Being a business-owner is a concept that many landlords struggle to accept. It’s a fact though, if you rent out a private property, you’re running a business. I’m not trying to alarm or fill people’s heads with grandiose ideas. Far from it, I want to encourage landlords to adopt a different mindset and increase their chances of earning a decent income from their property investment – and now, is the time to embrace this mindset.
Keeping your property business on track
Instead of Covid-19 putting business on hold for us and our clients, it’s shone a light on how critical our approach has been in keeping our clients’ property businesses on track. Here are 3 examples for you:
1. Zero rent arrears
To date, not one single tenant of ours is behind with their rent. We’ve been proactive in communicating with tenants so they understand their obligations and where they stand since the lockdown started in March. The media and various spokespeople have succeeded in misleading and panicking people about the legal situation (and ethics) surrounding ‘rent holidays’ and the suspension of new evictions. So, we set the record straight very early on. We also gave some essential advice surrounding possible loss of income and eligibility for sick pay, redundancy and universal credit.
Essentially, we stress how important it is that tenants get in touch the minute they even think they might struggle to pay the rent. One family did just that and, as a result of our advice and diligence, 3 of the 4 adult tenants immediately got new jobs with Tesco and have succeeded in maintaining a reasonable income and – most importantly – not fallen behind with their rent!
I’m not claiming that we hold the answer to zero rent arrears, nor that tenants aren’t feeling the pinch. I am affirming that maintaining a good landlord tenant relationship with crystal clear communication and a sympathetic ear is vital. A business mindset, in other words.
2. Rent Guarantee
Many of our landlord clients have wisely chosen to benefit from our Rental Guarantee and Legal Expenses Cover, because it forms a major part of our ‘designing out risk’ approach. Underwritten by our business insurer, our Rental Guarantee reflects our reputation for due diligence. We offer a very high level of cover at a very competitive cost. At around 1% of a landlord’s annual rental income, it’s yet more evidence of our success in protecting our clients’ rental income. Think less ‘landlords in lockdown’, more ‘professional business-owners’.
3. Professional HD video virtual property tours
This is a really successful service that we have previously offered to overseas tenants who are planning to move to Milton Keynes. We’ve simply extended the service to replace real viewings during the current restrictions and successfully placed tenants in 11 rental properties.
Once again, this is where doing things properly really matters: professional, true-to-life HD video virtual property tours; careful and thorough negotiations.
Judging by the ‘thank you’ cards received, we’ve also succeeded in making both our landlords and tenants happy and relieved, and we’ve given them one less thing to worry about!
Thriving or surviving?
The above examples of diligence are not just for disaster scenarios – we’ve always had these in place. Now, as we emerge into a new COVID-19 influenced world, the need for a proper business approach to being a landlord is clearly absolutely vital.
These are our top 4 top tips:
- Use qualified people to help you run your business – from electrical wiring and gas installation to letting and management. DIY should be confined to putting up shelves (and even then…). Fair fees + professional service = long term security of income.
- Have respect for the law. This is one of the busiest areas of law – our recent legal briefing highlights 13 new pieces of legislation alone. Being law abiding is not an option (unless you want some hefty sentences including custodial). Keeping up with the law isn’t for amateurs, however
- Recognise the need for a good relationship with your tenants. It’s about managing expectations and having enough experience to anticipate every scenario.
- Talk to an expert in landlord-related tax. No, you can’t get relief on finance but you can claim expenses (assuming you’ve been keeping careful record of everything).
No more landlord in lockdown
Running your rental property business like a pro means doing things properly and using professionals to help you make the most of your business. You’re still in charge, but like all successful business people, you delegate. Rid yourself of hassle, reclaim your time and, even if you own just one property, reap tangible rewards.
It’s a mindset: thinking less like a landlord and more like a successful business person.