Are you an investor or a landlord? What's the difference?
There's two main approaches when it comes to renting out property, which one works for you?
Landlords come in all different shapes and sizes.
Some are experienced and hands-on.
They want to be involved. They want to know how the tenant is doing. They want to be present at the check-in and attend the inspections.
But some landlords are quite the opposite.
They leave everything to the agents. That is what they are paying for.
What type of landlord are you?
Are you a control freak? Do you always want to be involved?
Or are you more laid back?
Some people would classify your laid back landlord as a true 'investor'.
They have acquired the property, invested their cash, and then passively received the monthly income. This landlord is not dealing with maintenance and repairs on a Sunday lunchtime - that is what the letting agent is for.
They go on holiday and do not even think about their property - that is what the letting agent is for.
They do receive slightly less in monthly revenue, but the income is almost entirely passive. This frees up time to allow them to do other things.
If they are serious investors, this 'free' time is used to view and purchase more properties.
Or perhaps they are happy with their portfolio and simply have a few extra pounds coming to them each month.
There is no right or wrong way.
It comes down to what works for you and your lifestyle.
Perhaps you have recently retired and thought that managing a few tenancies would be simple enough because you have plenty of time on your hands?
But, do you know the legislation & compliance aspects of letting a property?
Do you know how to handle repair requests? How quickly? What is considered an emergency?
Do you know what to do if the rent is late?
There are hundreds of laws that need to be adhered to when letting a property. An emergency repair must be addressed within a specific time frame. There is a process that must be followed if a tenant struggles to pay their rent.
Many hands-on landlords have not achieved qualifications in letting property. And they often do not know all of the legislation (178 laws affect tenanted properties at the last count!).
And perhaps most worrying of all, they are often very friendly with their tenants.
They have to be, right? They have received calls frequently and visited the property for inspections. They probably send cards and maybe small gifts at Christmas.
So why is that a problem?
Because there is no professionalism between the landlord and the tenant. The lines are blurred. This means that when things become difficult, it can be a personal issue as much as legal.
If you have been friendly with the tenant for years and they start paying late every month, at some point, you are going to have to change your tactic and become the 'big bad landlord'. You will have to stop being 'nice' and step into professional landlord territory.
If your tenant thought that they might be able to bend you a little. Buy a bit of extra time for paying, maybe. They will likely be shocked when you suddenly lose patience and change into 'landlord mode'.
This is when the relationship can break down.
Things become testy.
Perhaps it builds into an argument.
And before you know it, they have left and are on bad terms.
Now, clearly, this is a dramatic replaying of a scenario. It doesn't always go this way.
Sometimes tenants and landlords are lovely to each other. Then someone needs to move on one day, and they give notice and move without a drama. They may even stay in touch for a few years afterwards. They may even become friends.
But, if there was a reason to 'landlord' the tenancy, it could quickly turn sour.
Letting property out is a business transaction. It is full of legislation and, if you know of anyone who has ever had a bad experience with a tenant, it can be very stressful to work through issues and heartbreaking to have to attend court to get your property back.
So, treat this as a business transaction. And use professionals to ensure that things are done correctly. This protects you legally and financially, but most of all, emotionally.
You can carry on with your days, receiving your rental income each month, without any stress! That is what your letting agent is for!
