The rental market is stronger than ever at the moment as it takes advantage of the weak buying market. With people either unable to afford their own home or home owners reluctant to settle for a lower value when selling, it really is a landlords market at the right now. If you’re thinking of letting out your property, here are 5 things you need to consider.
Employing A Management Agency?
The first thing you need to think about if you’re going to be a landlord is how hands on you want to be? The cheaper option is to manage everything yourself but there’s no guarantee how time consuming this can be. If you’re not living near your property this can be a nightmare (can you really sort a dispute with the neighbours or deal with a burst pipe across the other side of the country?). Employing someone to manage everything for you is going to eat away at any profits you might earn but if you’re only letting it our while the economy stabilises (rather than as a business venture) is this really going to be a problem?
Financial Planning
Letting out our property involves more than just sitting back and watching the rent roll in. Even if you’re not going to employ a management company there are still lots of other financial implications to consider. Landlords insurance is essential as your regular household insurance might not cover you if the status changes from occupiers to tenant. You also need to consider what you’ll do if you find your property is left empty more than a few weeks. Many landlords insurance providers will offer this as an extra but can you afford to cover the mortgage payments if you struggle finding the right tenants for a few months?
Right Target Audience
Like selling any product you need to know who your target audience is. If you’re letting your family home out because now isn’t the right time to put it on the market then you’re probably going to be looking for a family to rent it. Basic safety features and a well presented house will attract the right kind of tenant here. Things like making sure any water (ponds, pools etc.) in the back garden are fenced off, stair gates either installed or allowing permission for them to be installed will attract families. If you’re renting your property just to get some cash in and you don’t have the time or money to invest in it, you’ll need to consider letting it out to younger tenants or even students. If you go through a local university you’ll at least have the peace of mind of having someone to back you up if they do too much damage.
Finding The Right Tenants
Finding the perfect tenants could be as simple as putting a free ad on Gumtree.com or you might find it easier to pay the estate agent fees and let them deal with everything. Whether you’re letting out one room at a time or a whole house it’s recommended you check references (both from previous landlords and current employers to check they can afford to pay the rent). If you are letting out each room individually it’s recommended you let the tenants have a say in who gets the rooms, tenants who are happy with their flatmates are more likely to stick around.
Contract
It’s vital both for you and your tenants you have a legal contract drawn up. You need to go through a certified solicitor to ensure this is done properly. If you don’t’ offer a contract you will discourage some renters and those who are happy to take a property without a contract can end up damaging your property, running off without paying rent or simply not paying at all. It’s always recommended you have a contract but if you’re going to use a letting agency they’ll be able to take care of this for you.
landlordsinsurance.org.uk are always happy to talk to any landlords looking to rent out their property for the first time.