Investing in property has been a great way for people to diversify their investments and supplement their income from full-time employment with income from rent. Landlords that are in full-time employment can choose to manage their property themselves or with letting agents. However, the legal requirements for renting out properties in the private rented sector have increased over the years as well as the fines for non compliance which means that landlords are now implicitly expected to become professional landlords or work with letting agents to stay compliant. This article explains what a professional landlord is and how software can help them stay compliant whilst offering a better experience to tenants.
What is a Professional landlord?
A professional landlord is a landlord who considers their rental properties like a business. This means that they have a business plan and view their properties as the offering and tenants as customers. Professional landlords strive to offer a professional service to their tenants and satisfy their obligations as a landlord in the private rented sector.
Are all landlords in the private rented sector professional landlords?
Becoming a professional landlord and staying compliant requires a significant investment from landlords both in time and money which means that it can be harder for small time landlords with less rental income to keep up. It's therefore difficult for a part time landlord with a day job to view their property investment as a business and it might not make economic sense to become a professional landlord. As a result, these landlords are either choosing to sell their properties or work with a letting agent to keep up with regulation and the demands of the property market.
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What are the benefits of becoming a professional landlord for your rental properties?
One of the key benefits of being a professional landlord is being compliant with the government regulations which can impose significant fines for any breaches. The second benefit is that a professional landlord will offer a better rental experience to their tenants. This is because the rules and regulations are broadly designed to protect tenants and offer them fairer and more transparent rental conditions. A tenant who rents from a professional landlord is also more likely to be a good tenant as they will need to comply with regulation too.
Why professional landlords use data to make better decisions
Treating your rental properties like a business means making decisions that maximise your return on investment. Property market analytics tools like PropertyData can help landlords and investors make better-informed decisions when researching local areas, sourcing opportunities, and doing due diligence on a potential purchase. Using data to inform your decisions shouldn't stop after purchase, either. Professional landlords use data to make the right decision when choosing how to set the rent at a rent review, or working out whether it's time to sell a property and reinvest the proceeds elsewhere.
How to professionalise a property portfolio?
The first step to becoming a professional landlord is to have a business plan for your property business which will track your outgoings (E.g. mortgage payment), rental income, rental yield and determine a clear path for growing your property portfolio. The next step is to familiarise yourself with the legal requirements of a landlord and which additional rules might apply so that you can budget the time and training into your business plan. Finally, you should identify software platforms which can help you streamline your property business and stay compliant. For example, property management platforms help store information about your properties and rent so that you don't need to track the data manually in spreadsheet. You can also use a contract management platform like Legislate to streamline your tenancy agreements and related documents and prove your compliance digitally. Moreover, by using Legislate you'll unlock unique property insights from the data contained in your contracts. In order to create your tenancy agreements today, create an account by signing up now.