Buy to Let -
10 things all potential investors should consider
This is just a springboard
check list to get you thinking around the subject.
it isn't exhaustive by any means, but hopefully it
will help you get your ideas organised.
Are you good at dealing
with people?
DIY Landlording will at times involve
dealing directly with your tenants. There will be
times when you need all the diplomatic skills of
a Henry Kissinger, if you are to successfully achieve
your objectives.
Being a landlord is a contradictory
position, on the one hand you are an ambitious entrepreneur
with a keen eye on the bottom line. On the other
hand you are a service provider being paid (hopefully,
if you have chosen tenants wisely) to provide a
service, sometimes to awkward customers, you may
not be particularly sympathetic towards.
If you are the impatient grouchy
type then maybe getting a property management professional
to do the customer facing stuff for you would be
a sensible decision.
Joining a Landlord association
will help you in many ways. The support and advice
of other landlords may be invaluable.
National
Federation of Residential Landlords
National
Landlords Association
Residential
Landlords Association
It might also be a good idea to
join in with a local council approved landlord scheme
which may give you a ready made structure for how
to deal with tenants fairly. To find out if your
council operates such a scheme here is a
site where you can find your council's website.
Do you have a working knowledge
of building maintenance specialities?
Whilst good tenants may often need
the kid gloves approach, building professionals
are often more responsive to a more robust style.
Like their distant cousins the motor mechanics they
are instinctively able to scent ignorance of their
methods. You can lose a lot of money to an unscrupulous
builder, electrician etc Not only on paying above
the odds for work, but in void periods and other
ways if their work is shoddy or just takes too long
to complete.
If you don't know the difference between a lintel
and a joist, you either need to do
some reading up on the subject, or employ a
trusted professional who can liaise for you at these
times. One piece of advice - never employ a 'professional'
to do work on your property without first having
sight of their up to date insurances.
Are you good at dealing
with plumbers, electricians, joiners and the myriad
other building professionals you may need?
As well as having some knowledge
of various trades, you also need some management
skills in order to keep them in line. Many people
use friends and relatives as cheap sources of labour,
but in the long run this can cause more problems
than it solves. A proper contractual relationship
means you have some recourse if things go wrong
and you don't end up losing friends or fracturing
family relationships if problems crop up or they
begin to feel taken advantage of. Plus 'cheap' labour
often means slow - and the sooner works are carried
out, the sooner you can be asking the best rental
income possible for your property.
Remember money spent on professionals is tax deductable
- so it may be less expensive than you would think
in the long run.
Which areas
have a healthy rental market place?
One rule of successful business -
find out what people want and give it to them. So
it makes sense to do your homework and tailor your
rental property to the marketplace. Sites such as
LetaLife can give you a fair indication of supply
and demand in many areas across the UK. View
the adverts in your area.
What sort of rental properties are in demand?
However be careful. Lots of Wanted adverts doesn't
necessarily tell the whole picture. Are the adverts
for entire properties or just rooms? This could be
influential on whether you wish to rent out a house
for a family or buy somewhere geared up for bed sits
and house shares. There are different legal and safety
requirements for shared properties which you will
need to be compliant with.
You also need to compare the number of Wanted adverts
with the number of To Let adverts. The most promising
scenario is an area with many Wanted adverts but not
very many To Let adverts. This ratio would suggest
an encouraging climate in which to invest in a rental
property. Check this sort of information from a number
of sources rather than just one, before you make a
firm decision.
Which areas have the highest
rental yields?
This does not always correspond
to the same areas you will find with the healthiest
rental market place. But if you can find somewhere
that does - you are beginning to get somewhere.
Do you have a reliable
cost-effective method of finding suitable tenants?
Quick answer to this one is 'Yes!'
LetaLife is used by over 2 million people a year
already. It is entirely dedicated to the Rental
Property Market Place and has been ranked as the
number 1 UK Rental Property Website for over 2 years
by Alexa.com a respected industry ranking website
which is part of the Amazon Group. Currently the
most expensive advert option is £10 - and the
cheapest is free of charge. That level of service
and cost-effectiveness can't be beaten.
Try us and let us know what you think.
We have advert pages for over 1,760 places across
the UK so there should be a suitable page for your
property or rooms.
LetaLife doesn't charge commission
and doesn't even require you to register to use
the services. We have always believed in providing
easy to use , free wherever possible services.
We always stick to the number one business rule
- find out what people want - and give it to them.
Do you have a reliable
method of credit-checking tenants ?
This is important in order to safe
guard your investement. There are many companies
online who will provide this service for a fee.
No method is entirely fool-proof however.
Are you aware
of the legal responsibities of being a landlord?
Again, you need to do your homework.
There are health
and safety implications as well as
tax implications and you may find you have responsibilities
to neighbours of your properties as well.
Do you really
want the hassle?
It's a bit like the RSPCA adverts
about a Puppy being for Life not just for Christmas.
Being a DIY Landlord is hard work. It requires skills
and research to do the job properly. However if you
do find it's too much for you, there are many great
letting agents out there who will take the stress
off your shoulders. But make sure that you factor
in this possible extra expense when you are doing
your sums. You don't want to spend all that time and
effort and money and then end up spending all your
profit on management you hadn't bargained for.
