The Tenant is the Most Important Factor in a Successful Property Rent
A buy to let property can be a recession-beating investment. But choose the right tenant to avoid the dream turning into a nightmare.
It’s well known that in these days of low interest rates and financial uncertainty, property is one of the few investment types that still generates a good yield. There are more buy to let private landlords in the UK than ever, and even government intervention in the shape of new stamp duty rules has done little to put people off.
However, the idea of property investment always carries the caveat that it can be a little more complex than simply buying stocks and shares. For one thing, your money is tied up for the long term. For another, there are aspects of repairs and maintenance to consider. But according to Romford letting agents who deal with buy to let properties every day, the single biggest factor in success or failure is getting the right tenants.
A landlord / tenant relationship needs to be more like a partnership in order to work best. Here, we provide five things you need to look for in your perfect partner.
1) They can pay the rent
Fairly obvious, but many tenants try to go into a rental arrangement with unrealistic expectations, thinking they can afford more than they can. The recommendation is to insist the tenant’s documented income is at least three times the monthly rent.
2) They will pay on time
Some landlords rub their hands together in glee at late payers, as it means they can charge a late fee. But it’s not a good state of affairs, and late paying is the first step on the road to not paying. The stress of the rent money not appearing on rent day is something you really don’t need. Make sure your tenant has a solid history when it comes to paying on time every time.
3) They have a secure income
The tenant can pay this month, but can they pay next? More and more people are now part of the gig economy, working as consultants or freelancers. There’s nothing wrong with that, but it’s down to them to demonstrate to you that their financial future is secure.
4) They are clean and tidy
What’s the next worst thing to a non-paying tenant? One who leaves the property in a mess. A tenant who lives a clean, tidy and orderly life is far more likely to leave the property in good condition when he or she leaves.
5) They are easy to get along with
A tenant / landlord relationship requires a degree of interaction regarding paying bills, dealing with maintenance, keeping the place in good order and so on. Some people are very difficult to get along with and make every step stressful, while others are cooperative and understanding. The last thing you need is a high-maintenance tenant who is highly demanding, or a troublesome one who flouts the rules and upsets the neighbours. This is where you need to use a little “gut instinct” and trust it.