Six things to consider before becoming a private landlord
Many people are looking into becoming private landlords as a way to make more money from property. However, there are a few things that need consideration before you take the leap into property letting.
One of the first things to think about is getting the right insurance. You need landlord insurance in order to let safely. Also, make sure you have the right level of contents insurance and buildings insurance as many of these won’t cover you if you are letting out the property.
Make sure you have an appropriate ‘buy to let’ mortgage. A regular owner-occupier mortgage won’t be appropriate for your needs and could be classed as mortgage fraud. If you already have a mortgage on the property you wish to let, you will need to discuss making the switch to a ‘buy to let’ mortgage.
There are many costs hidden when you let your property so you need to crunch the numbers to ensure you know exactly what you can expect to pay. Outgoings will include: mortgage repayments, insurances, any letting agency management fees, income tax from the rent you make, contingency money of around 10% to cover unexpected costs, a couple of month’s money to cover times when the property is unoccupied.
Think about who you want as your tenant before you start marketing your property. Consider whether you would prefer to rent to students, families or single professionals. This also helps decide if it should be furnished or unfurnished. Single people, sharers and students might want a ready-furnished home, but established families usually prefer unfurnished.
You also need to consider how to manage your property. This means collecting rent and organising repairs and maintenance. If you live close by, you could manage this yourself, although remember this might mean the tenant can contact you at any inconvenient moment. Many people prefer to use a management company, such as Cheltenham property management to take care of day to day matters. You can find guidance online easily from sites such as https://www.completepropertygroup.co.uk/property-block-and-estate-management/ when looking for management help or other issues.
Consider how you will find tenants. Most people look for properties online when they begin their search. Most large online property portals require you to have an estate agent to get registered on their sites.