Here are our top 10 tips for first time landlords.
It's a difficult choice when you've never been a landlord before, but you need to work out if you have the time to be a hands-on landlord (and be the one they call at 4 in the morning when the boiler breaks), or if you want to give up some of your rent and pay a property management agent to do all the hard work.
Many agencies now also offer a pick 'n' mix option where you can select only the services you need such as rent collection, deposit registration, inspections, or inventories.
There are plenty of options when it comes to deciding on the type of tenants you want to aim your property at; are you looking for the high rental returns that come with a large group of students or potentially longer term lets from professional tenants or a family.
Choosing your first rental property depends on the type of landlord you want to be and the type of tenants you want to attract. If you want a purpose built apartment there are extra charges such as ground rent and concierge fees to consider. Speak to any other landlords you know, research online and speak to a letting agent who has experience in the area you're looking in.
There's a lot you need to know about before you take the first step in becoming a landlord; gas and fire legislation, landlord insurance, and health and safety are just some of the things you will need to research before you let your property.
You also need to check rental history for the property; legislation in many areas means you can't just buy any 5 bedroom house and decide to let it out. It's definitely necessary to get some expert advice before you buy any investment property.
University cities such as Newcastle are very popular rental locations and can give returns of up to 10% in some areas- higher than the national average. Not only do university cities give the opportunity to tap into the student rental market, but also the young professionals who chose to stay in the city post-graduation.
If you are investing outside of your local area, find an agent you can trust to help source and take care of managing the property.
You need to be realistic about the rental yields you can achieve - it all depends on the type of property, the standard of decor and the location. Looking at similar properties on property portals, such as Rightmove and Zoopla, can be a great indicator of asking rents.
If you're not a cash buyer you will need a special buy-to-let mortgage and the ability to provide a larger deposit than on a normal home purchase. There are a wide range of buy-to-let mortgage products on the market, so make sure you do your research and speak to an independent advisor to find the best one for you.
There are two options when purchasing a buy-to-let property; you can buy somewhere which has existing tenants and includes all the furniture, fixtures, and fittings. This option means you don't need to spend extra money on the property and you have an up-and-running investment. Alternatively you could buy a property to refurbish and hopefully enjoy an increase in the rental income.
You may have budgeted for purchasing the property and any legal or agent's fees, but it's also necessary to prepare for the possibility of emergency maintenance such as a new boiler. Not only this, but what if your property doesn't let straight away and you end up with void periods? Having a buffer of at least two or three months rent is recommended, just in case!
Once you've bought your first property it's time to find the tenants. Advertising your property yourself is always an option but using an agent can be a lot more successful, as well as much easier.
A good agent should have the benefits of a full marketing strategy including a good website, social media, property portal advertising, and an up to date database of potential tenants. An agent will also be able to carry out credit checks or ensure tenants have a guarantor to give you more security that the rent will be paid on time.
Whether you're a first time landlord, or already have experience in the sector, letting with Seekers couldn't be easier. We have over two decades' worth of experience in property lettings, and offer a wide range of services from let-only, to full property management.
If you'd like to find out more, call us on 0191 243 1000, or visit our Percy Street Office.