Finding Good Tenants Is Problem for Landlords
Sourcing good tenants who look after their homes are the biggest challenge for buy-to-let landlords.
Data from property portal Zoopla shows finding reliable tenants worried 56% of landlords - a shade ahead of the 55% who struggle to find tenants who care for their rented homes.
Although these were their main property business challenges, landlords also have other concerns:
- Making sure rents are paid on time (47%)
- Keeping businesses in line with increasing regulation (39%)
- Worries about how future law changes may impact their finances (36%)
- Managing businesses to keep making rental profits (32%)
- How tax relief cuts affect offsetting mortgage interest (24%)
- How rental values are performing (20%)
- What impact the tenant fee ban from June 1 will have (20%)
- Stricter buy to let mortgage rules (17%)
- What will happen to property prices (17%)
The State of the Property Nation 2018 report also revealed only a few landlords would admit they understood recent law changes and how they would impact the buy-to-let market.
- 37% had no idea mortgage interest tax relief was changing
- 31% did not know houses in England shared by five or more tenants required a licence
- 31% were unaware letting energy inefficient homes could result in a fine
Other legal issues that landlords needed to know more about include minimum room size regulations (25%), the upcoming cap on deposits, the ban on tenant fees and giving a ‘how to rent ‘ guide to tenants (all 23%), tighter mortgage financing rules (22%), the ban on charging fees for card payments (15%) and the national rogue landlord database (13%).
“Most of the landlords who find the legislation changes a challenge are not planning to do anything in response However, some are planning to leave the market, while others plan to move to a letting agent to help them manage their properties,” said the report.
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Tenant References and Guarantors
Landlords should interview prospective tenants carefully to assist in choosing one who will be trustworthy and reliable. Taking up references from a prospective tenant’s current or previous landlord, employer and bank can help to inform the tenant selection process.