Investing in the private rented sector is one of the best ways to make money at present, with many people finding themselves making better returns from becoming a landlord than they would with almost any other asset class. However, for some, there will still be worries about the amount of hands-on work and dealing with problems that will come from being a landlord as opposed to putting money into savings accounts or stock markets.
According to a new survey, though, the vast majority of landlords actually have a relatively easy time of it, with very few ever having to deal with serious problems and disputes with their tenants.
The survey conducted by My Property Inventories showed that over the course of the past 12 months, less than ten per cent of landlords have had to deal with a tenant dispute, which leaves more than 90 per cent with happy tenants and a relatively stress-free investment.
The company advised that the best way to make sure disputes are kept to a minimum is to start in the right manner with regards to the state of the property and the documentation relating to it.
Getting off on the right foot
From the off, a property should be in the best possible state for being let. When a tenant moves in, if a landlord has left the property in a good state of repair and cleanliness, then they are in the strongest position possible.
If the home has a garden, this should be well tended to and kept neat and tidy, while the inside of the house should be spick and span. Most landlords will tend to bring in a professional cleaning company for this purpose so they know it will be in the best possible state.
When the home has been fully prepared for a tenant moving in, you should also take some photographs for your records. On the off chance that disputes occur, landlords can often lose out because they don't have evidence to support themselves. Having dated photographs that prove the state of the home before the tenant moved in will go a long way to protecting yourself.
"Remember, you don’t need photos of every single corner of the property. Stick to the important things. Don’t try to produce a completely photographic or filmed inventory without a complete written accompanying inventory," said My Property Inventories.
Just as important as making sure the property is well presented and photographed is the documentation that a landlord can produce. If something is well documented and kept up to date, then everyone knows where they stand, and the chances of there being any disputes will be kept to the bare minimum.
"It is so important that agents and landlords ensure they have all the right documentation and evidence to improve their chances of resolving or winning a dispute," said Danny Zane, director of My Property Inventories.
The first thing any landlord in the UK needs to have in place is a contract with a tenant. Not only does this lay out things like the cost of rent, the length of the tenancy and the general rules of their stay, it tells the tenant important information like the things they are required to replace if broken or damaged through wear and tear, and what the landlord is responsible for.
It almost goes without saying, but having this information written down can help to alleviate a lot of confusion between the two parties, and will leave everyone in a better position when it comes to any potential disputes about damage.
As well as a contract, a detailed and accurate inventory is important. This is an area that too many landlords pay only lip service too, but they will only regret doing so at a later date. If your inventory is not accurate, it can lead to disagreements at check out, and this can drag on, leaving you unsure about the state of your investment.
"If landlords have a thorough and detailed inventory, it will enable both parties to be treated fairly and reasonably. By opening a dialogue with tenants and using an independent inventory clerk, disputes can be resolved quicker and without the hassle that is often experienced at the end of a tenancy period," Mr Zane added.
It might sound quite tedious to go through each item of the house and write it down, but at the end of the day, it will mean you are protected against claims from tenants, or from having to replace things that have been lost or damaged by the tenant during their tenure.
Finally, good communication can help reduce the chances of disputes rearing their head. If you occasionally call the tenant to check how things are going, without being intrusive of course, the chances are that they'll feel more relaxed about talking to you.
Most tenants don't want to admit that something has been damaged for fear of being charged for it, but if they feel more at ease with you because of your strong communication skills, then it's far more likely that they will report things early and you can work together to rectify issues before they become bigger.