Amateur landlords, beware

Lynn Hilton, an experienced lettings agent with Cluttons, said: “Many new landlords are not entering the lettings market by choice, and they have a great deal to learn about the business.

“A number of them are missing out on opportunities to let by refusing to budge at all on the asking rent, instead settling for void periods, which every professional landlord knows is seriously detrimental to yields.”

The big problem for many temporary, amateur landlords is that they do not anticipate costs involved when tenants demand various improvements.

“The drip feed of costs from a rental property can come as a shock to many homeowners who are not used to being forced to upkeep their property to high standards as part of a contract,” said Lynn.

“They are also often unprepared for administration costs arising from contracts and inventories.”

However, buy-to-let expert David Lawrenson says many of today’s property millionaires started as landlords back in the last property slump of 1989-95, when they had to rent out their first property through default rather than choice.

“For each millionaire today, there were many back then who had a go at being a landlord, had a bad experience and then gave up and cried off hurt,” said David.

“Once again, we will see many novice accidental landlords sign up with lettings agents to find them a tenant.

“There is nothing wrong with using an agent, but they will happily sign contracts with the lettings agent where they will end up paying big letting-agent fees forever, and long after the agent has found them a tenant.”

David suggests, that in some parts of the country, high and ongoing renewal fees have become standard practice among agents, who foist them on novice landlords who don’t know any better or fail to read the small print.

Homeowners must also inform their mortgage lender if their home is about to be occupied by tenants, which may mean a higher mortgage rate being charged. Insurers should also be told when a home is rented out.

New rules from April also require that tenants’ deposits to be lodged with a landlord deposit scheme.