As a buy-to-let landlord, there are a number of pitfalls that could trip you up if you do not thoroughly research and appreciate your responsibilities.
Ever-changing legislation means that if you are not sufficiently clued-up, you could be hit with severe fines or even a suspended prison term.
There are a number of simple mistakes that buy-to-let landlords can make when looking to let their investment property. Here are a few things to avoid!
Not carrying out background checks-Of course, as a buy-to-let landlord, it can be very tempting to want tenants to move in as soon as possible. However, it is imperative that before you move tenants into your property, you conduct a full and thorough background check on them. Should you be using a letting agent, then they will conduct these checks on your behalf. You should ask potential tenants for references from previous landlords and conduct credit checks. Additionally, you must remember to conduct Right To Rent checks where appropriate, to ascertain if your renter has the right to stay in the UK.
Failing to protect tenants’ deposits-As a buy-to-let landlord, you are legally obliged to protect deposits taken from a tenant within 30 days. You must protect these deposits in one of three Government approved schemes, either:
- Tenancy Depost Scheme (TDS)
- Deposit Protection Service
You must then give your tenants details of this prescribed information within the 30 day period. Failure to do so will see you in breach of the law.
Wrongly going without landlord insurance-One of the most important things to do as a buy-to-let investor is to take out sufficient landlord insurance. It is vital that your rental property is properly covered. Just Landlords’ landlord insurance includes 33 essential covers as standard, offering one of the widest protection available. What’s more, you should look at taking out rent guarantee insurance, to ensure that you are not left out of pocket, should your tenants default on their rental payments.
Neglecting legal obligations-You have many obligations as a landlord and you must remember that your investment is actually a home for your tenants. There are a number of health and safety regulations, such as gas, safety and electrical considerations to take into account. In addition, you are obliged your tenants with an Energy Performance Certificate when they move in. Add to this carbon monoxide, Right to Rent and inventories and there is a substantial workload.
Remember-failure to prepare means preparing to fail!