With property prices still at relatively low levels, you’ve decided to become a buy-to-let investor, or, for some reason, you have to either sell or put up your house for rent. Here’s what you should know. Firstly, it is important to know that being a landlord is hard work. You will need to treat it as a business. It will take time and commitment from your side – with your day job, can you take on the additional responsibility of fixing water leaks, replacing faulty garage gates and unblocking toilets? Will you manage rental and electricity bills and ensure all bills are up-to-date? A happy tenant is likely to pay you on time and maintain your house for rent – if you don’t have the temperament to manage the property, consider employing a rental agency to manage the tenant on your behalf. If you’re moving out of town, employing an agent should be a serious consideration if you can’t sell the house. Other factors to keep in mind before putting up your house for rent:
- Calculate the total cost of running and maintaining the property
This should include mortgage payments and possible replacement costs when the tenant moves out, e.g. repainting the inside or putting in new carpets.
- Estimate your rental income
This will be determined by prevailing rates in the area where your property is situated, and not by your cost of running and maintaining the property. You can get an idea of market rentals for similar properties by studying property websites and advertisements. Compare the income with your estimated costs, and see whether it will make financial sense to put up your house for rent.
- Find a tenant
If you’re up for the task of being a landlord, you need to find a good tenant. Don’t just trust your gut feel about someone – do the necessary credit checks and get references from previous landlords. Make sure you sign a contract .