10 Tips to being a successful landlord
1) Pick the right property
Do your research very carefully before purchasing a rental property. You
want a property that will attract a large pool of suitable tenants. Conduct
your research to see what areas have a strong rental market and also what
type of property is most in demand for rental in that particular area,
for example, houses or apartments. Is the property close to amenities
such as shops and transport links? What sort of rental income can you
expect - be realistic!
2) Manage your finances
When looking at property investment, work out the finances very carefully.
Include all your costs in financial projections including, legal fees,
stamp duty and fit-out costs. Don't forget to allow for the cost of on-going
maintenance. Be realistic about potential rental income. Always factor
in a void period in your projections. Most rental properties will be empty
at some point.Build up a contingency fund to cover your costs when the
property is empty or to pay for unexpected repairs and maintenance (for
example, a new heating boiler).
3) Have the right mortgage
The Irish mortgage market has become a lot more competitive in recent
years. Always keep a close eye on the mortgage market and the rates on
offer. Landlords should review their mortgages at least once a year to
ensure they are getting the best available rates. If the property has
increased in value it may be possible to get a better rate based on the
new, lower loan to value ratio. It has become a lot easier and quicker
to switch mortgage providers and switching could deliver a significant
4) Minimise you tax liability
Investing in property is a business and like any business income, rent
is liable to tax. However by managing your finances carefully and knowing
what expenses are allowable against tax you can significantly reduce your
5) Have the correct insurance
The insurance risks associated with letting residential property can be
substantial and are different to that of owner-occupiers. Do not under
estimate the importance of having the right insurance for your investment
property. Some landlords make the mistake of relying on normal household
cover - this is not adequate. An investment property requires specific
investment property (buy-to-let) insurance.
6) Screen tenants properly
Screening tenants is the most important part of managing rental property.
While no landlord wants to have vacant property - it is better (and cheaper!)
to have an empty property than one with bad tenants who may end up costing
you thousands in lost rent and damages by the time you eventually manage
to get them out. Landlords are always anxious when they have an empty
property, but don't rush into taking the first tenant that comes along.
Take the time to screen potential tenants.
7) Use a good lease agreement
A good lease agreement is essential to the effective management of investment
property and it helps to avoid disputes and disagreements during the course
of the tenancy. Never let a tenant into a property without a signed lease
agreement. The lease agreement forms the basis for the landlord / tenant
relationship for your property.
A lease agreement should cover:
- The length of the tenancy
- The rent and how it is paid
- The deposit payable
- Notice periods
- What bills the tenant is responsible for
- Who is responsible for grass cutting / garden maintenance
- The number of occupants allowed
- Are pets allowed?
- Any restrictions on the use of the property
- Special conditions e.g. the deposit cannot be used as the last months
It is important to ensure that any lease agreement used complies with
Residential Tenancies Act 2004.
8) Have an inventory of contents
An inventory is the itemisation of the contents of the property and their
condition.Every landlord should have an inventory for each property as
it outlines not only what is in the property, but also what condition
the contents are in at the time of letting and this can help to prevent
disputes when tenants move out.
9) Know the rules and regulations
The residential letting market in Ireland is governed by the Residential
Tenancies Act 2004, which also established the PRTB to resolve disputes
between landlords and tenants and to operate a system of tenancy registration.
Landlords and tenants may refer disputes to the PRTB for resolution. The
Residential Tenancies Act 2004 sets out basic tenancy obligations for
both landlords and tenants. It is not possible to contract out of these
obligations (i.e. the act overrides the terms of any tenancy agreement).It
is important that every landlord understand the main provisions of the
Residential Tenancies Act 2004 and the impact this has on areas such as
registering tenancies and serving notice on tenants.
More information is available from The
Private Residential Tenancies Board.
10) Treat it like a business
Think of property investment as a business. Keep proper records of all
financial transactions including rents received and expenses incurred.
Be professional and business like in your dealings with tenants and any
Your Letting Specialist