Rents are rising - good news for landlords or increased risk?
It has been an incredibly hectic period in the lettings market. Lack of supply and increased demand from tenants has resulted in record breaking rents and enquiries. For one property we had marketed recently in Stratford, we received a whopping 45 enquiries in the first 5 days. To put this in context, generally we would receive around 10-15 enquiries per property over 1-2 weeks.
Whilst landlords are happy with rents being high, there is something serious to consider. We’re all worried about the cost of living crisis. With increasing bills and higher rents, the strain will definitely be felt by tenants. This raises the question of risk.
Being a landlord is a business, and as with any business, it comes with risk. The main risks that landlords face are the following:
- Loss of income due to non-payment of rent
- Damage to property
- Compliance
As a landlord, you must take every step possible to ensure your property remains compliant. That means up to date certificates, record keeping, documents and notices being served correctly and on time, registering and releasing deposits in a timely manner - the list goes on.
When letting your property, it goes without saying that you need to ensure that the tenants who are interested in renting your property have good history and can financially afford the rent.
Being thorough is important, but it still does not give you any guarantees. A tenant may have positive history and a good job at the time of renting your property. But disaster can strike to the best tenants. They may lose their job, they may become ill. There are many scenarios that can occur which could put both you as the landlord and your tenant under a lot of pressure.
There are ways to minimise your risk, however. Alongside thorough reference checks, you should also consider Rent Protection Insurance. This covers you in the event a tenant defaults on rent. Some policies also include legal and eviction costs. For the insurance to be valid, you must ensure that you can demonstrate that you undertook thorough checks on every tenant. You can also take out insurance for your contents in the property in case they get damaged, intentionally or unintentionally.
The letting industry faces constant changes in terms of regulation, which can make m being a landlord difficult. If you are in doubt about any aspect of the letting process, you should seek professional advice and do plenty of your own research. There are a number of landlord forums where you can gain advice and help on any issues you are experiencing. You can also contact Lyss Homes - we’re always happy to help and offer free advice.
While tempting to self manage to save on costs, it is becoming increasingly essential to have a competent property manager looking after your property. Your asset is worth a lot of money and you need to make sure you are protected.
If you have a property in London and you’re looking to hand over the management of it, give us a call. At Lyss Homes, we invest in the latest tech and software to ensure all our landlords are compliant and that their property is managed effectively - these systems are not available to landlords and is designed specifically to ensure every step of the letting process is covered. We also go a step further and even include Rent Protection Insurance in our management service for added peace of mind, as we genuinely want to provide a stress free experience for our clients.
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