After purchasing your buy-to-let property, there’s still the issue of turning that investment into profit.
Landlords buy a house to rent for income, but it is more than a matter of balancing the accounts. Every month a property sits empty it’s costing you money, so how do you go about minimalizing that time?
Do Your Research
Even when the property you’re considering fits the bill financially, it might not suit your portfolio. Don’t just rely on the vendor’s brochure. Be better than your peers and visit the property, while you’re there explore the local area. Grab a coffee and spend some time talking to local businesses and get an idea for the type of tenant typically found there. Spreadsheet demographics can be manipulated, but personal experience can help you decide on how to renovate and target a better tenant.
This may not be intuitive, but you have to understand the community you are renting to if you want to be able to inspire the loyalty tenants need to feel in order to stay for years or decades, rather than just until something better comes along.
Renovate to Suit Your Target Tenants
Underspending is just as bad as over spending when it comes to renovations and refurbishment. It’s all well and good having a quality finish to every room, but not if it prices you out of the market for the street. Before you pay out, consider the basics. Every residential area has expectations from a property. Little things like being able to view the property at a convenient time and having the rooms deep cleaned before a new tenant moves in will show that you have a pride in your product. If you don’t have a sense of care and duty to your premises, why should your tenant?
Renovating to attract long-term tenants involves using higher quality materials and better workmanship. It is more expensive in the short term, but it allows your renters to feel like the residence is truly their home, not just where they happen to be living. That kind of pride in the dwelling pays off not just in terms of the rental not being empty, but in lower repair and maintenance costs for as long as those tenants stay with you.
Be ‘Present’ as a Landlord
That is not to say turn up personally when the boiler breaks at 2 am with your gas engineer, but be covered for the eventuality. Where there are guidelines from the local councils, follow them. Get to know the housing teams. Earn a reputation with them and your tenants by responding quickly and with the same level of attention to any problems that might arise. If you use a letting agent, make sure they have the same focus.
Ask the agent to draw attention to aspects of the contract that are important to you and to your property when signing up tenants. A good measure is to consider how you would feel if it was your own home. If a tenant can trust their landlord and their agency to make repairs effectively they are less likely to look for somewhere else when something goes wrong. Like in any other transaction good will hard to account for financially, yet vitally important to long-term business. Better still, a helpful and accessible landlord will receive plenty of recommendations which in turn builds a waiting list of tenants who want the same level of service.