Managing your tenancy
Perhaps you've bought a property with a tenant already living there. If so, you need to learn how to manage a pre-existing tenancy efficiently. If you're new to the lettings business, the work doesn't stop when your new tenant moves in. You still have responsibilities and you want your tenant to feel at home, to be content living in your property, so that they remain there as long as possible. This secures a regular income from your investment.
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What you need to know:
- What is tenancy management? >>
- The basics of tenant management >>
- What processes can I put in place to manage my tenants? >>
What is tenancy management?
A pre-existing tenant may feel a little vulnerable when the place they call home is sold to a new owner and they suddenly have a new landlord. Contact the tenant as soon as your purchase is confirmed and arrange to meet them. Be accessible, find out how they communicated with the previous landlord, whether there's anything needing to be repaired or any requests for decoration or fittings and fixtures. If you sort these things out quickly, as well as being professional and efficient with all the paperwork, your tenant will be reassured and much more likely to stay. And if you know they have been a good tenant over a long period, you could offer a longer tenancy to give them a sense of security and to reduce your risk of a void (or gap) between tenancies.
You've checked your tenant into the flat, handed over all the relevant documents, received their deposit and first month's rent - what do you do now? Just watch the bank balance grow? Not at all. Communication with your tenant is a crucial part of maintaining a good relationship. A tenant diary is a positive way forward. The tenant can report any problems, confirm any visits, and you can let them know their rent has arrived and alert them if you or anyone else needs to visit the property.
The basics of tenant management
A positive relationship with your tenant
A happy tenant is much more likely to renew their lease and the key to a content customer is professional, friendly, active communication. Establishing contact, finding out if you can improve your property, which is also their home, and acting promptly on your tenant's requests or concerns are all vital steps in successful tenancy management.
Rent - the good, the bad and the ugly
The rent pays the mortgage and hopefully provides a profit. Before your tenant moves in, check references from their previous landlord and employer, and carry out a credit check. The NLA Credit Check is a useful tool.
Plan your letting business on the basis that you will receive rent for ten out of twelve months, in case of either a void (empty property between tenants) or rent arrears. And if letting to students, insist on having a guarantor - a third party (usually a parent) who will cover any non-payment on the student's behalf.
The NLA Rent on Time scheme removes the risk from renting, guaranteeing that rent will be paid into your landlord account, irrespective of whether the tenant has paid. This is a sensible investment as occasionally circumstances mean your tenant can't pay. Don't ignore a missing payment, communicate quickly with your tenant and ask if there's a problem. Send a friendly reminder that the rent date has passed. Keep a record of all communication.
A regular repayment plan is a practical option for rent arrears. If this doesn't work, it's time for the small claims court. Finally, you can take legal action to evict your tenant. This can be time-consuming so it's advisable to sort out financial issues promptly and professionally.
NLA Rent Protect insurance covers you for up to £2500 per month for ten months and up to £100,000 of legal expenses. The organisation also has a personalised NLA Rent Recovery service, discounted for NLA members.
The benefits of a secure, well maintained property in tenancy management
In the first few months after your tenant moves in, introduce a regular email exchange, phone call or meeting to check everything is going well. Sorting out minor issues early in the tenancy will make them feel secure and valued. Update the inventory if necessary, check they know how everything works, keep an eye out for signs of damp, wear and tear or minor damage.
Regular inspections of paintwork, fixtures and fittings, safety equipment and general cleanliness are a good idea. Your tenancy agreement should state whether you will do this quarterly, every six months or annually. Spending money on regular maintenance not only reduces complaints from your tenants but also keeps up the value of your property. It's a win-win situation. When you visit you can take photographs if you are concerned that there is any sign of deterioration, and keep a log book in which you and your tenant can both record requests, comments or concerns.
Another area of great importance to both you and your tenant is security. An alarm, window locks, or automatic light sensors may seem expensive, but if they protect your property from burglary as well as reassuring your tenant, surely that's money well spent?
NLA Landlord Vision is an easy to use, secure, cloud-based property management software system which can help you to manage every aspect of a tenancy successfully.
What processes can I put in place to manage my tenants?
Communication, communication, communication
There are many different ways you can communicate with your tenant - face-to-face; phone; email; online fire safety log book, and a tenant diary. The most important thing is to communicate regularly in a professional, approachable way.
- Face-to-face meetings - these are important at the early stage. Be there for the check-in. Show the tenant how the hot water and heating work, explain equipment, demonstrate security locks and alarms. Give them confidence that your property is a great place to live and that you are there to help.
- Phone calls - give your tenant your mobile number and let them know when you're available - ideally 24/7. Phone contact is important for emergencies - a leak for example.
- Emails - these are usually the most regular contact point, forming a permanent record of your interaction. You can acknowledge payment, have regular check-ins, and the tenant can alert you to minor issues or requests.
- Fire Safety Logbook, available as a free download from the NLA, this records risk assessments, fire equipment safety checks and any fire or false alarms.
- Tenant diary - like email, a shared on-line diary can register rent receipts, safety check dates, repair requests and so on. And it's a useful permanent record.