Making sure you are financially ready to run and own a Buy to Let property seems obvious to many. However, a surprising amount of people choose to be a landlord without fully understanding the financial implications. Keep in mind maintenance and refurbishment costs, letting agent’s fees, insurance and tax before you decide to take the leap and purchase a property.
It is important to treat purchasing a btl property as a business venture. Think about the needs of possible tenants; what will make a property stand out from the competition? Consider location, accessibility to public transport, and parking provisions. Remember, parking is a draw for potential renters and can be a major factor when it comes to the profitability of your buy-to-let investment.
Once you have set your sights on a potential location, it is important to research the area. Compare existing rental prices on the current market with your mortgage costs. Make sure that the investment is the best business choice for you.
A clear understanding of your legal responsibilities as a landlord is vital. As a landlord, you have a legal obligation to provide your tenants with a safe place to live. Meeting all health and safety standards is crucial, as is making sure smoke alarms are installed and in working order. You must also ensure there is clean running water, and provide tenants with detailed information such as Gas Safety and Energy Performance certificates.
It is important to cater to your tenant’s needs, however, when it comes to it, they are going to be living in your home. Be specific as to what you are looking for in a tenant before you advertise your property.
Once you have purchased that dream btl property and found the perfect tenants, the work of a real landlord begins. And it is not always easy! Many people love the full-time responsibility that the investment can bring. Being on-hand 24/7 to answer tenants’ questions or complaints, to dealing with repairs, are just a few jobs that are part of your role. It is important to be realistic with the time you can dedicate to your buy to let home and tenants. Like any customer-facing job, tenants deserve the best service in exchange for the rental income they are providing you with.
If you decide that the full-time landlord life does not fit around your schedule, hiring an agency to take over the management of your buy-to-let can be a great way to keep your property running and your tenants happy. However, as with any service, agencies don’t come without a fee and this is on average between 10-20% of the rental income. If you do want to employ an agency, it is important to factor this fee into the financial planning phase of your Buy to Let journey to ensure that it is a profitable business venture.Back to news