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Welcome to Day 3 of our new week of themed content, here on Property Tribes, where we are looking at different business risks in the property sector and how landlords can mitigate them.This is all part of our year long "Smart Landlord" campaign, celebrating the 10th anniversary of Property Tribes and, hopefully, over the past decade, Property Tribes content has assisted landlords in avoiding the pitfalls by making someone else's hindsight their foresight and sharing tips on how to reduce risk.This graphic illustrates the process of risk mitigation in business:For this week, we have identified three main types of risk:1. Risk of financial lossThis could be through a tenant not paying the rent, buying a bad property deal, suffering void periods, interest rate rises, making poor business decisions, having a tenant on Universal Credit without having direct payment to landlord, a "black swan" event such as a major local employer shutting down.2. Regulatory riskThis covers everything from Government intervention, increasing legislation, and fines for non-compliance - which can be up to £30K. There are now over 180 Government statutes and regulations that landlords have to adhere to in order to provide a compliant and safe home for tenants.3. Rogue riskEncountering a rogue tenant, lettings agent, property trainer/guru, builder, or some other person or business you transact commercially with.Ultimately, all of these will result in financial loss, not to mention stress and emotional heartache, so smart landlords look to mitigate their risk at every opportunity. They know that prevention is ALWAYS less expensive than cure!Property Tribes spoke to CEO of the Association of Residential Lettings Agents (ARLA) about the importance of using a reputable and correctly regulated lettings agent and how that reduces many different types of risk for landlords:
In the interview, David mentions the £5K fine for each breach of the Tenants Fee Ban. You can find a useful guidance by TDS here.Northwood are Property Tribes' letting partner and are one of the most trusted names on the High Street, having been in business over 20 years. They meet all the regulatory requirements mentioned in the interview and their agents are also on a regular training programme to ensure that they are fully up to date with all the changing compliance.Northwood also offer their famous Guaranteed Rent Service, which is one of the best possible ways to mitigate against a non-paying tenant.
As well as being in "prevention" mode, smart landlords can insure against virtually every risk in property, and the Alan Boswell Group award-winning team are at PT members service to ensure they get the right level of cover. Call the ABG team on 01603 649736 .Another additional way to mitigate risk is to join a Landlord Association and take advantage of all their support services and training. Property Tribes is partnered with the Residential Landlords Association and PT members can enjoy 25% discount off joining.This is how the rest of the week is shaping up:Monday - the launch of week and looking at how landlords can insure against risk - with Alan Boswell Group.Tuesday - the importance of inventories with the Association of Independent Inventory Clerks and Inventory Base.Thursday - Mitigating business risk via due diligenceFriday - Mitigating business risk by using verificationSEE ALSO - How to vet a lettings agent ... 12 questions to askUP NEXT - Nothing trumps local knowledge in propertyDON'T MISS - An end to tenant feesNOW WATCH:
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**