Becoming a landlord is a rewarding and profitable endeavor. However, before you take the leap and start renting out your property, there are some things to consider.
Things to consider before becoming a landlord
Becoming a landlord can be both an exciting and daunting prospect, and a decision you need to research and prepare for thoroughly.
That said, the private rental sector is continuing to grow as first-time buyers struggle to get on the property ladder.
Here’s some advice on what you need to consider when becoming a landlord from a Property management software company.
Understand the costs involved
You might have bought a buy to let property or decided to rent out an existing property. With a buy to let investment, you have to take into account that the property’s value may increase or decrease over time and you will take on that risk as a buy to let landlord.
Some expenses you’ll need to take into account as a landlord include stamp duty, the cost of valuation and having a property survey conducted, legal costs, mortgage arrangement fees, property management fees if you’re using a lettings agent, and of course paying income tax on your rental income.
Marketing your property
Advertising your rental property is an important step in the rental process, but where you advertise your property can be just as important. Here are a few things to consider when finding a suitable place to list your rental:
Online Listing Websites: Online listing websites, such as rentola.co.uk, are a popular way to advertise your property. These websites allow you to reach a large audience of potential tenants and provide tools to help you manage your rental listing.
Social Media: Social media platforms, such as Facebook and Instagram, can also be used to advertise your rental property. Consider creating a social media account specifically for your rental property and use it to post updates and share photos.
Local Newspapers: Local newspapers and classified ads can still be an effective way to advertise your rental property. Consider placing an ad in the classified section of your local newspaper or in a community-focused publication.
Property Management Websites: Property management websites can be a good resource for landlords. Such websites offer a variety of services, including marketing, tenant screening, and property management.
Word of Mouth: Word of mouth can be a powerful tool in finding a suitable tenant. Consider asking friends, family, and neighbors if they know of anyone who is looking for a rental property.
Professional Property Management Companies: If you don't have the time or experience to manage your rental property yourself, consider working with a professional property management company. These companies can handle all aspects of rental management, including marketing, tenant screening, and property maintenance.
By considering these options and choosing the right place to list your rental, you can increase your chances of finding the right tenant for your property.
Determine the state of your property
Conduct a thorough audit of your property to determine what condition it’s in and what repairs and decorating you’ll need to do prior to tenants moving in. Don't make the landlord mistake of biting off more than you can chew when it comes to buying a new property and it needing updating.
Think about whether you’ll provide furniture or white goods, and, if redecorating, what colour scheme will most appeal to potential tenants.
You’ll need to ensure that any essential repairs are done before tenants move in, and bear in mind that, as the landlord, you are responsible for most repairs to the exterior and structure of a property during a tenancy.
If you include white goods and furniture, then you’ll also be responsible for repairs to these too. By using a letting agent you may have the option to use their in-house property maintenance services, potentially for an additional fee.
Learn the legalities
As a landlord you are required to fulfil a number of legal obligations, including making sure the property meets safety standards (including ensuring smoke alarms are installed on each floor), and comes with an Energy Performance Certificate and Gas Safety Certificate if applicable, as well as ensuring all the electrics are safe.
You’ll have to conduct Right to Rent Check on tenants (unless you’re letting through a lettings agent), and make sure the tenants’ deposit is protected with a UK government-approved deposit protection scheme.
You must also make sure to allow your tenants quiet enjoyment of the property and to give due notice when you need to access it for any reason.
Ultimately, as a new landlord especially, it is probably wise to use the services of a lettings agent who will know all the ins and outs of the lettings market and will take much of the day-to-day running off your hands, so you can relax and enjoy your investment.
These are some of the tips to consider when becoming a landlord, and if you prepare properly it can be a successful venture for both you and your tenants.