Despite predictions of instability and diminishing returns, it’s a good time to invest in Buy To Let. Also, this has never been truer of the student BTL market than it is now. But if you’re just getting into this business, there are many pitfalls. Some of the most common mistakes of landlords are listed below, reported by those who learnt the hard way.
Underestimating Time and Cost of Repairs
Typically, student tenants will stay around 10 months – mid-September until early July, sometimes longer if they are postgraduates, shorter for those whose courses finish early. That means you have approximately two months to get all repairs and upgrades done. What may seem like a small job to do could take much longer. Even jobs you can do yourself may come up against unexpected problems. Make repairs a priority and there will be no nasty surprises or big bills.
Not Treating it as a Business
Some landlords treat renting in the BTL market as a hobby, a no-stress side business to make some quick cash. But that is the road to considerable expense and stress. It’s also the road to a bad reputation and lost money. You’ll need to consider many aspects of running a business such as marketing, your legal responsibilities, your revenue and costing, and your tax return. All of these are important and will be a steep learning curve. Also, your paying customers have the right to minimum standards.
Neglect
This can be neglecting the property or answering queries or requests for repairs. It can also mean neglecting the relationship with your student tenants. They have a right to expect that you adhere to the law. Even after you have met your student tenants and are satisfied they are good for your property, you should ensure that you maintain your interest in the property by carrying out at least one (maybe two) inspections during their stay. Student tenants expect you to trust them, but they also need you to be on-hand to sort problems.
No Paper Trail
You will need a paper trail for everything. From reports of problems from your tenants and requests for repairs to invoices from tradespeople, receipts for items to go in the property. If you don’t keep the right paper trail, you won’t be able to track your income and expenses and you won’t be able to keep on top of your new business. If you need to take punitive action against non-compliant tenants, for example discovering damage after the deposit has been repaired, you’ll need an email trail of communications.