Things to Consider When Looking to Invest in a Buy-to-Let Property
Buying property to let can be a very lucrative and rewarding investment, especially compared to other forms of assets. However, before you rush out and invest in a buy-to-let property, there are some things you need to give serious consideration to, as outlined in the following post.
Make Sure You Understand Fully Your Responsibilities Legally as a Landlord
When you become a residential landlord for property, you take on various legal responsibilities. For one thing, having a rental property among your assets is like owning your own business. You’ll be required to declare the income for the HMRC. Aside from that, there are also other legalities you are responsible for too, many of which may require special certifications and assessments. Some of the current regulations that are in place for rental properties include:
- Electrical appliances are safe
- Plugs and sockets are fully compliant
- Right to rent checks
- Legionnaires disease inspections
- Furniture is fire-resistant
- In certain areas you are required to have a landlord licence
- Protection on the deposit given by the tenant
- Certificates noting the energy performance of the property
- Certificates that it’s passed gas safety checks
It’s important not to ignore any of the above and to always check with the local authority in charge of the area where the property you are interested in buying is, for any local regulations you need to follow. Failing to do so can lead to fines and other legal processes. Which can mean a waste of money, time and energy.
Think About The Costly Situations Landlords Often Face
When you are buying a property to let, it is very much the same as buying your own home, you need to think about stamp duty, legal fees, deposit, mortgage costs, the works. When you are becoming a landlord, though, there is even more to think about, as we’ve already highlighted above.
There are also certain risks that come with this kind of investment. As these can often have costly implications, it’s important to think about them before buying a property, as they might stretch you budget further than it will actually go. Think about what you will do and if you can afford any periods where you have no tenants or when tenants refuse or can’t pay rent. This may result in expensive legal fees. Renovations and repairs are also aspects you should factor when making the decision to invest or not.
Think About Who You Want as a Tenant and How Much You Want to Charge for Rent
Other important factors to consider when deciding whether or not to invest in a buy-to-let property or that will help you choose the right property is who you want as tenants and how much you are hoping to charge for rent. To figure this out, as well as discussing your hopes and goals with an agency like Newington Estates, you need to research the area where you are thinking of investing in property.
What kind of people rent there? How much is the going rate for rent? Whether you are going to rent out to students, professionals or families will also help you determine the kind of property you will need to invest in.
Do you Want to Take a Hands-On Approach or Not?
As we stated earlier, becoming a landlord is very much like running a business. There is a lot involved, even after you have bought the property, decorated and housed tenants. Do you really have enough time to devote to every aspect of a rented property or would you prefer to leave the management side of things to a firm who knows what they are doing? Why not discuss that option with Newington Estates, who will take care of it for you.