’re well worth considering.
Take advantage of government subsidies
It might be that you can claim support from the government when you’re making improvements to your property. Applications to the Green Homes Grant are now closed, but it’s still worth keeping a lookout for future incentives – like the boiler upgrade scheme.
Keep the lines of communication open
Turning up unannounced to carry out an inspection, however, is a no-no. It could be considered harassment, which could land you in trouble. Perhaps just as bad, it will create a bad vibe between you and your tenant, which could result in stress later. Be courteous and professional, and provide notice when you’re going to send someone over.
Stay on top of appliances
Certain appliances, like boilers, will need to be serviced regularly. You’re legally obliged to provide tenants with a gas safety certificate at the outset of the tenancy; fail to do this, and you could face a hefty legal penalty.
