There are many benefits to owning and leasing a residential property and by doing so you can be assured you will be looking at better returns on your investments than playing the stock market. Keeping your money in low interest rate savings accounts can be just as bad.
Your First Buy to Let Property
There are several ways of becoming a landlord. If you are not emotionally attached to your current home, you may be able to move to another one, renting out your existing house. This will give you an advantage by taking out a loan as an owner occupied property while maintaining your existing loan for your new rental house. This scenario gives you the opportunity to get your feet wet without overextending yourself if being a landlord does not suit you. After a test run with your first property, you will know very soon if this business is for you.
If you have an entrepreneurial spirit and enjoy the benefits of property ownership, you are now ready to continue with your investments. Start your search in areas for which you are familiar as you will know what is good buy and what should rent well. Typically properties within walking distance of the train station are great for commuters and properties close to good schools are always appealing to families.
Managing your Property Portfolio
As your property portfolio grows, you may want to consider using the services of an estate agent to manage your properties an tenants. If you decide on outside management, make sure to interview at least three agencies to compare the services on offer and the prices. It is likely you will be quoted a monthly rate as a percentage of income. Read the fine print of the contracts to be certain everything meets your stringent requirements.
If you have more time on your hands you may wish to manage all of your properties yourself. However, if you choose to do this make sure you comply with all of the required landlord regulations. Look at our guides on landlord tenancy protection scheme as well as gas safety certificate, electrical equipment safety regulations and smoke detectors for more information.
Maintain a Good Relationship with Tenants
One of the most important tasks of a landlord is to be polite and compassionate to your tenants’ needs. This is not to suggest that it is okay for them not to pay the rent on time, but merely to keep good tenants. One of the reasons tenants move so often is that they are given a good deal on the rent for the first year of occupancy, then up it goes year after year. It is obvious that some landlords get greedy or there is so much competition in the area that they need to fight for every renter only to lose them after the first year. It takes a lot to keep good tenants as in return they will expect a good landlord, once a tenant leaves you may have to start over repainting, carpeting, etc. If you keep your places in great shape, and be watchful of the rental trends, you can keep a tenant for years.
Above all, remember that this adventure has now become a business, and must be treated objectively with regard to your properties. Like other businesses, however, it is also very personal. If you have the proper financing on your rentals, usually only the taxes and insurances increase, but not the payments. Be fair to the tenants and keep their rents low enough to keep them happy, yet high enough so you are making a decent profit.