How to be a successful landlord
Investing in a property is not a decision that should be taken lightly. Many people go down this path as a means of making money, but it’s important to go into the business with your eyes open and not just simply focusing on the financial gains that can be associated with it. The main thing
to bear in mind is your objectives. If your objectives are clear from the start, then you’re more likely to get what you want out of your investment.
So, how can you be the most successful landlord?
Plan your finances
Know from the offset what your financial intentions are. Will the money be used as
your regular income or will it be set aside as capital growth?
Do your research
With over 160 laws around buy-to-let, realistically, you’re never going to remember each and every one of these. You might want to appoint a letting agent who will know more about these rules and regulations, but we still recommend you take the time to learn the main ones in order to maintain the safety of your tenants.
Speak to a mortgage adviser and an accountant to better understand your financial situation and what your options are.
The property investment market can fluctuate, depending on the economic state at any given time, so it’s crucial to speak with a mortgage adviser in order to protect your finances and insure your property, should the market take a turn for the worst.
This is probably the last thing you’re thinking about right now, but it’s important to consider your exit from the buy-to-let market, just as much as your entrance to it. Having a clear exit plan will also help you settle your finances in the most tax efficient way possible.
In contrast, there are certain things you should always avoid, as a landlord:
• Seeing a property and diving straight into buying it with no wider consideration of the buy-to-let market. This includes not seeking the right mortgage advice, and therefore not understanding the implications of tax and other costs involved with renting out a property - not to mention the responsibility that comes hand in hand with being a landlord.
• Not protecting your property or your finances against the worst-case scenario, should anything happen.
• Not keeping up with the buy-to-let laws and regulations e.g. health and safety, and therefore not protecting your tenants.
• Not understanding exactly what being a landlord entails e.g. keeping the property in good condition, looking after your tenants needs and dealing with paperwork accordingly.
For those of you who have stumbled into the buy-to-let market unintentionally, you might want to read our accidental landlord article which gives a simple overview of how to manage your property and tenants.
Because we play by the book we want to tell you that…
Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances.
The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.