With a prominent level of demand for rental property, it is easy to see why some people want to be a landlord. Being a landlord is a fantastic way to generate income and safeguard your future, but there are many challenges in the role.
If you are currently considering becoming a landlord, here are some of the critical things you need to know before becoming a landlord.
Recognise there is a sizable time and financial commitment for landlords
If you want to be hands-on a landlord, it will take a lot of your time.
Whether you are a hands-on or hands-off landlord, buying a property and maintaining the rental accommodation costs a lot of money. Therefore, even if you use the services of a property management company, you should expect to spend time and money in the role of a landlord.
If you are committed to the process and determined to make the most of the opportunity, there is no reason you cannot achieve success as a landlord. However, if you want to become a landlord as you think it provides easy profits, you may be in for a nasty surprise.
Speak to a rental market expert in your area
Even if you have lived in the area you buy property in; you may not know what the area offers for the rental market. It is best to speak with a letting agent or rental specialist in your area to determine what the area has to offer, and how you can provide the best service for tenants in the area.
You should consider rental yields, the sort of tenants you wish to let to and what they look for, and what properties are available in your budget. It is helpful to carry out as much research as you can before you commit to being a landlord, and a local expert will help you make an informed decision.
Have a plan to maintain the property
Landlords have legal responsibilities to maintain and repair the rental property. If you have a lot of spare time, and you have DIY skills, you may be able to do a lot of the repair work yourselves. However, if you are short on time, or you have no DIY skills, you need to call on an expert.
Some work needs to be carried out by qualified professionals, such as gas or electrical work, but in many cases, it is best to call on an expert. Hiring a professional saves you time, but it also provides you with confidence concerning the quality of work.
Therefore, you should set aside money for repair work, as this will make your life easier. Also, unexpected problems often need to be resolved quickly and can be expensive. If you can place money aside to cover emergency repair work, you’ll provide tenants with a better service.
Know the importance of vetting tenants
One of the most critical tasks a landlord has is finding the right tenant. Therefore, you need to vet tenants to ensure they have funds to pay rent each month, and that they will take good care of your tenants. To vet a tenant, you should review their credit history, obtain bank statements or payslips, and if possible, get a reference from a former landlord.
Not everyone is comfortable vetting prospective tenants, but it is essential. Therefore, if you are uncomfortable with this process, hire the services of an expert who will do this job for you.
Know how you will collect rent
If you aren’t collecting rent, you won’t succeed as a landlord. Therefore, you need to know how you will receive rent. Not everyone is comfortable in collecting money from people. You can consider digital options, collecting money without meeting the tenant in person, or you can use an agent to receive your money for you.
Before you commit to being a landlord, you must consider the critical aspects of the role and the steps that will help you achieve success. If you need guidance on becoming a landlord, please contact Nationwide Accommodation Services Ltd, and we will be happy to help you.