Sound Landlord Advice for 2020 and beyond.

Do you ever sit and
watch programmes like “Homes Under The Hammer” and think “I could do that!”
Then you’ve probably considered becoming a landlord at some stage.

The bit they don’t
emphasise enough to you on TV Shows is that being a landlord can be a tough
business if you just jump in there without doing your homework, and thinking
the property world is an easy guaranteed world to riches.
Sorry to have to burst your bubble, but unless you thoroughly know what you are
doing, or take sound advice from experienced developers or superb Letting
Agents (Such as BAILLIE & BAILLIE), then it can be a really tough and painful
business.
However, many would be property investors who follow good protocols and sound
guidelines, have gone on to develop themselves a nice little portfolio that gives
them great returns on their capital investments.
Property investment and management, despite what some people think, is not a
licence to print money, but managed well – it is one of the few investments
that can make you money while you are sleeping or even completely away from it
all.

Baillie & Baillie Estate Agents & Letting Agents have been Selling,
Letting, Refurbishing and Managing Properties across Scotland and beyond for almost two
decades – Below are our Top Tips and sound guidelines on what it really takes
to succeed as a landlord.

Baillie & Baillie Letting Agents has provided nicely presented and
well run properties for hundreds of tenants from all walks of life.
Scroll down to read our Q&A for some expert insight and hopefully you’ll
learn plenty of top tips along the way!

PI: Property Investors
B&B: Baillie & Baillie Letting Agents

PI: How important is budgeting as a landlord?

B&B: It’s very easy to get caught up and think little odds and ends
don’t matter too much, but they do!
Every single penny of expenses accrued in the running and servicing of your
project or property should be recorded and submitted.
Accurate financial records always need to be kept.
This will also make your life easier when they do make tax digital.
At Baillie & Baillie we have amazing Web Apps and Portals that place
everything a Landlord needs to know within their own hands 24/7.
Landlords (and Tenants) have instant access to all records, maintenance reports
and most importantly all invoicing and statements relating to their
property(s).

Too many property investors focus or worry about the big-ticket items
and don’t spend enough time thinking about the smaller spends. Money leaks out
of businesses in weird and wonderful ways and you need to do your best to
understand where it actually leaks from, to ensure that you are running the
most effective investment operation possible to you.
All this whilst ensuring that your tenants have a nice clean, safe environment
to live within.

PI: How do you approach rent increases?

B&B: Rent increases can be very controversial and require to be
managed with sound logic, good business sense, especially when they involve
long term good tenants. 

Rewarding tenants with no rent increases is one strategy, however another
approach is to look at biennial incremental rent increases whenever market trends
or economy influences permit).
Small rises are an opportunity for you to remind good tenants they are being
rewarded with a lower than market rate and allow you to build an ‘improvement
pot’ to ensure your property remains in good condition for their continued
enjoyment and comfort.

On the repairs and maintenance side of owning a property, it is also very
important financially to understand the value of your business as a landlord
where, unlike a homeowner, you will be a repeat customer for many trades and
suppliers.
This means you should seek out the best prices and service levels to provide
the most you can for your tenants.
Baillie & Baillie have some fantastic working relationships with
tradespersons who know what it is to produce a high standard of work and
service for a regular and reliable rate.

PI: How do you deal with things going wrong?

B&B: No matter how much you try and future-proof and bullet-proof a
property, there will ALWAYS be something of some sort that will always go
wrong. Nothing lasts forever!

Wear and Tear and Item Depreciation is a FACT OF LIFE!

As an investor you must understand (and accept into your financial plan) that things
will always decline, a roof will never fix itself and a problem will never go
away until you solve it.
Solving problems (read as Repairs & Renewals) always costs money and takes
time, these things need to be factored in to all your investment plans and
management. Things will always take longer and cost more than what you
initially expect, so it’s best practice to add another 10-20% to any estimate
in your mind when pricing
If it comes in at price, you’ll be pleased with the ‘saving’, if it slips over
then you won’t have any uncalculated financial surprises.

PI: Is there much paperwork involved?

B&B: Paperwork is a pain, but it’s also critical to ensuring you run
a safe and reputable business. Records need to be kept of al:

• 
  Landlord Registrations (Every 3 Years)

• 
  Property Lease Agreements (For the duration of tenancies)

• 
  Deposit Certificates (For and at every change of tenancy)

• 
  Gas Safety Certifications (Annually every year)

• 
  EICR Electrical Inspection Condition Report) (Every 5 Years)

• 
  PAT Portable Appliance Testing (Every Two Years)

• 
  Legionella Risk Assessments (Every 2 Years)

• 
  EPC Energy Performance Certificate (Every 10 Years)

All of which you need to diarise and ensure all are renewed when they become
due to make sure you remain compliant as a Landlord at all times.

Baillie & Baillie Letting Agents provide a Fully Managed Lettings
Service that takes care of all of the above, and everything else that could
possibly happen during the life of your rental investment.
Our Lettings Software and App gives you all of this and more in the palm of
your hand 24/7.
Our Full Managed Service literally means that you give us 3 sets of property
keys and your bank account details – sit back and leave the rest to us.

Having adequate insurance is also crucial, it’s best practice to also
include legal expenses. Insurance is only as good as the policy small print, so
it is best to ensure you have a comprehensive one that fits your needs, not
just the cheapest.

Be on top of when any guarantees, warranties and mortgage deals expire
and shop around at least one month beforehand. Being prepared is key to getting
the best deal.

PI: What are your best pieces of advice for aspiring landlords?

B&B: To make it as a landlord you need to be prepared for anything
and everything to happen at a moment’s notice. It’s important to educate
yourself and keep up-to-date with forever changing legislation. There are also
many resources available from property blogs to property forums and books. 

Building up a sinking fund is crucial to pain free Landlord matters, a good
rule of thumb is to set aside 10-15% of your first few years rental income to
build up a safety net fund for any unexpected rainy days.

Like any business, buy to let has seasonal variances. Winter is worse
for roof repairs, autumn for boiler problems and spring for windows and
fencing. Adjust your budget so you can be ready for the year ahead. If you’re
concerned by expensive boiler repairs, consider taking out a policy which
protects the boiler in the event of an emergency. However a well manged sinking
fund can eliminate the need for insurance cover on items such as boiler cover.

Unfortunately, you cannot stop problems occurring, but the best course
of action is to be prepared for if and when they do.
Baillie & Baillie’s Fully Managed Letting Service gives you cover and peace
of mind that anything will be attended to on your behalf.

It’s not easy to always expect the unexpected, but planning ahead,
keeping accurate records, having a good network of people and an emergency
budget will help you sail through many storms.

Feel free to call Baillie & Baillie Letting Agents on 01505 615384 at any time if
you wish to ask any questions.
We are always happy to help with free advice or
considered guidance on any property matters, concerns or worries you may have.

Our Fully Managed Property Letting Service costs are:

£250 (No Vat) Initial Property Marketing
10% of Monthly Rental Fee (No Vat) for ongoing Fully Managed Letting Service

Happy Property Investing !