Seven 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 sure-fire investment for the past two decades.

And some of the people who have gained the most are those who have entered the buy-to-let market.

Get it right and you get a steady source of income.

Get it wrong and you could be out of pocket and tied up in knots.

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, it means 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.

Do it for the right reason

Buy-to-let can be lucrative and a good alternative to a pension but anyone thinking of 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 look at it 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 maelstrom, it’s a good idea to find out a bit about what being a landlord is like and get some independent professional advice.

It’s important to do some research into 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 thing is making sure you find the right property for you and your budget and your capacity to deal with the inevitable problems that will occur.

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. This could be 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 really 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 the shared house set up or someone more studious, a post-grad for instance, wanting 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 short term by 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 and 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.

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