Being a landlord isn’t always easy, especially as a first time buy-to-let owner. This undertaking is a big responsibility, and it requires a lot of commitment and knowledge.
However, as you might already suspect, being a landlord comes with lots of benefits, primarily generating a passive and stable monthly income.
It is the habits you form at the start of this new venture that can establish how much time, money, and frustration you are spared in your career as a landlord. To make the beginnings easier for you, here’s a list of best tips for new landlords to help you start off on the right foot.
1. Learn about the market
One way to avoid any unpredicted stressful situations when purchasing a property is by doing your research. By gaining knowledge about the rental market in your desired area of purchase, you can optimise your return on your investment. Find out who your competitors are, how much they charge, and what amenities tenants desire.
2. Choose the right rental price
There is a golden rule in the buy-to-let community when it comes to choosing the right rental price. Stick to the mean. Once again research what similar property types in the same area are charging for rent and use that average. Make sure to not put your price tag too low,even if you are trying to rent as soon as possible. Similarly don’t make the rental price too high and set unrealistic goals for yourself.
3. Plan for hidden costs
It can be easy to forget that as a landlord you are technically running a business. It is crucial to realize that there will be overhead costs such as taxes. Remember that rent payments are considered a form of income and what you spend to maintain the property is considered an expense. We suggest consulting a tax advisor before making the jump into becoming a landlord. This will help you understand what to expect on your relevant taxes.
To find out about additional hidden costs that go hand in hand with buy-to-lets read our previous blog post about the 5 buy-to-let costs you need to know about. We cover the tenants fees act, mortgages, income tax, legal fees, and maintenance costs.
4. Know the relevant laws
When purchasing a buy-to-let it is valuable to educate yourself on the relevant laws that go with this investment. For example you will be required to apply for a certificate of occupancy in the area of your purchase. When applying for this certificate you are often given a type of crash course on the housing laws and rights of your tenants. As the landlord it is now your responsibility to understand the laws and regulations of your property and of the prospective tenants.
5. Choose your tenants wisely
Don’t rush into renting your property to the first person that puts in an offer. Do your background and credit checks on any prospective tenants first. It has become common practice to do tenant screening to better understand what type of person will be living in your property. This screening will not only show you if there has been any untoward behavior as well as how financially responsible your potential tenant is.
Also, ask your questions. Take time during the vetting process to understand your potential tenant. Why did they decide to move out from the previous apartment? Why did they like your property? Listen to the tenant screening and your gut! It will save you time and trouble in the future and could result in long and successful cooperation.
As we have mentioned, being a landlord can be a stressful undertaking. However, here at London Shared we take away that stress and make your landlord journey just that much easier. We are a dedicated property management company that guarantees your rent, finds you tenants and even furnishes your property. To find out more about our services visit our official site: https://www.londonshared.co.uk