High profile agency Haart has issued a warning to landlords on what it sees as the three key risks to successful letting - and they form a compelling case for why all buy to let investors should use agents.
Firstly there is the problem of the unreliable tenant.
Haart advises that to reduce the risk of having unreliable tenants, landlords should use a professional tenant referencing service. But because even the most comprehensive reference can’t remove the risk of a tenant defaulting altogether, it suggests landlords take out a rental guarantee. Most provide cover for any unpaid rent, together with covering the costs of evicting the tenant.
Secondly there is the problem of damage to a property.
Haart advises quick action to rectify problems, and to advise tenants on how to report any other issue straight away - and it warns that if a tenant leaves a property with major damage, then there is a risk the security deposit may not always cover the costs.
As a result - especially if a property is not professionally managed - there is good sense in taking out appropriate insurance.
“Landlords should also bear in mind that if they don’t repair something which becomes damaged, such as loose stair carpets or tiles, and this results in an injury to a tenant, then they can make a claim against you. However, a specialist landlord insurance policy which includes Landlord or Public Liability cover could protect you in these circumstances” cautions Paul Sloan, operations director for Haart.
Thirdly, there is the risk of voids - a key area where agents are likely to have prospective tenants to reduce the impact of gaps between tenancies.
Sloane adds: “There is a spectrum of landlords. At one end are ‘business landlords’ with scores of homes in property portfolios; at the other end there are an increasing number of ‘accidental landlords’, who have decided to rent out a single family home they inherited. Wherever you fall on the spectrum – professional, accidental or somewhere in between – it’s crucial that you are aware of, and have sufficient protection for, these three risks.”