Many people become a ‘landlord’ with little knowledge of the realities of what the process involves. Maybe they are moving out of their former home or part time home, but wish to retain it and let it out. Or maybe they invested in property at the height of the boom here in Tallinn. Or perhaps they came by a property through family connections. Whatever the case, a lack of knowledge about being a landlord can lead to such unwanted scenarios as unexpected expenses, void periods or problem tenants.
To help you avoid any of these undesirable situations, here are some important pieces of advice that we will give to any aspiring, or existing, landlord!
- Be prepared to be flexible in rental prices. Sometimes a happy situation will arise where a property will immediately be let out for its full asking price, but at other times, particularly when it is a renter’s market, it might be wiser to accept a reasonably reduced offer from a potential tenant rather than hold out for the full amount and carry the burden of a void period for any length of time.
- Steer clear of void periods at all costs, even if this means being flexible about rent figures. This also means you should be flexible in terms of rental periods, for example having a short term let for part of the year and longer terms the remainder, to maximise profits and minimize void periods. This can have the effect or earning 10-15 per cent more per year. Naturally having a fully managed service will mean that the hassle of organising this is out of your hands.
- If the property was formerly your personal home or part time home, or contains fixtures and fittings left over from a former occupant, be prepared to make the necessary internal alterations in order to successfully attract a tenant. One’s own personal tastes may not match with those of other people. Experience has shown that tenants on the whole prefer light, neutral colours and modern (but not too extreme) fixtures and fittings. Time to get rid of that lime green ceiling or novelty lampshade! ‘Minimal is king’, is a useful watchword here.
- Consider getting a property professionally cleaned at the end of a tenancy period. This can work wonders in attracting a new tenant, breathing new life into worn carpets and making grubby tiles sparkling again. First impressions last and it would be a shame to put off a potential tenant simply because of an unpleasant odour or dirty bathroom.
- It’s worth having an inventory taken (even in unfurnished properties). This lists in detail all the items which have been left in the property for the tenant’s use, and the condition of the apartment in general. This will be signed by both landlord and tenant, thus avoiding any unpleasant disputes arising surrounding any damage at the end of a tenancy.
- Expect a certain amount of wear and tear. This is only inevitable, and over time items will need to be replaced. As a general rule, fridges and other white goods will need to be replaced as they become outdated or cease to work over the years, and a property will need small redecoration works and maintenance works approximately every four years. Wooden parquet flooring also requires attention from time to time.
- Do not leave anything of great financial or sentimental value in a property which you are letting out.
- Location, location, location: something of a cliche but true nevertheless. Experience shows that the best chance of investing in a successful rental property falls within the central part of Tallinn. This incorporates the old town, the ‘Kesklinn’ (city centre) and to a certain extent the areas of Kadriorg and Kristiine, to the east and west of the centre respectively.
- Do think about the type of property you are investing in. Is it likely to be suitable for a student, foreign national or young professional(s)? How old is the building? What are communal areas like? Are there likely to be any planning permission issues? Is there much storage? Is there a parking space? A garden? What are the communal charges? Is it near public transport links, retail outlets and other facilities?
- Keep in touch: your managing agents can advise you about developments at the property, maintenance issues etc, but always respond to emails and queries on this promptly. This will lead to a better relationship with a tenant and an increased likelihood that they will want to stay on.