If you decide to buy a property to let out there are certain things you need to think about before you become a landlord.
Before you pick your property think about the type of tenants you want to attract. If you want students then you should be looking for a property close to, or within travelling distance of a university or college, If you would prefer a young family then make sure you are near to schools and local shops. If you decide you want young professionals as tenants then your property should be within easy reach of public transport.
Look out for places with gardens, garages or parking spaces as this will make your property more desirable. If you decide to buy somewhere that needs doing up, don’t forget that during the period the work is being done you won’t be making any money, but you will be paying the mortgage and any insurance costs. Have a good look around each area and pick one that will attract the type of tenants you want for your property.
Not only will you need enough to pay the mortgage, and taking one out will incur fees, but you’ll also have landlord’s insurance to pay as well as the letting agent’s costs. There is also tax and in some cases, National Insurance.
In order to maintain the property, you will have to put some money away on a regular basis and you should also think ahead to when you might need to carry out some refurbishments or replace a boiler. It’s usual to take the amount of the rental and then add on around 25% to cover expenses.
As a landlord, you have certain responsibilities to your tenants which include safety and keeping the property in good repair. Any gas and electric appliances must be installed properly. You must supply your tenant with an Energy Performance Certificate and smoke alarms must be installed as well as carbon monoxide alarms if necessary.
When you take a deposit from a tenant it must be paid into a Tenancy Deposit Protection Scheme which is approved by the government. You can see the schemes available here.
Keeping your property in good repair, will not only protect its value, but it will also ensure that should the council decide to do an HHSRS (The Housing Health and Safety Rating System) check, you won’t have problems.
Buy to let is still a good way to invest your money, especially when interest rates are low. Talk to your local estate agent if you are thinking about becoming a landlord because they can offer you help and advice as well as guidance when choosing a property to let out.