There’s some sentiment online that if you’re a landlord, you have everything easy. Of course, having someone pay off the expenses of a spare property you own, helping to expand your equity and portfolio, is certainly good for you and not so good for the tenant. But the truth is that the rental market often provides more flexibility to people, even if this is certainly a political discussion that should be had back and forth.
Regardless, if you aim to rent out a spare property, a private room, or another premises, odds are you’re wondering just how difficult it all is. The online discussions you may have come across can wildly overestimate or underestimate the difficulties present, to the point where you might not know where to begin.
In this post, we aim to provide a clearer picture by discussing some of the difficulties landlords experience. They’re not necessarily worse than any other job you’d have of course, but it can be a job. Let’s discuss that:
Photo by Ivan Samkov:
Managing Letting Agents
Many first-time landlords think that hiring a letting agent removes all the work from the job, but that’s not true for the most part, because you still have to communicate with them often and sign off on final checks. For some landlords, it can feel like managing another business to manage your property, and that takes time and oversight. It’s helpful to check in with them about tenants, maintenance and the general inspections of the property to make sure they’re sticking to the agreement you set out.
It’s true that agents are usually great at screening tenants and collecting rent, but you still need to monitor the paperwork and make sure they’re handling repairs. After all, you’re the one who is financially responsible for the property, so leaving everything up to an agent without supervision can potential let some issues fester. Not all letting agents are going to be perfect with catching every issue too, as they have many property and people to manage, so setting aside time to review their performance and communication is a necessary part of the job.
Continual Maintenance
A rental property always needs maintenance, even if the tenant is a good one. After all, it’s not simply a case of fixing a broken boiler or patching up a fence when a tenant calls, you’re often expected to be proactive about maintenance, which means you’re constantly planning and budgeting for future needs. For example, some issues the tenant isn’t responsible for, like roof inspections, gutter cleaning, and servicing appliances like the boiler or radiators.
Like with any property care, ignoring small issues is inevitably going to inflict you with very expensive problems, so setting up a schedule for yearly or bi-yearly checks is what most landlords do. Remember that you’ll also need a reliable team of tradespeople you can call on in an emergency, and you may need to build that relationship over time as well.
Tenant Care
A good tenant relationship is of course better when they pay the rent on time and don’t harm your property. That’s not too much to expect. But at the same time, it’s helpful to remember that you’re dealing with someone’s home, and that means once they have the lease, you need to give a certain level of respectful communication and responsiveness for them to work with. For the most part, all tenants appreciate being heard when they have a problem, even if the solution isn't immediate, and the should know who to contact.
Even if the letting agent mostly deals with this, you may still need to be available for emergency calls, or at least having a service that is. As you own the property, you may also need to deal with neighbour disputes, too, which can be awkward and emotionally draining at a minimum. It’s rarely spoken of, but remember being a landlord often involves wearing a customer service hat, and being fair, patient, and professional with your tenants. It’s work to do this, of course, not an easy ride as some might say.
Taxes & Bookkeeping
The financial side of being a landlord is often a surprise for people, because it’s not just free and easy money. It’s a job with many deductibles, expenses, and sources of income that all need to be recorded and filed correctly, and you’ll have maintenance receipts, insurance payments, mortgage interest, and the rent itself, which all combine to make tax time complicated.
Some decide to hire an accountant who are capable managing property owners, but you can also also simplify the work by using software that automatically tracks rental income and expenses for tax time. Either way, you need a system for handling all the numbers, which takes real effort throughout the year. Of course, this is non-negotiable; you can’t just automate this, you absolutely have to make sure the books are taken care of and also keep up with market rates and what you can claim against.
Rules & Human Issues
This isn’t something you can quantity really, but every landlord will confirm that keeping up with all the legal rules and dealing with the less predictable parts of human nature, and balancing the two, is still part of the job. Tenancy laws are constantly being updated, and it’s up to you to make sure your lease agreements and practices are compliant. What was legal last year might not be legal this year, for example with the renter’s rights bill that’s become a hot topic in the UK.
Then there are the personal issues. Life happens to us all, and tenants might lose their job, have a medical crisis, or simply decide they don't want to follow the rules anymore. You have to handle these situations with a balance of empathy and professionalism, which can be tough. If a tenant you get along with has lost their job and can’t find another, and can’t pay your rent, what do you do? It’s tough, but most will have to come to some kind of understanding arrangement but then ultimately put their foot down. It’s a hard ask. Moreover, understanding the legal process for resolving disputes is helpful, but ideally, your strong vetting process means you rarely have to use it.
With this advice, we hope you can have a clearer idea of some of the challenges modest landlords face.