Over the last ten years, renting has grown in popularity. As property prices continue to rise, the buy-to-let arena offers lucrative rewards for investors.
The renting market is becoming increasingly crowded as tenants compete for the best apartments for rent. If you’re thinking of dipping your toe in the water and becoming a landlord, consider the following first.
Do Your Research
If you’re new to this market, then do your research first. Look at the advantages and risks of investing and weigh them up. Is the property likely to increase in value over time? If you intend to take out a mortgage, would a future increase put you at risk? How long would it take for the property to pay for itself?
It is also important to research the rental market. What is the rent on other similar properties in the area? Does the property you’re interested in have any advantages?
Some investors purchase run-down properties at low prices and then renovate them to rent. It is worth keeping in mind that investors who do this for a living have contacts within the building industry. They work on multiple properties and can obtain a good price for supplies and services. Would you be able to compete on this level?
Look At Areas
There are lots of questions to ask yourself before investing in property. One of these is which areas look most promising? In the past investors have made a lot of money by keeping abreast of local changes. For example, is a new school opening in the area? Are transport links expanding over the next few years? Is a new resource or amenity opening? All of these things are likely to make the area more appealing and attract renters. Get in early when property prices have not yet risen and enjoy the benefits in the near future.
Shop Around For The Best Mortgage
This sounds like an obvious point, but it’s important. Shop around to get the best mortgage. Don’t just defer to your business bank. Take other options into consideration. An independent broker may be able to offer some advice.
Know Your Responsibilities As A Landlord
For some people buying to let can be seen as a passive investment. However, you have a number of responsibilities as a landlord. You are responsible for the upkeep and maintenance of the property. If something goes wrong with the building, then you will be liable for the cost.
You also bear some responsibility for the safety of the tenants. You will need to ensure that any gas and electricity appliances have been installed correctly. You will also need to maintain them throughout the tenancy.
Smoke and carbon monoxide alarms will need to be fitted, and you will need to adhere to the building’s fire safety regulations, if applicable.
The property will need to be inspected to ensure that it is safe and free from hazards.
Being a landlord brings with it continued responsibilities. Using a letting agent can help with some of these. However, you will still need to factor ongoing costs into your budget.
Many people throughout the world are benefitting from the buy-to-let market. Wise investments, good financing, and fair terms can all bring about lucrative returns.