Important things to consider before becoming a landlord
Investors who have gained the most from investments are those who have entered the buy-to-let market.
Property has been a surefire investment for the past two decades.
And some people who have gained the most have entered the buy-to-let market.
Get it right, and you will get a steady source of income.
You could be out of pocket and tied up in knots if you get it wrong.
Research based on the Government’s English Housing Survey shows there are 4.5 million privately rented homes in the UK, and property consultancy and estate agency Knight Frank said this could hit 24 per cent by 2021.
With house prices still high, an increasing number of people have no alternative but to rent privately.
It’s a complicated picture, but experts have listed seven things you need to do before making the buy-to-let leap.
Please do it for the right reason.
Buy-to-let can be lucrative and an excellent alternative to a pension, but anyone considering entering the market should be clear on why they are doing it and what a long-term commitment being a landlord can be.
The days of soaring property prices may have come to an end, so it’s important to consider property as an income, not an ever-growing pot of cash.
Don’t forget your tenants are real people, and you are dealing with their homes.
Research the market
Experts agree that before entering the buy-to-let, it’s a good idea to learn a bit about being a landlord and get some independent professional advice.
It’s essential to research the cost of houses and how much income you will earn.
Buy the right property.
What sort of buy-to-let do you want? A house or flat? And in what condition?
Who do you want to live in the house – students, families or workers? Is it appropriate for them, and, indeed, what the market demands?
The key is to ensure that you find the right property for your needs, budget, and capacity to deal with the inevitable problems.
Student houses can provide a good return but can be a headache for an inexperienced landlord, even if a management company is involved.
There is a lot of competition for the student pound which may make shared houses harder to let out.
Buy in the right area
Think about where you are going to buy. It could be a tried-and-trusted area or an up-and-coming one, but it need not be close to where you live.
Ex-local authority properties are considered excellent value for money as they are well-built.
Letting to the family market is good, but if you are thinking of the student market, then geography will be a major consideration.
It is advisable to look towards high-yield areas.
Target the right tenant for you
It matters what sort of person you want as a tenant.
Are you going for students or families or single workers?
If it’s students, are you looking for a shared house setup or someone more studious, a post-grad, for instance, who wants a one-bed flat?
Saving Money: Our guide to buying a second property
And what about holidaymakers?
It might also be worth considering letting the property out in the short term using a website such as Airbnb.
Get the best mortgage deal
Get your timing right.
Entering the buy-to-let market when mortgage rates are favourable is a good idea.
There are good buy-to-let mortgages available at the moment, with some lenders prepared to advance cash without fees and with no minimum income provided you have a 25 per cent deposit.
The British Landlords Association is a national landlords association for UK landlords. It is one of the largest landlord associations in the UK. Join us now for £79.95!
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Disclaimer:
This post is for general use only and is not intended to offer legal, tax, or investment advice; it may be out of date, incorrect, or maybe a guest post. You are required to seek legal advice from a solicitor before acting on anything written hereinabove.
