The Successes and Failures of Being a Landlord
Investing in a property is not a decision that should be taken lightly. Many people are tempted down this path as a means of making money, but it’s important to go into this business with your eyes open and not just simply focusing on the financial gains that are associated with it.
The main thing to bear in mind is knowing your objectives. If your objectives are clear from the start, then you’re more likely to get what you want out of your investment.
The question we’re going to look at in this article is how do some landlords succeed whilst others fail?
How to succeed
- 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?
- Having knowledge of the 160+ laws and 400 rules and regulations that dictate how you can legally rent out property. This is very important as it determines the safety of your tenants and keeps you out of trouble, in terms of avoiding fines and bans from the letting market.
- Speak to a financial adviser to better understand your financial situation and what your options are, including what the tax implications could be.
- The property investment market can fluctuate, depending on the economic state at any given time, so it’s crucial to speak with the right experts in order to protect your finances and insure your property, should the market take a turn for the worse.
- 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.
What failures to avoid
- 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 financial 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.
- If you’d like to speak to a buy-to-let specialist adviser, please contact us today and we can arrange an appointment at a convenient time for you, whether face to face or over the phone.
For those of you who have stumbled into the buy-to-let market unintentionally, you might want to read our accidental landlord blog which gives a simple overview of how to manage your property and tenants.