Thinking of becoming a landlord? Few things to consider- By Relieve Estates
6th February 2012
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Are you still not sure about the choice you are about to make?

This article would reassure you, basically due to banks reluctance to lending, higher deposit request and volatile interest rates, it has become very difficult for people to step up to the property ladder, this has caused people to rent as an alternative solution.  For more please follow the link below

http://news.lettingweb.com/letting_market/

If you are still reading, maybe you have made up your mind to become a residential landlord.  There are few thinks to consider

  • Are you investing for rental return or capital growth? 

With houses prices falling, stagnating or rising at a very lower rate, it is important to consider rental return, as capital growth can take longer than expected and would not be a safe option in this economic climate

  • Location – where is the property located

The location of your investment is very important.  Despite the fact that it is almost certain that the demand for rental properties would remain high or increase in 2012, they are few things to know and consider

  • University cities are great places to invest for rental properties.  This is not necessarily for the purpose of letting the property to students but because the presence of students in a city or town causes the demand to remain high thus your property is more likely to be occupied or void periods are likely to be reduced compared to ordinary cities without student population
  • A question that needs to be answered is, are you planning to be involved in the day to day running of your investment?  

If yes, it is important to find a property close to your home or at a travel distance, taking care of your tenants can be stressful at the time, things such as sourcing contractors to attend to maintenance issue, collecting the rent or tracing tenants for the rent can be very stressful so it helps to be in a close distance to your properties

  • Choosing the property.

The choice of the property is very important, remember that the whole game is all about having a property that would stand out from the crowd to attract prospective tenants.  Please follow this link for extra tips on how to choose a but to let property http://www.findaproperty.com/displaystory.aspx?edid=00&salerent=0&storyid=24077

  • Finance

How do I finance the property or properties to rent out? 

Options are:

a. Cash payment – this option is available to very few people

        If you have the cash to pay for the property please jump to number 7

b. Mortgage - you are thinking of taking a mortgage

        They are few things to consider before approaching the bank

  • Profile and finance examination 

After examination of your personal finance and you decide to apply for a mortgage, it is important you examine your profile and finance.

Affordability: before applying for a mortgage it is important you compare and contrast all your inflows and outflows to evaluate your residual income.  It is important to factor in all your future expenditures such as, mortgage, holiday, car purchase, birthday, wedding plan, expenditures that would go toward starting a new family, if unsure do not hesitate to approach a financial advisor

Note: It is important not to fall into the misunderstanding that you are less likely to need any extra money as you will, this is because, you do not have a guarantee that your property will be always occupied even if you are planning to purchase an occupied property, the tenant’s circumtance may change which may cause he/she to move out, in which case you will need to pay the mortgage while the property is on the market for a new tenant

You will need to have an idea of your financial profile

This is what all the financial institutions check when deciding to grant you any credit, this also helps them to decide what credit limit you can sustain.   The decision is also base on what credit you are currently repaying.  One of the best shortcut is to join one of the profiling company such as credit expert from Experian which give you 30 days trial period for free, you can cancel your membership before the expiration of the 30 days.  It will enable you to have all the information your mortgage provider would have access to when deciding your mortgage application, the good thing about this is that they give you tips on how to improve your credit score which vary from 0-999, 999 being excellent and would open the door to most credit application according to your circumstance 

  • Choosing a letting agent.

Are you thinking of managing the investment yourself? If you are, you need to be able to attend to your tenants query as soon as possible, if not it is important to get a good letting agent. They are few things to consider when choosing a letting agent to look after your investment.   

One of the most important questions to consider is your own requirement as a landlord, are you looking to find a tenant only or you are looking for an agent to fully managed your property?  The answer to this question would guide you through the choice of your agent

  • Fees and terms 

You need to compare and contrast fees against services.  The key here is to assess whether you are getting value for money.  You can evaluate testimonials but make sure they are real, investigate the letting agent customer service strategy, communication and complaint procedure not only for you as landlord but also for tenants as unhappy tenants are more likely to neglect the property, fall into rent area or simply move out.  

It is your agents responsibility to make sure that your tenants’ needs, concerns and worries are met.  One of the tips is to investigate whether the agency has an emergency line for repairs, maintenance or any emergency issue that need attending to.  Please follow this link for extra tips.

 http://www.whichpropertyagent.co.uk/property-news/ten-top-tips-for-choosing-a-letting-agent-to-manage-a-property-or-let-your-house

 


For extra free advice and tips please do get in contact with Relieve Estates, we’ll do the rest

01204 684072 or read more about us here.

 

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About the Author

Gaynor R

Member since: 10th July 2012

Hi I am Gaynor Ramsden and am passionate about all things Bolton. I hope you enjoy reading my blogs and find them to be interesting and thought provoking. I would love you to add your personal comments...

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