If you’re looking for a long term, solid investment then property is the way to go. Bricks and mortar tend to accumulate in value each year and are always in high demand, and so purchasing a place to rent out can be very lucrative. In the beginning, a buy to let mortgage means that your tenant’s rent money essentially pays off your mortgage. Once it’s all paid off, it’s all profits from there. It’s a property you can continue to rent throughout retirement, or you can sell it for instant cash. But there are a number of things to consider before going into the business. Here are just a few of them.
Finding the right property
The right property mainly depends on the type of tenants you want. Do you want quiet, working professionals? Apartments or small homes close to towns and cities are a good bet. Would you prefer to rent to families? Choose more spacious properties with a garden, away from busy roads but close to schools and parks. Do you want to tap into the student market?
Larger homes with lots of rooms that can be split up and let separately would be your best bet. There are pros and cons to all kinds of tenants. The student market is lucrative and you can earn a lot more by charging for individual rooms, but you have to re-advertise and find new tenants every year, or
They’re also likely to see and treat the property as their home, meaning they respect and look after it. However, children and pets again can be
Health and safety
As a landlord, you’re responsible for the health and safety of your tenants. You need a gas and electricity safety check done each year, including PAT testing if your property comes with any electrical appliances. You need to ensure that there’s a smoke alarm on each floor, it’s worth fitting a carbon monoxide alarm too. If your home is set up as a HMO (house of multiple occupancy) it has even more specific rules to follow- rooms have to be a certain size and you need to have fire escapes and doors fitted.
To work with an agency- or not?
An agency can make life so much easier as a property landlord. They will deal with finding and background checking tenants. They will chase up late rent, and are a point of contact so you don’t have tenants contacting you directly about the smallest of things. If you own a number of properties or are a landlord as well as having a full time job then this can be helpful. However, there will be fees to pay which can cut into your profits. If this is your full time job or you want to save money you can choose to manage things yourself.
- This post has been written by an outside source – See disclosure policy