Investing in property is a serious business and there are many things you should consider before you make the decision to become a landlord. Renting out a house or flat can provide you with a steady income, but it can also be a lot of work, so remember this before jumping in.
Here are just a few of the things landlords need to think about in order to make the most of the lettings market in the UK.
Firstly, you will need to decide what type of property you are interested in buying. This will, of course, be dependent on your budget, but the kind of house or flat you invest in will also impact on the type of tenant you attract.
Three or four-bedroom homes are more likely to be rented by families, for instance, while two-bedroom flats could be better suited to couples.
It is vital to do your research about the rental market in the area in which you are planning to buy. This will enable you to gauge how much you can realistically charge in rent each month and will give you the opportunity to work out whether this will be sufficient to cover any mortgage payments you may need to make.
Once you have selected a property and made a purchase, you will have to think about how you are going to manage your new investment.
Although it might be tempting to go it alone, you may benefit from the experience and assistance of a lettings agent.
In addition to being able to find tenants for your property, they will be able to take care of any problems as and when they arise.
This means you do not need to worry about being contacted about essential maintenance work that may crop up at short notice – the agency you work with will sort such issues out and you can simply pay for any work on top of the fee you are charged.
As well as looking after the house or flat, if you rent property you will also have to consider how to deal with your tenants.
While you may be lucky and have people who always pay their rent on time and cause no problems, you should always prepare for the worst case scenario.
Imagine that your tenants repeatedly fail to pay rent, cause damage to the property or breach other aspects of the rental contract. In such instances, the assistance of a lettings agent can be invaluable.
These firms have experience in dealing with such problems and will have the legal knowledge to support any action that is taken, keeping you on the right side of the law.
You will need to carefully consider any tenancy agreement you draw up and ensure it covers important points, such as rules relating to smoking, pets and the amount of money required as a deposit.
When you rent your property, you will want to take an upfront payment from your tenants to cover any expenses you have when they move out, as well as to provide a safety net in case they miss a rent payment.
However, it is not as simple as taking the money and leaving it in your bank account; you will need to register with an approved tenancy deposit scheme in order to protect yourself and your tenants.
Such initiatives mean that both parties have to agree to any deductions from the deposit when a contract comes to an end, ensuring that the process is fair for all involved.
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