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What to know when renting out your property

There are various ways that landlords can ensure that they are protected from the risk of delinquent tenants and choose the best possible tenant to occupy their property.

According to Adrian Goslett of RE/MAX, the first thing that a landlord should do before they advertise their property is to determine the conditions of the rental agreement.

"It is important that the landlord is specific about what they want when it comes to the conditions, such as no pets or that a tenant that is non-smoker. Another essential aspect is to stipulate in the advertisement that all potential tenants will be thoroughly screened. This will have a significant impact on the number of potential tenants who decide to view the property, narrowing the selection down to only those who meet the landlord's criteria," he says.

"To further narrow the selection, landlords should also provide potential tenants with a detailed application form to be completed. The document should request personal information such as employment details and contactable references. Tenants can also be asked to provide supporting documents which would include a copy of their ID and a salary slip to verify employment and affordability."

Goslett notes that once the landlord has received the application forms with the required supporting documentation, they can then proceed with a credit check and criminal record check. Part of this stage of the vetting process would include contacting the references given by the tenant.

Once all the checks have been completed and a tenant has been selected, Goslett says that it is important that the landlord draws up a comprehensive and legally sound lease agreement with all conditions specified. "The terms must be agreed upon and signed by both parties. The more detailed the document, the better. This will avoid any confusion or uncertainty regarding each party's obligations in honouring the agreement. The agreement should include a pre-occupation inspection report to be concluded with the tenant present, along with details regarding aspects such as the deposit, rental amount, maintenance and upkeep. Time frames should be allocated to the required clauses as well as penalties, should any condition be breached," says Goslett.

He notes that it is important to remember that although a lease agreement has been agreed upon and signed, the property it is still ultimately the landlord's responsibility. "If a tenant fails to pay a utility account that they said they would, the landlord is the one who will face the consequences in the long run. Landlords should always be aware of what is happening with their property and make sure that the accounts are paid and up-to-date. Certain measures can be taken to minimise the risk posed by a defaulting tenant, such as prepaid electricity and water meters, for example. If this is not an option, a deposit for these accounts can be agreed upon beforehand," says Goslett.

While it is important to be respectful of a tenant's rights and their privacy, it is advisable that landlords conduct regular inspections of their property. "It is essential that the inspections are at the tenant's convenience, making sure that any issues or breaches in the contract are dealt with as soon as possible. If problems are left, they could end up costing a lot more to rectify or sort out. For example, if the landlord does not address late or non-payment immediately, within a short space of time the tenant could be a few months behind and incurring further utility costs. Aside from the escalating costs, the landlord may have to institute legal action in order to get the tenant removed from the property, which will also be a costly and time-consuming exercise," explains Goslett.

He notes that a professional rental agent is a good option for landlords who don't have the time to manage their rental portfolio. "For a percentage of the rental income, an experienced, reputable rental management agent will have the expertise and resources to ensure that the property is managed in the correct manner. This is a small price to pay considering the many benefits of using a professional management agent - not only will they assist the landlord with tenant selection, reference and credit checks along with the day-to-day property management, but they will also be up-to-date with the latest legal and regulatory developments to protect the landlord," says Goslett. "Rental agents will have procedures and systems in place to professionally avoid any potential problems and deal with any disputes that may arise. If necessary they will also have access to the legal resources and experience to deal with any situation efficiently."

If a rental property is handled in the right way from the beginning, with ongoing professional management, many unnecessary and unpleasant situations can be avoided. "Taking the right measures from day one can be the difference between a landlord in trouble and one whose buy-to-let portfolio is not only producing a regular income, but is also growing in capital value," Goslett concludes.


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