Over the last few years, a lot of people have been taking advantage of low property prices and low-interest rates. Many of us fell foul to the financial crises of the last decade. But those with a modicum of savings and financial security were welcomed by the mortgage lenders. In particular, the buy-to-let market has done well. This is because mortgage lenders were keen to lend on a property that guaranteed you an income to pay it off.
If you are about to move into the realm of being a landlord, there are a few things you should be wary of. The type of property you should be looking for is the one you stand to make a profit from. It’s not all about the rental income. After all, tenants come and go, and markets have a habit of changing rapidly.
Ideally, you should be looking for a property that is structurally sound and easy to rent out. Your local estate agent should give you an idea of the types of property that are in demand. Often, small family houses are quite popular. Investing in one of these could help secure a rent to pay off your mortgage and even line your pockets with a little income.
Look for properties that need a little tidying up. These tend to sell below market price because they are less attractive than others. Don your overalls and a tin of paint. Fresh decor is important when it comes to attracting tenants. If the kitchen or bathroom are dirty or past their best, it may be time to invest in a new one.
You can buy a very cheap bathroom suite from reputable companies online. You might even have the skillset to instal it yourself to save more costs here. Housing standards are higher than ever. You need to provide clean, safe accommodation. You should also choose facilities that are easy to keep clean. This will save you a lot of time and effort when it comes time for your tenants to move on.
Time is money when you buy a property. Every day you have your property empty is a day of rental income you have lost. To rent it out quickly, you need to get the work done quickly. As soon as you pick up the keys, assess the condition of the property. Every place you buy is likely to have one or two common household problems. You must identify and rectify each of these problems.
You might choose to hire some help to get the work done so a tenant can move in more quickly and start paying rent. If you have someone lined up already, this is ideal. However, if the property you are buying cannot be advertised until you have made the improvements, you need to work fast for that photo finish. Doing it yourself will reduce the initial outgoings, but you may be costing yourself time.
Keep finishes simple, but make sure they are of good quality. Poor quality finishes like scrappy edging puts people off. Look through other agent listings. You might even view a few rental properties to get an idea of what the competition is offering. Your initial deposit for the mortgage could well be equalled by any improvements you need to make, so ensure you have the cash to invest.
Once you have the property in good condition, it’s time to get your advertisement out. Becoming a landlord for the first time can be quite a scary proposition. You need to manage contracts and ensure the tenant’s deposit is invested appropriately. You will also be on call for any household emergencies. Several companies offer landlord maintenance insurance. This means tradespeople will come to your rental property as required. You may need to pay an excess charge, but at least the essential works will be covered in an emergency.
Each year, you will also need to maintain the property. The house will need to continue looking neat and tidy as well as being structurally sound. Your tenants are legally required to give you access with notice. Check the property over if there is a storm. You could be liable if the tenant’s possessions are damaged due to your negligence. Safety at all times is essential. Annual gas safety checks are legally required at your expense too.
It can be a very wise investment to purchase a buy-to-let property. Mortgage rates have been quite favourable for this purpose for a while. Earning rental income and paying off the mortgage is ideal. You will then own that property outright so you can reap the rewards of any increase in value over time. Ask your local agent if a buy-to-let is right for you.