If you rent out a property, it’s crucial to ensure your investment is protected. There are a lot of risks which come from letting out a property. As a landlord, it’s important to make sure you’re aware of the risks and the things that could go wrong.
Here, we’ll look at just 5 types of property risks that can affect a landlord’s investment. This will enable you to better prepare and avoid potential issues.
1. Legal Issues
As a landlord, there are a lot of legal considerations to take into account. First and foremost, it is your responsibility to ensure that the property is safe for tenants to live in. This includes ensuring there are no health hazards, making sure the gas and electrical supplies are safe and having an energy performance certificate on hand.
If you fail to meet the legal requirements, the penalties can be huge. Don’t forget you’ll also need a good insurance policy like the one provided by Homelet.
2. Rent Delays
Another risk you’ll face is rent delays. There may be times when your tenants can’t make the rent day on time, leaving you to cover the costs of the mortgage out of your own pocket. While these types of delays are usually one-offs, some tenants can become frequently late with their rent.
Therefore, it’s important to take into account these potential delays by saving money to cover the costs if needed.
3. Finding Tenants
You’re going to need to spend some time finding tenants for your property. There is also the risk tenants may come and go frequently. Ideally, you’ll want to look for long-term renters although this isn’t always easy.
In order to find tenants, it doesn’t just take time, it also takes a good level of marketing and fees. So, have a plan in place for finding tenants when you need them.
4. Maintenance Costs
Something you don’t always consider when renting out a property is maintenance costs. You’re going to need to have funds available to pay for any repairs that may need to be made. Of course, you’ll want to ensure you have a good level of insurance to cover things such as boiler repairs too. This will lower the amount you need to pay if something does go wrong.
5. Bad Tenants
It isn’t just rent delays you need to worry about, it’s the tenants themselves. Occasionally landlords can find themselves dealing with nightmare tenants. They don’t look after the property; they have issues with neighbours, and they may purposely avoid paying the rent. These types of tenants can be a hassle to deal with, but you can carry out checks prior to renting out the property to determine how trustworthy they are.
As you can see, there are a few things you need to prepare for when renting out a property. The above are just 5 of the biggest risks you’ll face.