Becoming a landlord is an exciting adventure filled with the promise of passive income, becoming your own boss and investing in something tangible that you can see grow before your eyes. Having originally started our own property journey as an estate agent, Residential Estates has over twenty-six years of experience guiding landlords throughout this journey. We can help you navigate the potential pitfalls of the rental market and maximise your potential income.
It is becoming exceedingly clear that private renting is becoming the norm as buying a property has become less affordable, especially for twenty- to thirty-nine-year olds, who are becoming more commonly known as Generation Rent. The UK rental sector doubled in size between 2001 and 2014, growing from 2.3 million to 5.4 million privately rented households, and this trend is predicted to continue. Further information can be found by reading reports published by PricewaterhouseCoopers UK that examined the effects of the housing market on Generation Rent and their predictions for the future. As a result, now is arguably a great time to finally take the plunge and become a landlord.
A great place to start is to consider the objectives you would like to achieve as a landlord and how much time you can dedicate to managing your investment. Factors including the type of property you want to invest in and how long you want to hold on to it for, as well as the level of management you are willing to provide, will help decide what path to take. Investing in several smaller properties can reduce the risk to your investment but isn’t as convenient as having all tenants under one roof within a larger development. You could save costs by being more hands-on, but are you willing to answer the phone in the middle of the night if a pipe has burst?
Location, Location, Location
After establishing your objectives, the next step to consider is location. This will be partly influenced by your level of involvement in managing the property as you won’t want to face extensive travelling whenever there is an issue.
One benefit of looking further afield is that you can invest in specific locations that have tried and tested popularity like the Northern Quarter in Manchester, or even open yourself up to up-and-coming areas that are showing great potential for growth such as Digbeth in Birmingham.
Finding the Right Tenants
Once you have finalised the location of your investment, you will need to ensure that your property ticks all the correct boxes for your desired type of tenant. Students will demand excellent Wi-Fi, somewhere comfortable and quiet to study and somewhere else to socialise with friends. If your target is young families however, versatile living spaces, proximity to schools and available outdoor space become the selling features to focus on as a landlord.
How you advertise a vacant property and select the right tenant requires a specific skill set. We help many landlords match the right tenant with the correct property as getting it wrong can be a recipe for disaster down the line. Are you experienced in reference checks, creating a professional relationship with tenants and deciding on tenant suitability? If not, outsourcing the management of your rental portfolio to experts you can trust will save stress.
As a landlord, the most important criteria that you will be required to meet concerns the features designed to make your property as safe as possible for tenants. This goes beyond simply installing a fire alarm, and you will need to ensure you are fully compliant with regulations which are continually updated. Depending on your confidence in this area, this could be another deciding factor on whether you outsource management.
The Important Stuff
A quick look at the HMRC website will show you a whole host of things you need to do before becoming a landlord. To begin with, you must check that a tenant can legally rent your residential property in England and you must place your tenants’ deposit in a tenancy deposit protection (TDP) scheme if an assured shorthold tenancy started after 6 April 2007.
You will also need to ensure that you have a method to record your expenses and rental receipts in a way that will be easy to report to HMRC for tax liability purposes. The rules are changing all the time but you can find out more about landlord taxation on the gov.uk website here.
Still with Us?
If you read this far, great! Don’t let the complexities of the rental market put you off becoming a landlord, as the rewards can be great once you have established the important details. As mentioned throughout the article, one method that some landlords decide to pursue is to outsource the management of their property to an agent.
Full Management without the Fee
At Residential Estates, we offer full management of your property but with a few added bonuses that set us apart. Firstly, with over twenty-six years of experience, you will have industry experts at your disposal.
You will also receive this full and professional service without the hefty fee taken out of your rental income each month. We are currently offering new landlords a fully managed service with zero management fees. Simply pay a pre-agreed fixed fee on us finding and securing a tenant, and no further fees will be taken during the first twelve months.
We always keep up to date with regulatory changes in relation to lettings, such as recent changes concerning fire safety regulations in HMOs and GDPR. We ensure that our landlords are fully compliant, so that you don’t have to worry about fines being imposed for not meeting industry standards.
To find out more, please contact us today by calling 01244 343 355 or by emailing firstname.lastname@example.org.