Everyone has dreamt of being able to do it. For many, it is part of their retirement plan; buying a property or two, renting them out for a sum that will cover both the mortgage and running costs, all while you sit back and watch the price of your property inflate. What better way is there to enjoy a fruitful retirement?
What’s more, thanks to low-interest rates, a booming property market and an ever-growing pool of tenants, now is a great time to invest. However, it is no walk in the park. Running a buy-to-let business has plenty of challenges.
Read on for some top tips on being a successful landlord:
1. Research The Market
If you are new to this area of investment then make sure you do all the research you can, and not just the property market; there may be better alternatives to investing your money. We suggest going to the experts for advice, someone who has experience in dealing with a wide range of investment opportunities, such as Enness Private Clients. It may be that a high-interest rate savings account would better suit your needs, or the return from an income-based investment fund; something that isn’t attached to the same risk as property and doesn’t tie up a lot of capital.
2. Hire The Right Agent
If you decide property is the route you want to go down, make sure you get yourself a good agent. A good agent will be able to talk you through the steps, from the rules and regulations, you must follow to the setting up your tenancy. They will also ensure all potential tenants have good a credit history and suitable references. They will also be able to consolidate all the necessary paperwork, albeit at a cost. Just make sure they are registered with the Association of Residential Letting Agents.
3. Negotiate Fees
There are a lot of fees you will have to consider, all of which will add to the running costs of a property. But as a rule of thumb, agents will typically expect to be paid ten per cent for finding you a tenant and twenty per cent for managing your property, which will include everyday maintenance. However, you mustn’t be scared to negotiate these percentages at the beginning and to find out what hidden costs there may be, such as renewal costs.
The only way you will get a good night sleep after a tenant moves in, is if you have landlord insurance in place, one that includes public liability cover. This will cover any damage, as well as any accident or break-in.
Most of the time being a landlord will consist of radio silence. But be prepared for that dreaded call whereby you found a pipe has burst and water is cascading into the property below, or a tenant has lost their keys or thinks they have carbon monoxide poisoning. These things happen, and you need to be prepared to drop everything to sort it out. Being a landlord is not just a matter of receiving payment at the end of the month, it is hard work too.