Get Ready To Get Dirty
While the traditional option for most landlords is to 'hire someone in' to fix things up or renovate a property ready for renting - you should stop and think to yourself - am I willing to get dirty? If you are handy with a hammer or nifty with a nail gun, consider doing DIY jobs around your property to reduce your expenses. If have building skills, you can buy houses or flats very cheap and fix them up yourself - making them the perfect investment and use of your skills.
Run Your Property Like A Business
In the modern market there are a lot of people buying second homes to rent out and suddenly finding themselves with no disposable income, and worse not making any money from their property. In order to make the most of your investment, you should try and view it as a business. Before you buy, analyse whether there is money to be made in the market, what average rental prices are and how much you would have to spend on upkeep and maintenance over the rental period. If you can still make money considering all of these things - then investment in property is the right move.
As a landlord, you are required by law to get insurance. But instead of your standard house insurance, landlord insurance covers you against specific things. As well as buildings and contents insurance, landlords also need extra cover for things like:
- Non payment of rent
- Damage to your property caused by the tenant
- Loss of earnings or rehousing costs if your tenants have to move out following an insured incident (like flooding or fire)
- Liability for accidents in your property causing injury
Location, Location, Location
If you plan on being the hands on kind of landlord - or even if you don't, the location of your property is key to your success. Choose an area that it's easy to commute to, and make sure you investigate the local area before you buy. If your property is in an area where unemployment is quite high, you are going to have trouble getting tenants into your property. If you understand the area - if it's a university town, a commuter village or a spot in the middle of nowhere - you have a better idea of how easy it will be to take care of, how much you can charge for rent and how easy it will be to get occupants.
Managing The Property
If you are looking to become a landlord to make some extra cash on the side, then maintaining and managing your property can become very time consuming. Unless you plan on living in the building or making a career out of being a landlord, you should consider hiring a property manager. A property manager will typically charge you 8-10% of the monthly rent, and they will conduct regular inspections, find and vet prospective tenants, collect rent and deal with any issues you or your tenants might have.
For more advice on becoming a landlord, or for legal advice in times of trouble, get in touch for a consultation and some free, impartial advice.