However, owning and letting property is a huge responsibility, and landlords need to enter the market for the right reasons. Landlords also have to be fully informed as to what the role entails and what challenges they may face. If you are keen to get started as a landlord, Holmes Estate Agents s here to assist you.
Know the reasons you want to become a landlord
Given that there will be many days when you question why you became a landlord, it is helpful to know the reasons you want to become a landlord. Existing landlords cite various reasons as to why the enter the market including supplementing their current income, developing a new career, developing a pension fund or savings for later and to invest in property.
When you have a defined goal in mind, it becomes easier to work towards it, even when you face difficult times. Knowing the reasons you want to become a landlord will stand you in good stead throughout the process.
Review the market
When you start the process of becoming a landlord, it is vital you review the market. Some landlords choose to buy property local to them, making it easier for them to be hands-on with the property. Other landlords invest in an area where they believe the rental yield is attractive.
Make sure you have defined goals in mind, and then review property in the areas that appeal to you. You should also think about what type of tenant you want living in your property. The choice of home and location favoured by young professionals and students is very different from the areas and property types preferred by families.
All these factors will influence where you should buy property, but you also need to think about your budget and finance too.
Ensure your finances are in good order
Landlords face more stringent criteria in obtaining a buy-to-let mortgage than property buyers do in getting a lease for a home where they wish to live Landlords have to pay a larger deposit, their finances are reviewed more rigorously, and landlords must show they expect to generate profit from the rental property, and their entire property portfolio.
Landlords are recommended to strengthen their finances and their credit score as best they can before they apply for an investors mortgage.
Take care of legal and tax duties
Landlords must inform HMRC of their new role and register for self-assessment tax returns. At this stage, landlords should speak with professionals who dealt with this process to ensure that they are fully informed.
The tax situation for landlords has changed in recent times, so make sure that the guidance you receive is up to date.
Other factors to consider
There are many other factors that landlords should consider, including:
· Should be the property be let furnished or unfurnished?
· Will pets be allowed in the rental property?
· Will utility bills be included in the monthly rental fee?
Your answer to these questions will impact on the tenants who wish to stay in your property, and it may influence the revenue you can make as a landlord.
Don’t forget additional costs
While obtaining a mortgage is the leading financial barrier for landlords, it is crucial for landlords understand that there are many other costs associated with being a landlord. Landlords must allow for repair and maintenance costs, insurance costs and if the property lies empty, can the landlord afford to generate no income?
These are issues that a new landlord must consider. It is essential that landlords obtain help from professionals. While some landlords will carry out repair work themselves, it is often best to leave it to the experts. When you are dealing with gas or electrical components, you need to employ a qualified professional rather than carrying out the work yourself.
Similarly, if you turn to a property management company or you need help from a skilled estate agent, it is best to call on a local professional for assistance. If you want to get started as a landlord, contact Holmes Estate Agents, and we will be more than happy to help you out.