How do I become a landlord?

Becoming a first time landlord may sound an attractive proposition, but as with any business venture, it’s important to do your research. Here are our top 5 tips:

1) Research the market

Is there a need for rental property in the area that you wish to buy? What sorts of property rent well? What sorts of rental income can you expect to achieve? A local rental agent should be able to help you with these questions, it might be worth talking to a couple to get the best feel for the market. Have you considered in buying in a different area where the costs are lower? It might be that you’ll be able to buy a more lettable property with a better return.

2) Make sure you can afford it, even when the property is empty

If you need a mortgage to purchase the rental property, you’ll need a Buy to Let mortgage.  The lender will want to make sure that you can afford the mortgage on the property even when it is empty. You’ll need to provide detail of the expected rental income and be able to prove that the income will cover not just the mortgage but the maintenance too! What would happen if your tenant were to serve notice and the property would be empty for a few months before the next tenant started paying rent? Have you factored in enough maintenance costs? These are all questions the lender will want answered.

3) Decide if you’d like to rent the property direct to the tenants or use an agent.

You may save yourself some money by renting privately, but do you want the added hassle of a call at 7am on a Sunday to say there’s no hot water? You may pay a percentage of the rental income for using an agent, but they’ll run all the checks on the potential tenant and deal with any issues. Apart from saving on agents fees, the other bonus is that you can do the viewings and get a feel for who you’d like living in your property. If you do want to use an agent, do you want to use an online or local agent. Online letting agents (such as Purple Bricks) will probably be substantially cheaper than a local agent, but it may be that you prefer an agent you can walk into to discuss your rental.

4) Get up to date with the legislation

It’s not as easy as just letting someone live in your property in return for payment. You’ll need to ensure that you have a gas safety certificate, some local councils require you to have a landlord license, smoke alarms are required on every floor and carbon monoxide alarms are a requirement for any room with a usable fireplace or woodburner, if you take a deposit from your tenants, it needs to be put in a government backed tenancy deposit scheme. There is also legislation for HMOs (homes of multiple occupation), ensuring your tenant has the right to live in this country, EPC (Energy Performance Certificate) amongst others. The legislation is always changing so make sure you visit a reputable website, such as https://www.gov.uk/renting-out-a-property, to ensure you get the most up to date information.

5) Preparing the property

Have you thought about whether you’ll be offering your property furnished or unfurnished? If you do decide to go furnished, make sure the furniture is practical, hard wearing but not too expensive. It’s important to remember that being a landlord is about running a business and any good business should make money. Although you want to attract the best tenants you can, don’t go overboard on the finishings. Carpets are likely to need a good clean, if not be changed between tenants, so make sure you buy one that will withstand a commercial cleaner but don’t bust the bank account in case it does need changing. Most tenants will appreciate a neutral/non offensive colour scheme, by sticking to this, you’ll appeal to more people. Tenants will expect a minimum of an oven in the kitchen, but it may be worth including a fridge/freezer and washing machine to make your property stand out amongst the others.

There’s no doubt that the right property can prove to be a good investment, but it does require a lot of research and it’s a big