How savvy investors find success in UK property from thousands of miles away
Among the most common fears of overseas investors in UK property is that they either won’t be able to rent their property or that they will rent to tenants from hell; the kind of tenants that cause untold damage to a property and refuse to pay the rent. Fortunately, these fears are largely unfounded. Problematic tenants are few and far between. That’s not to say they don’t exist, but if you take the right precautions and use the right strategies you should avoid bad tenants and costly void periods.
In this article, you’ll learn how savvy overseas investors maximise their rental income by obtaining the best tenants.
Stay on side with the law, and the law will stay on your side
Successful buy-to-let investors know the rules of the game. They know how to use the law to their advantage. Poor investors blame the law for their shortcomings.
If you know the rules of the game, you’ll know how to negotiate the minefield of landlord law. You should certainly make sure you know the rules about:
- Discrimination against tenants
- Eligibility to rent
- Tenant deposits
Now, the problem with keeping on top of the law is that it is constantly changing. I don’t know about you, but I certainly don’t have the time to review every daily and weekly law change that affects property investors and buy-to-let landlords. Instead, I make sure that I have a team on board to do this for me: lead by my investment property manager. And they do way more than simply keep an eye on the law for me.
Get the right tenants and you’ll make the best profits
One of the first conversations you should have with your investment property manager is about the type of tenants you want for your property. Let them know your wish list. For example:
- Young professionals
- With good references from previous landlords
An experienced investment property manager will have the vetting procedures in place to ensure you rent to the best tenants possible. They will check with the rental applicant’s employers, run credit checks, and pick through the application forms with a fine-tooth comb. They will also ensure that they do so in line with current legislation.
The best tenants value their reputation. They will treat your property as if it were their own, reporting maintenance issues quickly and paying rent on time every month.
Treat your tenant’s deposit correctly
When agreeing to rent your property, your new tenant will pay a deposit. There are strict laws on how this must be handled. It must be deposited in a safe account, called a Tenant Deposit Scheme. This keeps the money separate from other money, and it is held for the benefit of the tenant.
The tenancy agreement should detail how this money is kept, and the conditions under which it will be returned. For example, the tenancy agreement should stipulate the responsibilities of the tenant. It should also detail what constitutes property damage, and what may need to be paid for out of the deposit (e.g. professional cleaning).
Your property manager should take care of all these details, ensuring that the tenancy agreement is written to the letter of the law and then maintained to consider any changes in the law.
Even though it is unlikely that you will need to evict a tenant, it is better to be prepared. Ask your investment property manager what experience and processes they have in place to evict if needed. They should provide details about Section 8 and Section 21 procedures, and show that they have the people and processes in place to carry out evictions.
Always charge the right rent
The final piece of the puzzle when finding the best tenants, and eliminating costly void periods, is to make sure you charge the right rent. Our recent article, “When you invest in property, you need to know the realistic market rent”, explains how to establish the right rent.
When you are interviewing prospective investment property managers, make sure you ask how they assess rental value. You should probably ignore the sales agent’s rental assessment, and the valuer’s rental price is often wide of the mark, too. What you must do is calculate the realistic market rent. It requires work, time, and patience. But it’s worth the effort. Get the rental price right, and you should benefit from strong competition for your property. It will reduce or even eliminate void periods. It will help to maximise your income and cash flow.
Get the right tenants paying the right rent, and you’ll realise the full potential of investing in UK property. To discover how we’ve helped hundreds of overseas investors make profitable property investments in the UK, get in touch with Gladfish on +44 207 923 6100. We want you to be successful in property investment, and enjoy the cash flow and profits that we’ve helped so many others achieve.
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