Fly-to-let Landlords have dealt with some pretty nasty events while renting out their property overseas. Every now and then we hear horror stories and some of them are reason enough to ruin the fun for good. While most tenants are as good as gold or close to, landlords can never be too careful with regards to protecting their own rights.
We have compiled a list if ten tips that will help you to stay on top as a fly-to-let landlord so you can sleep better at night. We hope they can serve as some kind of guideline. However, since every country has their own rental laws you are well advised to check legal issues with a lawyer before you become a landlord yourself.
1.) Who pays when?
When it comes to renting, confusion often starts with the cost of paying for certain related expenses. It helps if you understand where you stand before you dive in head first. If you are a property owner looking to rent out your home, you should also be aware that expenses don’t stop with your mortgage, your tax or your insurance payments.
Extra costs must be considered and might stretch your budget. As long as you are aware they could surface, you should be well prepared though. When you budget for extras, try to factor in the following:
- Lawyers fees
- Property management fees
- Council rates
- Landlord protection fees
- Pest control
- Fire alarms
Depending what country you have your property, there might be additional costs to consider. A good starting point to help you determine those costs is to check with the local council first.
While many property agents offer to take care of advertising for you, most people prefer to do it themselves to save costs. If you are letting a holiday property, it might be worth checking these holiday property letting websites out:
They have smart features like availability calendars, maps, galleries and guides to help you get started renting you holiday property.
If however you are renting out a residential property overseas, we strongly recommend using a property management company or local estate agent for help with advertising and tenant vetting. Since they are familiar with local property laws and local market, they tend to have the know-how.
If you have lived in the country and are familiar with the terrain, you can always choose to advertise yourself As a last resort.
3.) Screen those applicants
When you hand strangers the keys to your home you want to be sure they treat it with the respect it deserves. Therefore it is highly advisable to screen all your tenancy applicants before you accept them.
Careful screening could save you headaches and costly court cases down the track. Below are some ideas on ways to screen them:
- Credit checks
- References from previous landlords
- Clear instructions to your agency if they handle the application process
Communication is the key. The more you communicate your needs to your property agent, the better the chances of the perfect match.
If you own international property the screening process could become more complicated. In general, the screening process for serviced apartments is done by the letting agency. Holiday lettings usually come with huge deposits demanded by the landlords. This is an additional security to cover probable expenses, since it is very hard to screen international applicants in the first place.
If you are unfamiliar with a country’s property letting system it is best to appoint a local agency to take care of these matters for you.
To ensure fair conditions for both parties – tenant and property owner, an inventory checklist will have to be created before the tenant moves in. This will also protect both parties if there is ever the need for a court case.
Each room will have to be listed separately on the checklist. Things such as the state of wall coverings, light fittings, appliances and marks on the walls, etc. will have to be noted in a checklist. Property agents will usually offer this as a service to you. While this is great, be sure to check how careful they are in creating these lists. Ask to see some samples of past check lists and make sure they scrutinize things carefully. It’s in your own interest.
After all, if your property is located overseas, this check list is everything you might have in knowing what exactly is in the house or flat. Especially if you can’t see the property between tenants or for any other reasons, this list might be the only “visual” you have to know the actual state of your investment.
5.) Communicate with your tenants
In some countries it is impossible to communicate directly with a tenant, especially if a property agent has been appointed. Regardless of who you are dealing with, agent or tenant, regular communications are a must.
Whether this is done via email, letters or visits to the office isn’t so much an issue. Important is to stick to a schedule that applies with the law.
6.) Contracts – did we say they are a must
We are sure that most people would use a contract to let their properties. Contracts are usually drafted to local customs. This means if you were to own and rent out a property in France, but you live in England, the contract will be drafted according to the French law. Therefore it is imperative you use a lawyer who is familiar with those laws and customs.
Failing to spend money for the right lawyer could cost you your property. Using a lawyer will make sure everything is correct before you sign anything.
7.) Renovation costs
I know we mentioned repair costs in an earlier note, but renovations are big. So big in fact they deserve their own number. If your property has been rented out for some time you might have to dig deeper into your pockets and fund some much needed renovations.
These could be inflicted by the tenants themselves, which could be paid by them (depending on contracts, law and execution of tenancy contract). Regardless of the why, renovations can be very costly and would have to be budgeted for ahead of time.
Some landlords will also need to factor in the cost of travel to oversee renovations in foreign countries. They might prefer to handle things themselves and be at hand to choose colors, applications and building materials. Also, others even fly in their builders and interior designers although this could become very costly indeed.
We never hope it will come to this. But if it does, it helps to know your options. Before you run to court though try to solve the problem with other means first, like an informal meeting.
If all else fails, court cases can often be the only way out, albeit a very expensive one. Try to be informed in order to avoid a nasty wake up call. With international property letting court cases can become the nightmare you never hope to experience. Not only would you be expected to show up there (which means extra expenses like flights, travel), but you would also have to deal with situations totally foreign to you. Other customs, strange languages or a difficult court system could become massive barriers for you.
Hardly something anybody would ever want to experience. Therefore it is better to be safe than sorry.
9.) Your rules!
You can define certain rules such as not allowing pets in your home. Regardless of rules don’t be discriminating. Keep rules the same for all tenants. This will ensure peace in the house.
We like to touch on the discriminating part a little more. As you know, foreign countries have foreign laws. Before you set out rules that would be totally unacceptable to other ethnic groups, be sure to familiarize yourself with them. You could easily discriminate if you are not willing to immerse yourself into the other culture.
10.) Last but not least – Insurance
Insurance also deserves its own mention. Because without decent cover we could lose it all in an instance. Know you options and talk to your lender for some great rates:
- Landlord protection
- Storm cover
- Content insurance
- Building and content insurance
Again, every country has different rules and regulations. You are advised to cover yourself for all eventualities. Sometimes it is more feasible to package all the insurance costs and at other times it is better to keep them separate.
In the end it will have to be right for your needs.