Having your own property to look after is one thing, but so many people decide to expand on their property journey. Renovating homes, perhaps even building one themselves to live in. But others decide to go down a different route entirely and look to creating their very own property portfolio, which often includes things like apartment blocks or other properties that are rented out. However, as a private landlord, you have rules and regulations you need to follow, not to mention other aspects that you may need to undertake. So if a property portfolio is an option you are considering for the future, then this guide will help you with everything you need to know about being a private landlord.
Do you have the right funding in placed? One of the first things to consider is the type of funding you have in place for the property. You may already own it and have just decided to rent it out, or it could be a fresh purchase. Whatever the situation make sure you seek some advice from a financial advisor to ensure the best route to go down. Some banks insist you have a specific type of mortgage because of your intention with the property. In some cases, this may require you to put more money down in the form of deposit, and/or pay additional fees for getting the funding in place. However, it is best to be completely transparent with your finances and discuss it directly to ensure that you get the best deal at the lowest possible price.
Have you considered additional insurance policies? When it comes to allowing a property to be rented, the control in which the property is lived in is out of your hands to some degree. This means that you may want to consider additional insurance policies to cover every eventuality. Most people will always have some form of buildings insurance on their homes to cover things like fire and weather damage. However, it may be worth considering increasing the premium to ensure that you can cover any accidental damage as well. This protects your asset, so it is well worth the extra money.
Have you run all the numbers correctly? Another thing to consider would be ensuring that you have budgeted for every aspect. It’s all well and good looking at the rental payment you receive versus the mortgage payment you send, but this isn’t a true reflection. There are other factors a landlord needs to consider. For example, you need to ensure that you have costed in any agency fees for handling some of the hard work for you on a month to month basis. There are the additional insurances to consider and the point of putting some money away each month from the rent for any “just incase moments” such as an oven breaking, a burst water pipe, or the electrics failing. Anything that fails in the property or needs repairing is down to you, the landlord, as you own the property. So sometimes it may not seem as beneficial or as worthwhile as you hoped. However, it isn’t just about the monthly gain, you also need to think of the long-term investment and often property will only increase in value over time. Making it very lucrative in the long run.
Making sure the home is up to a high standard When you first buy the property or even decide to rent it out, you need to ensure that the property has been renovated and is up to standard. It isn’t just about the cosmetic side of things, although that is something you need to think about before renting. It is more to do with the property condition, whether it is livable, and if there are any maintenance issues that need to be addressed before someone takes residence. Issues like mold, for example, can be very problematic if not sorted from the moment you notice there is an issue. Mold can cause health issues when people are living in those sorts of environments. Thankfully, websites like http://www.schemel-tarrillion.com/remediation/mold/ can provide you with a lot of information on what to do if you find yourself in this situation. Cosmetically, it’s always in your best interest to ensure that the property looks good and appears clean. It will always help you maximize the monthly rental and obtain decent tenants who want to care for the property while they live in it. There can be a lot of competition for decent rentals.
Property maintenance We have already mentioned earlier, but there is the property maintenance to consider as someone lives in the property, and for the duration of your ownership. From small matters such as walls needing plastering or repainting, to bigger things like wall or building damage. Even any appliances that you supply such as the oven, fridge, washing machine, will all be your responsibility should they break down, need fixing or replacing. Websites like https://www.thebalance.com/maintain-real-estate-rental can prove useful.
What sort of tenants do you want? Another consideration would be the type of tenants you want to attract for renting out your property. Will you accept pets or children? Will you be open-minded to people who seek help from the state? Or do you prefer to only rent out to private individuals that can supply a decent credit history and a good employment history? All of which are factors to consider and something any agency will discuss with you moving forward.
Taking precautions and ensuring timely payment Finally, often it can be hard to manage rental properties yourself, and this is when it’s worth paying out agency fees for someone to handle it for you. They normally take care of any pre-agreement checks such as credit or employment. They can also guarantee a rental income, even if the tenant hasn’t paid. This normally means that you receive less than the advertised rate of rent, but can take a lot of the pressure and stress away by having someone who can handle the hard graft for you.
I hope this has made you more aware of what to think about if you want to rent out properties in the future.