September, 2020
Six Ways Landlords Can Ride Out a Recession
In this three-minute read, we explain how landlords can navigate their way through choppy economic waters and achieve good returns on their investment.
When officials announced on 12 August that the UK had entered recession, lots of economic experts came out of the woodwork.
Some predicted things would get much worse; others suggested the downturn may be less severe than first predicted.
The truth is this year has been so unprecedented, it’s difficult to forecast the road ahead precisely.
With so much uncertainty landlords in The New Forest may feel a little wobbly, but the good news is that there are steps you can take to ride out the recession.
The key is to understand that it’s not about doing one single thing right, it’s about doing several things well.
It’s a bit like being a top tennis player. The world-class players lining up for Wimbledon don’t spend all their time hitting balls (although they do spend a lot of time on court).
They also carefully monitor their diet, work with a psychologist to strengthen their mindset and do strength training at the gym. It’s this multi-pronged approach that gives them the edge.
Landlords hoping to avoid a double fault need to take a similar approach. Here are the key things on which to focus.
Tenant selection
Get off to a good start by selecting a good quality tenant. Ask lots of questions and carry out thorough credit and reference checks. It may be tempting to cut corners at this stage to save time, but you could come to regret it.
Mortgage deal
It’s surprising how many landlords lose money because they are not on the most competitive mortgage deal. As interest rates are so low at the moment, many people are locking themselves into three or five-year deals so they have certainty.
Be a people person
You need to foster a good relationship with your tenants. Never assume that because you haven’t heard from them that everything is hunky-dory. Keep in regular contact so that if their circumstances change, you know as early as possible. The last thing you want is your property sitting empty because the tenant has had to vacate at short notice.
Keep calm
If your tenant’s situation changes, don’t make any rash decisions. If a reliable, trustworthy tenant finds themselves in difficulty, is it worth cutting them some slack? Every landlord has to make decisions based on their individual circumstances. But before you rush in, consider all your options and seek advice from experts on the local property market who can update you on rental prices and demand.
Maintenance
A tennis player would never compete with a racket that didn’t have a new strings or fresh grip. Take a similar approach to property maintenance. It may seem appealing to save a little cash by delaying maintenance work, but it always costs you in the long run. Neglecting your property can breed animosity with tenants and lead to small DIY issues becoming major building works.
Use a letting agent
The top professional tennis players have a strong team behind them. This allows them to focus on what they do best and stops them from getting bogged down with admin and paperwork.
Here at BrightWater, we’re ace at managing tenant relationships and properties, making us the perfect match.
