David Alexander: Whipping the rental market into shape

'Buy-to-let should be treated as a business, as opposed to a hobby,' writes DJ Alexander managing director David Alexander. Picture: Ian Georgeson

Does this go on in Scotland? I would be surprised if it didn’t, although not on any large scale. And if so, it is almost certainly confined to direct letting arrangements between landlord and tenant; certainly I have never heard of one example within the “regulated” sector, i.e. when a bona fide letting agency is involved.

However, this does not mean that the issue does not raise its head within the residential letting sector, as it does in most other walks of life.

In recent years, Edinburgh has become a magnet for incomers, from south of the Border, the EU and far beyond that, and given the capital’s reputation for highly-paid jobs, this has almost inevitably also attracted a number of “camp followers” intending to play a less legitimate role.

We had one lady tenant from North America – stylish and with impeccable manners and holding excellent references – who described herself as an “author”. Another apparently first-class applicant told us she was a “yoga teacher”.

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All were seemingly excellent tenants. They lodged substantial deposits and paid the monthly rent timeously. They were also ultra-quiet: no loud music or noisy parties. However, there was one problem. As the neighbours soon realised, solo men began turning up at the properties at all hours of the day and night.

Eventually they raised their suspicions with us and these turned out to have been prescient. Clearly, we had no alternative but to end the tenancies. There have been other tell-tale signs, as when one of our maintenance team became aware of a large supply of canes and padlocks while carrying out a repair in a flat. It later turned out that our prim and proper tenant had a website in which she offered “correction services”. Despite being a good tenant in every other respect, she too had to go.

The only behaviour I recall that came close to that referred to in the opening paragraph concerned a landlord who started turning up late in the evening just as his single lady tenant was preparing for bed. We made the landlord aware that such behaviour was totally unacceptable and the visits stopped.

One reason why the above incident is rare is that landlords contracted to a letting agency are made aware of the restrictions in access to a tenanted property. Except for an emergency, a landlord cannot turn up without notice and expect automatic entry – or use spare keys to gain access if the tenant is not at home.

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Two of the most common mistakes made by landlords new to buy-to-let is not taking due cognisance of location and how a property is presented. Choice of location should take preference over choice of property and having secured a property, the landlord should decorate and furnish it, not to his/her own taste, but in a way that will appeal to as many potential tenants as possible, even at the risk of appearing bland.

Another golden rule for landlords is keeping a respectable distance between themselves and their tenants. Buy-to-let should be treated as a business, not a hobby, and it is not in the owner’s interest to become involved (even in just a platonic manner) with a tenant lest the former is persuaded to make an emotionally-charged – and potentially unwise – decision (e.g. relating to rent or numbers of occupants).

A vital part of the agent’s role is to deal with any tenancy problems in a dispassionate manner to ensure that their property-owning clients are not taken advantage of nor unwittingly break regulations which may open them to prosecution. Landlords, like the rest of us, are only human after all.

• David Alexander is managing director of DJ Alexander

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