We have all seen programs on television. A couple purchases a property which requires a lot of work, they miraculously improve every aspect and make thousands on the subsequent sale of the house. What about if the idea of buying property appeals to you, but you would prefer to keep it and rent it out? If that sounds more up your street, continue reading for our five top tips.
1. Understand the Decision
Buying a property in itself can be a stressful endeavor. Choosing to purchase a house to let is another level completely. It is not as simple as television programs make it seem and, although can be a sound investment, you have to be prepared for things not always going to plan.
Being a landlord requires a lot of things. Ensuring the property is kept to a decent standard of repair is essential, as is ensuring that things are fixed within a sensible period of time if deemed your responsibility. You also need to consider a variety of other things including how you will hold the deposit from your tenants, how they will pay you and safety checks that you need to ensure are carried out annually.
2. Finances
Being certain that you can afford to enter into the buy to let a game with regard to funding is vital. Of course, you will have calculated that you can afford the deposit and any legal costs associated with the purchase of the property, but have you considered what will happen if the tenants do not pay their rent for several months and you are embroiled in a legal battle? Perhaps the tenants move out and you do not find replacements for a while.
Can you afford to cover the cost of the mortgage each month? Of course, you may be able to buy the property outright. In which case, these considerations are less of an issue. Ensuring you have contracts drawn up between the tenants and yourself, attested by a legal professional, is imperative.
The price at which you rent the property is another consideration. Do your research prior to marketing it to ensure you are on the right track. Seeing what other landlords charge their tenants for similar sized and quality properties is a great idea.
3. Choose Wisely
It is really easy to get carried away when you are viewing the property, whether online or via broker websites. You start to imagine what each room will look like and calculate how much work is needed. However, do bear in mind that it is not always that easy. Many times, a property looks sound, but underneath, it has lots of structural work that needs doing.
Having a survey carried out prior to purchase is recommended to unearth any potential financial pitfalls or disasters. As well as the property itself, be sure to check out the neighborhood itself. Is it a place into which people would want to move? If you are feeling dubious yourself and not keen on leaving your car outside it while you view the place, the chances are that this is not the property you should buy.
4. Preparing the Property
Most properties are rented without furniture included. The exception is for short-term lets where the tenant may be only temporarily living in the area or country even. In those circumstances, the property being furnished offers a huge advantage as it would be pointless buying everything for a short period of time. Essentially, the decision as to whether or not you will rent out the accommodation fully furnished or as a blank canvas depends entirely on the tenants you are expecting and the area in which the property is located.
Furniture aside, it is vital that your property is finished to a decent standard. Most tenants do not expect to have to decorate upon moving in. In fact, ensuring that the walls look fresh and the carpets or flooring looks clean and tidy is a must.
5. Know the Ideal Tenant
It is ultimately your decision who you choose to rent out your property, but in advance, it is vital that you consider exactly who is the target market. If you live close to a university, a student let is a possibility. For that, there are extra considerations with regard to the previous point as each room will need to have certain facilities. Furthermore, the rent is likely only to come in several months of the year rather than the whole year-round. If you live in a more affluent area, you may be hoping to attract a professional couple or family. Knowing exactly who your ideal tenant is will influence all the decisions you make during this buy to let journey.
