If you are considering becoming a landlord for the first time or you are already a seasoned professional landlord, we hope you'll find this landlords guide and our landlord checklist useful.
With more than 3.5 million people in England now living in rented accommodation (that’s more than one in six households across the country) one would say that the demand for rental property is at an all-time high – this is good news for those considering becoming a landlord.
The lettings industry can sometimes be a little confusing, regardless of how experienced a landlord you are. Becoming a landlord can be daunting for some and for others, the thought of owning an investment property that reaps the rewards of rental profit is exhilarating and can often lead to serial property investment.
Our golden rule to becoming a landlord
Our golden rule on becoming a landlord is to "Treat your property and tenants as if the property is your business and the tenants, your customers. Treat your customers well, and they will look after your business (most of the time anyway)."
During the learning stages on becoming a landlord, you will no doubt read about all sorts of dangers lurking around the corner such as rent arrears, increased licensing fees, reduced benefit entitlements and the increase in the cost of borrowing, however, as long as you are prepared and have a contingency plan, you should be able to navigate your way around these obstacles with relative ease.
There is an upside of being a landlord too. The prospect of long term capital gain and a steady monthly income is certainly attracting more and more landlord investors both locally and from abroad.
It is estimate that approximately 60 per cent of new-builds in London are purchased by overseas investor landlords. The trick to becoming a landlord in the UK is: ‘Research, research, research’ and in most cases, to follow your head and not your heart.
Where should landlords invest in property to let?
When speaking to landlords, it is evident that the decision on where to purchase the rental property is normally tied to where the landlord lives.
This may be practical from a management perspective however, the property may not net a high return on investment (ROI) based on the purchase price and the rental market in the area. A landlord should look for areas of high return rather than proximity to their homes.
What type of property should I be investing in?
Flats are often seen as low maintenance for landlords however, when it comes to marketing a flat to find potential tenants, you may find yourself up against a lot of competitors.
In our experience, small affordable homes with 1 or 2 bedrooms make ideal rental properties and rarely stay marketed for long. This type of property can often be picked up at the same price as a new build flat, however, may not have the “modern look” and may require a little more attention. Flexibility on your tenant criteria will certainly influence the ‘letability’ of the property. tenants with pets and tenants claiming local housing allowance form a client list desperate to be serviced.
If a landlord would accept tenants under these circumstances, the likelihood of a property remaining empty is greatly reduced.
However, before you begin to advertise a property for rent, let’s take a look at the first steps of becoming a landlord, and that is – obtaining what the industry refers to as a ‘Consent to let’ which essentially is a formal way of getting permission to rent out your property.