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Building and protecting your wealth

Successes and failures of being a landlord 

Investing in property can be a lucrative way to earn an income, but it is not as straightforward as it can appear.  As well as looking after the property and managing tenants, you must make sure you are abiding by the numerous rules and regulations that govern rental properties. This article discusses what you need to do to become a successful landlord and some pitfalls you need to avoid.


This article does not constitute advice. Professional advice should be taken prior to acting on any part of it. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.


How to be a successful landlord

Developing a well-thought-out strategy that details what you want to achieve from property investment will help your venture be a successful one.

If you own one rental property or hundreds, your reason for investing in them should be clear i.e. do you need access to the rental income now or is your property portfolio needed for your retirement?

If you decide to invest in apartments, houses etc. there are strict laws (160 in total) and over 400 rules and regulations that you must adhere to as a landlord.  Some of these include:

  • Ensuring the property is safe and free from health hazards
  • Checking that the tenant has the right to rent the property (England only)
  • Making sure the property is fitted with working smoke and carbon monoxide detectors, and ensuring that these are tested regularly

Source: .gov website

Becoming a landlord is a big step and it could involve you investing a large amount of your money.

It is advisable that you talk through your options with a financial advisor to ensure that you fully understand the financial implications of becoming a landlord. 


What to avoid as a landlord

One of the biggest mistakes landlords make in the beginning is not knowing the area they are buying in. It is unwise not to conduct some sort of research before purchasing the property.

Ideally, you should go to view the property, look around the area to see what amenities are available and check if the neighbouring properties are in a good state of repair.

If this is not possible, a great deal of information can be found online. Using Google Street View, you can see what the property (and neighbouring properties) look like.

More things to avoid: 

  • Letting the property get into disrepair
  • Not vetting new tenants
  • Ignoring tenant’s complaints and not listening to their concerns
  • Not understanding the legal obligations of being a landlord
  • Not being fully aware of the financial implications of being a landlord, in particular not being aware that Income Tax is due on the rental income (minus the day-to-day running costs) and Class 2 National Insurance if the rental property is classed as a business.

Get the right mortgage for your buy-to-let property

It is also important that you obtain the correct sort of mortgage when purchasing the property.

You should tell the mortgage provider that the property will be a rental property.

Failure to do so could make you in violation of the terms and conditions set out in the mortgage offer. Although, lenders vary in their exact enforcement, particularly if you become an “accidental landlord”.

Read more about accidental landlords 

Fortunately, there are still a number of low-cost buy to let mortgages available to property owners with the right credentials and a solid financial history.


Need a buy to let mortgage?

If you are planning to invest in a buy to let property, ensure you have the best mortgage. Speak to Chris about your options and to get a competitive, independent quote: 

 

icon_phoneTel: 01403 780 770

 

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