Nine steps to becoming a good and successful landlord - Total Landlord Insurance

February 7, 2023
Nine steps to becoming a good and successful landlord - Total Landlord Insurance

Being a good landlord can be challenging. In addition to satisfying the many legal requirements that govern private letting, to be successful you have to be business-minded in the operation of your rental, professional and personable with your tenants, and willing and able to keep learning and adapting to changes in the industry.

There’s a lot to know and stay on top of if you want to make sure your letting business is a success, and the legal and financial consequences of getting things wrong can be severe - read our separate article on landlord fines

But becoming a ‘good’ landlord isn’t just about operating legally - it’s about doing things right, for the right reasons. It’s about taking extra care to look after your tenants and running a really good lettings business – one that makes money for you, but also has some of the profits reinvested to keep the property in the best possible condition and well above minimum required standards.

To help keep you at your best, follow our nine steps to becoming a good and successful landlord:

1. Buy the right property that meets your financial goals

While it may sound obvious, you always have to keep at the front of your mind that buy to let is a business. So, the very first step on the path to being a good landlord is putting together a business plan – see our separate article, ‘How to make a landlord business plan (and become a better landlord)’ which includes a downloadable business planning template for landlords.

Get yourself a team of professionals that can advise you on the risks and potential rewards, and help you invest in a way that will enable you to achieve your goals. Depending on your expertise, a team could include: a financial adviser or wealth manager, an excellent mortgage broker, a property tax specialist, a legal estate planner, an experienced local estate and letting agent, and a surveyor.  

Taking the best advice, understanding the buy to let market now and in the future and having clear financial goals should then enable you to buy the right property, at the right price, that delivers the returns you want or need. Read our ‘Ultimate guide to buy to let property investment’ for more relevant information.

2. Understand what it takes to be a successful landlord

Although letting property can be a very rewarding and successful business venture, it’s not easy and requires you to wear a lot of different hats. 

In order to let and manage the property successfully over time, you have to be able to:

  • Understand the skillset and knowledge required to be a good landlord – looking after the financials, your property and your tenants
  • Recognise your own strengths and weaknesses 
  • Put a value on your own time
  • Outsource to expert professionals where it’s efficient and cost-effective to do so

Being a landlord can also be lonely sometimes, and if you’re dealing with complicated legislative issues or trying to evict difficult tenants, life can become stressful and it’s easy to feel overwhelmed.

The good news is that there’s plenty of help and support out there for individual landlords. If you need professional advice or just someone to listen to what you’re going through, organisations like LandlordZONE and the NRLA provide support, tips, training and webinars for landlords. And local landlord groups can not only offer support, but also provide great networking opportunities if you’re looking to expand your property business.

It’s also worth remembering that if you find being a self-managing landlord too challenging or you simply don’t have enough time to do everything properly, you can always outsource most of the work to an agent - read our ‘Ultimate guide to choosing a letting agent’ for advice on this. When choosing a letting agent, it’s vital you carry out due diligence to make sure they’re compliant with the law. Make sure they’re a member of one of the two approved property redress schemes - The Property Ombudsman or Total Landlord’s partner, The Property Redress Scheme - and a client money protection scheme such as Client Money Protect. This way you and your tenants will be protected if things go wrong with the let or the agent misappropriates your or your tenant’s money. 

3. Keep track of cashflow and plan ahead

Property is an investment that requires ongoing capital input to keep it in the best possible condition and make sure it’s always attractive to tenants who are prepared to pay a good market rent to live there.

A good landlord understands that and also appreciates that things can go wrong, so will set money aside for emergencies to make sure repairs can be made. They’ll also ‘stress test’ their finances periodically, to make sure the investment can withstand things like service cost increases and mortgage interest rate rises and still turn a profit.

Importantly, they will increase the tenant’s rent by a fair amount each year, to protect their profits against inflation. That also makes sure the tenant doesn’t suddenly get hit by a large increase after several years they hadn’t planned for. 

In order to be able to properly budget for and track your investment, you need to put together detailed financial information on:

  • Income and expenditure, so you can track gross profits
  • KPIs – including gross and net yield, and return on capital invested – so you can compare your property to local and national averages and other types of investment
  • Budgets for maintenance, upgrades and repairs over the next five,10 and even 15 years
  • Your liability for things like income tax and capital gains tax 

For more information and advice, see our ultimate guide to buy to let property investment, and take a look at our podcast on investing in buy to let in 2023, with Richard Donnell, Executive Director at Zoopla. You can also read our guide, ‘Advice on UK landlord tax’ which we update every year. 

Have a clear plan for dealing with late rent payments

Rental income is the lifeblood of your property investment, and yet dealing with late rental payments is probably the most common problem faced by landlords and the main reason for most Section 8 evictions. So what can you do about it? 

Your policy on rent arrears should be set out in your tenancy agreement. The Tenant Fees Act does not allow a default ‘late rent penalty fee’ clause, however, after a tenant is 14 days late with their rent landlords are allowed to charge interest on the late payment at three per cent  over the Bank of England base rate. Ordinarily, if your tenant then goes into two months of rent arrears you can serve them a Section 8 notice.

Good landlords do all they can to avoid tenants falling behind with their rent, so make it a habit to check your bank account every month on the day rent is due and take action right away if payment hasn’t been made. Communication is key, so find out why they haven’t been able to pay. If it’s a temporary financial hitch, you may be able to agree a payment plan for them to make up what they owe over a few months, but if it’s likely to be a longer-term issue, then they may have to leave the property.

If you have a good relationship with them, you may be able to come to a reasonable agreement to end the tenancy. But if there are problems, try mediation as a first port of call, such as the service offered by the Property Redress Scheme.

For more information and advice, see our article, ‘What to do if your tenant can’t pay the rent and falls into arrears’.

4. Understand the law and keep ahead of legal changes 

There are more than 400 separate rules and regulations to comply with in the UK, and legislation is constantly changing, making it a tricky terrain for landlords to navigate. 

From MEES requirements, to right to rent checks, to fire safety in properties, things can and do change all the time, and you have to be able to stay up to date so you can make sure your property is always legally let. If you fall foul of the law – even unintentionally – it can be costly, both financially and personally. 

Take a look at our guide, ‘Legislation for landlords: Everything you need to know’, and to make sure you stay informed about any upcoming changes, we’d recommend you subscribe to our news partner website LandlordZONE, to get all the latest landlord news, as well as tips from industry experts.

The best landlords will aim to deliver the best standard of property they can for the level of rental income it’s generating. And when legal changes are first proposed, they will usually take action before new legislation comes into force.

For instance, although there is not yet any firm date for the minimum EPC rating to be raised to C, good landlords are already carrying out works where necessary to improve their property’s energy rating. Not only does that mean they will already be compliant when the rules change, it also reduces energy bills for current tenants. Read our ‘Ultimate guide to having an eco property’ for advice on steps you can take. 

Make sure you meet local authority requirements

In addition to national legislation, every local authority in England has the power to introduce its own rules for rented properties, including around licensing, planning and property safety. 

It’s therefore essential to speak to your local council before you invest, to find out what their policies are and make sure your investment plans are viable. It’s also advisable to join a local landlord association so you can stay on top of any upcoming changes specific to your area. 

5. Choose the right tenants for the property

Dream tenants are ones who pay their rent on time, look after the property, behave in a neighbourly way - and ideally stay for many years. So how do good landlords secure these kinds of tenants? 

Just like with any other business, you need to begin by clarifying your target market. If you want to attract a family, for example, furnish and decorate your property with children and family life in mind. You also need to have a professional listing and place it where your target audience is going to see it. For much more detailed information and advice, see our ultimate guides to rental property marketing and preparing your property to let.

Once you’ve got interest from prospective tenants, make sure you’re available for viewings at times to suit them and are ready to answer any questions about the property and terms of the tenancy. 

Remember that as well as selling the property, you’re also selling yourself as a landlord, and at the same time assessing the kind of tenants these people would make, so take the opportunity to ask them questions as well. Communication is key in any successful tenancy, so take note of whether they’re open and easy to talk to.

When demand is exceeding supply, as it is in most areas of the UK at the moment, you’ll tend to get multiple applicants for one property, and it can end up in something of a bidding war. However, it’s important to bear in mind that it’s not just about who can pay the most rent; it’s about who is going to be the best fit for the accommodation you’re offering and also who might be likely to stay long term.  

Reference check your tenants

One of the most important steps in securing responsible tenants is reference checking. No matter how trustworthy someone might seem, it’s crucial that you carry out background checks – which may also be required by your landlord insurance provider and/or mortgage lender.

We recommend a four-point check:

  1. Identification from the tenant, including a clear photograph (passport or driving licence)
  2. Either a utility bill or a bank statement for proof of residency
  3. A credit check to make sure they are clear of CCJs and bankruptcy, and indicating confirmation of residency
  4. Confirmation of employment – a written employer’s reference on company letter headed paper confirming the tenant’s permanent and current employment and that their salary is at least a multiple of 2.5 of the rent amount

TenantVERIFY is a useful resource for carrying out tenant checks and referencing, and you can find out more about the process in our ultimate guide to tenant referencing for landlords.

6. Start the tenancy off in the right way

‍ A good landlord appreciates that the day their tenants move in may be the first time they’ve lived independently, or they might be completely new to the area, so it’s important to make them feel welcome and help them settle into their new home. 

A simple and effective way to do this is to provide them with a comprehensive welcome pack, which should include the prescribed information and:

  • A copy of the tenancy agreement
  • A copy of the full check-in inventory 
  • Instruction manuals for appliances 
  • Advice on how to look after the house and garden
  • Useful facts and tips about the local area, including things like bus timetables, taxi numbers and take-away menus

You might also want to leave them a gift just to make their first day extra special!

‍Good communication can really help a tenancy go smoothly, so set parameters from the outset. Let them know how and when they can contact you and how quickly you’ll be able to respond – encouraging them particularly to let you know as soon as they spot anything that needs repairing. Remind them how often you'll be carrying out property inspections and make sure they’re happy to give you access for these.  

It’s also important to make sure your tenants’ deposit is properly protected (as required by law) in a government-approved deposit scheme, such as Total Landlord’s partner, mydeposits.

“A robust and detailed check-in inventory is a ‘must’ to protect the interests of both the tenant and landlord at the start of the tenancy. The comparison between quality check-in and check-out reports will help make sure there is no confusion at the end of the tenancy over whether the extent of any deterioration is the tenant’s responsibility. A tenant can feel secure that only reasonable claims can be made where the property has not been returned in the same condition and standard of cleaning that it was in at the start.”

Suzy Hershman, Resolution Department Lead, mydeposits

Getting the tenancy agreement right

Although it is not currently a legal requirement in England to have a written tenancy agreement, every landlord should nonetheless use one. Setting out the legal terms of the tenancy in writing protects you and your tenant if there are any disputes and is likely to be required by your landlord insurance provider and/or your mortgage lender. And having a professional tenancy agreement will help give tenants a positive impression of you as a landlord.

Writing a full tenancy agreement from scratch can be time-consuming and complicated, so if you haven’t already got a template, the Government’s model tenancy agreement is the one to use.

Your agreement should include:

  • Your and your tenant’s personal contact information
  • The monthly rent, date it should be paid and account details
  • The deposit amount and how it will be protected
  • Which bills will be covered by the landlord and which will be paid by the tenant
  • Whether the tenancy can be ended early and how this can be done
  • How often you will conduct inspections and the notice you’ll give

For a more detailed list of everything you should include in your tenancy agreement, see this article from our deposit protection partners, mydeposits

“Making sure that you have a legally sound rental contract with your tenant is the foundation of any successful tenancy. It should set out clear terms that cover every aspect of your and your tenant’s rights and responsibilities – including those that are specific to each tenancy, such as a ‘pet clause’ or the tenant being responsible for mowing the lawn

However, if you are either drawing up your own agreement or making changes to a ‘standard’ AST, you should always consult a legal professional to make sure that every part of the agreement is legally enforceable and doesn’t violate your tenant’s rights. Making this relatively small investment at the start should go a long way to helping avoid disputes, both during and at the end of the tenancy.”  

Paul Shamplina, HFIS Chief Commercial Officer & Founder of Landlord Action

If you would like one of our recommended solicitors to tailor a rental agreement for you, you can find out more about the two packages we offer through Landlord Action, here

7. Look after the property well and have a long-term maintenance schedule

Looking after your rental property and maintaining it in a good condition is not only your legal responsibility, it’s also in your own best interests. A well-maintained property should hold its value well and your tenants will be delighted that you’re taking such good care of their home and interested in their comfort and wellbeing.    

Your legal maintenance and repair responsibilities should be clearly stated within the tenancy agreement. In most cases, landlords are responsible for the structure (walls, bannisters, stairs, doors, windows) and the exterior of a property. However, there is also a sizeable list of interior repairs which are the legal responsibility of the landlord – you can find a full list in our guide to landlords' and tenants' property repair responsibilities.

So, as part of your business plan, you should have a long-term maintenance schedule, with a budget for things like refreshing the décor, fixing small issues and making upgrades as required. Over time this can run into tens of thousands of pounds of additional investment. Aim to keep on top of maintenance on an ongoing basis, going over and above the minimum legal requirements, delivering the best property you can afford to, based on the rent the tenant is paying.

Respond to issues quickly

Going back to treating buy to let as a business, it’s paramount that you treat your tenants as customers. They are paying you to provide a serviced product for them, so it’s crucial (and a legal requirement) that you uphold your end of the deal. If they have a query or issue, responding quickly and effectively is the equivalent of great customer service and they should appreciate you being attentive.

Carry out regular property inspections

Good landlords and agents carry out regular property inspections to check for any maintenance issues that the tenants might not have reported and make sure the property is being looked after. We recommend inspecting the property within a month of your tenants moving in, and then around every six months after that.

Remember that you need to give your tenants at least 24 hours’ written notice of any visit and obtain their permission to enter the property. A good landlord or agent knows it’s the tenant’s home and you can’t simply turn up unannounced – even if you’ve given them notice. Most tenants will be absolutely fine with granting you access, but if you haven’t had a response with confirmation that it’s okay to carry on with the inspection, then you will simply have to reschedule. If your tenants won’t let you access the property to carry out a gas inspection, our article explains the steps you need to take. 

As well as giving you the opportunity to pick up on any necessary repairs, an inspection will quickly tell you if someone is illegally subletting your property, smoking when they’re not supposed to or housing pets that weren’t agreed – or something worse.

Keep the property secure 

Keeping a rental property secure during a tenancy is the joint responsibility of the landlord and tenant. However, while tenants need to make sure they do things like locking doors and windows when they leave the property, it is down to you to make sure there are sufficient security measures on and around the property to keep your tenants and your investment safe. 

At Total Landlord, we find that insurance claims resulting from break-ins spike in the summer and winter months, but it’s important to do all you can to deter intruders all year round. In addition to making sure all windows and doors have suitable locks, good landlords will take measures like:

  • Installing outdoor motion sensor lights
  • Cutting back shrubs around entry points so there’s no cover for a potential intruder
  • Keeping perimeter fences and walls in good repair
  • Having a gravel driveway and paths so anyone approaching the property will be heard

With fewer daylight hours and homes filled with Christmas presents, winter is the worst time of year for burglaries. Apart from the loss of valuables, there’s also the cost of property damage to consider, so it’s good practice to remind your tenants to take extra care during the winter months.

8. Have appropriate landlord insurance cover

If you have a buy to let mortgage, your lender is likely to require you to take out landlord insurance before you bring in tenants, but otherwise it’s not a legal requirement.

However, not having insurance as a landlord is a recipe for disaster. What if your tenants or someone else vandalises your property? What if there’s a flood or fire and your tenants can no longer stay there? What if your tenant injures themselves on your property and pursues you for compensation? 

Landlord insurance can protect you financially in all these eventualities – and more.

It’s important to be aware that because tenanted properties are considered at higher risk of damage than owner-occupied properties, landlords require specialist insurance. If you only have standard homeowner insurance on a property that you rent out, any claim you make is highly likely to be invalid. 

As a good landlord, it’s best practice to remind your tenants that your landlord's contents insurance only covers your own property and possessions, not theirs – even if their things are damaged in the property through no fault of their own – so they will need to take out their own contents cover.

You can read more about how to work out which is the best landlord insurance for your needs in our separate guide. And if you’d like to discuss appropriate cover, just get in touch with the team at Total Landlord for a free, no obligation quote.

“Landlord insurance can offer excellent protection for landlords and their properties. But to make sure you don’t invalidate any claim you might need to make on your policy, it’s important to carry out a robust reference check on your tenants, attend to repairs promptly, and carry out regular inspections and maintenance to ensure your tenants’ safety and your own peace of mind.”

Steve Barnes, Head of Broking at Total Landlord Insurance

9. Go the extra mile

Good landlords go over and above to give their tenants the best possible renting experience. It’s a two-way street - you want good tenants, and they want a good landlord – and if you keep your tenants happy so they feel comfortable and safe in their home, they’ll be more likely to look after your property well and stay longer.

So, apart from making sure the property is clean and welcoming when they first arrive, if they make any requests – such as asking to redecorate the bedroom or put up some shelves - try to be flexible and accommodating where possible, especially if they’re likely to be long-term tenants. And when things go wrong – as they will every now and then – have things repaired or replaced as quickly as possible and don’t scrimp on doing the jobs properly so the tenants continue to feel safe and looked after.

Make an effort to be available when they need to speak to you, and always communicate in a professional way. When it comes to annual rent increases, try to give them something in return – maybe redecorate or offer them a new appliance. If you’re making any changes during the tenancy, give the tenant plenty of notice, and if the end of their tenancy is approaching, think about how you might to be able to tempt them to renew.

Finally, remember your tenants on special occasions – a bottle of wine or box of chocolates on their birthday and a Christmas gift will help let them know that you appreciate them taking care of your property and they’re more than just a revenue stream.

Being a good (and successful) landlord isn’t just about following the rules and doing what you have to do. It’s about improving and growing your business – and it can actually be fun. A good landlord is a business asset; one which will help keep your tenants happy, reduce your legal costs, and, ultimately, increase your investment returns.

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