Buying a second home with the intention of leasing it out to tenants is the first step on an investment path that can be both enjoyable and financially beneficial. However, the responsibilities of the landlord go far beyond purchasing the property itself, so it's essential that you understand the role you'll be expected to play before committing to any part of the process. With the numbers of private tenants rising rapidly in several European countries, it's essential for landlords to maintain their property to the highest possible standard in order to attract tenants of the right calibre and protect their investment.
Although financial stability should always be the key requirement for anyone moving into your property, it's worth conducting a more detailed screening process before allowing interested tenants to move in. It's important to maintain your standards when selecting tenants, but remember that this paradigm works both ways, making it your responsibility to keep everything above board. If you expect your tenants to be completely honest about their salaries, credit history and lifestyle, you should be equally honest with regards to the property. Fix or renovate any elements that you wouldn't be prepared to put up with yourself and ensure that the house is up to date on environmental regulations, with no hidden problems that could cause issues later on. At the same time, be rigorous when reviewing letters of recommendation and credit checks to ensure that your honesty and commitment are reciprocated.
Once you've found tenants you're happy with, make sure every part of the agreement between the two parties is in writing. As well as rights, both tenants and landlord have responsibilities, which should be formally established before the move-in date and followed to the letter from then on. As property owner, you are responsible for the essential maintenance of the property, without which it will almost certainly decrease in value. If your tenants report any issues, from broken appliances to damp or infestations, it's your duty to respond quickly and efficiently. Make sure you always communicate with your tenants - even if there's no possible way to send over a repairman until the following week, keeping them informed will prove that you appreciate their concerns and are making every effort to address them. Remember that a well-maintained property can also be listed at a higher price, so despite the initial costs, tenants alerting you to any deterioration will be beneficial for you in the long run.
The upkeep and bills for an empty property are simply not worth your while; so if your tenants are responsible, reasonable and ethical, hold on to them. Respect their rights by giving reasonable notice before visiting the property, keeping copies of communications and responding to their queries and requests. This gives you the right to expect the same from your tenants, who should pay their rent on time, keep the property clean, and give reasonable notice before moving on.
At Engel & Völkers, we have years of experience in working with both property owners and renters to reach mutually beneficial agreements. With shops in countries all around the world, we combine local expertise with an understanding of the global market to help you establish everything from the ideal location to the appropriate rent. For more information, just visit our website.