New to the rental market? Here’s a six-step guide from the experts at Belvoir to help get you started.
1. The perfect property
Finding the right property is one of the first jobs of a successful investment landlord…
“Properties that make good rental properties are usually those which will appeal to the widest number of tenants in your area in order to maximise occupancy and minimise voids,” says owner of Belvoir Tamworth Angie Allgood.
“It is also helpful if the property is ‘move-in ready’ so your investment can benefit from a rental return straight away.
“Think long-term too. Low maintenance properties often offer the most cost effective solutions for landlords, so determine how much maintenance the property is likely to require in the future prior to purchase.”
2. Research and review
Understanding the local rental market is essential…
“Doing your research with regards to the local market is important for a myriad of reasons,” says owner of Belvoir Evesham Melanie Carter.
“It will give you an indication of whether you’re paying the right price for a property and, just as importantly, that you’re looking at the right type of property in the right area. It will also help you identify what tenant profile you should be appealing to – is it an area popular with families, couples or single tenants for example?
“Also, what kind of return are you looking for: income, capital growth or both? Some markets will be better suited to your requirements than others.
“Look at other properties that are currently on the market too in order to determine what’s popular and what rents well, plus ask your local letting agent about tenant demand in the area.”
3. Top tenants
The success of many tenancies is dependent upon the quality of your tenant…
“Good tenants look after the property during their stay, do minor maintenance when necessary (and with your permission) and pay their rent in full and on time,” says Angie.
“In order to find a good tenant it is important that credit checks are carried out and references are sought to ensure that they can afford the property and have no history of defaulting on payments.
“It is also important that you meet the tenant and assess their suitability face-to-face – gut instinct shouldn’t be relied on without the necessary background checks but it will help you to create a picture of who they are and how they are likely to treat your property.”
4. Essential insurance
Ensure you are adequately insured…
“There are two main types of insurance that you should be aware of,” says owner of Belvoir Melton Mowbray and Belvoir Bingham Charlotte Baker. “The first is buildings and contents cover, a good landlord’s policy should include cover for accidental and malicious damage, plus include some element of contents cover – even an unfurnished property will need cover for the cost of replacement carpets, curtains and white goods that aren’t integrated etc.
“The other type of insurance is a separate policy which is protection against your tenant defaulting on rent payments and covers you for court costs payable during the process of regaining possession of the property.
“Some landlords can get confused because often buildings and contents insurance will say it covers loss of rent, but this is usually only in the case of an insured event, such as a fire or flood, and it doesn’t cover you for loss of rent if the tenant loses their job and doesn’t pay.
“Make sure you research various policies before committing to make sure your needs are adequately met and be aware of the excesses payable too as these will vary from policy to policy.”
5. Share and compare
Sharing stories and taking advice from other landlords can be useful…
“It’s a good idea to chat with other landlords in your locality to pick up tips and hear about their experiences,” says Melanie. “You can do this through landlord forums, landlord networking events or perhaps asking your local letting agent for details of those who are happy to be contacted.
“I would always advise, however, that if you’ve got any particular issue, especially of a legal nature, that it would be better to ask a professional rather than relying on hearsay from other landlords. Picking up practical tips may be useful, but for anything of a serious regulatory nature you’d really want to seek professional advice.”
6. Expert help
Need a helping hand? Ask your local letting agent…
“A good letting agent can help you become a successful investment landlord even before you start searching for your first property purchase,” says Angie. “They can advise you on tenant demand, properties to view, potential rental return, and all those other things you need to consider before investing.
“They will also be able to help you find a tenant, carry out the appropriate credit checks and referencing, plus manage the property for you once the tenant moves in, trouble-shooting and rectifying teething problems as they arise.”
Article Courtesy of Belvoir Lettings