Thinking of becoming a landlord? Renting property out to tenants can be a great investment strategy – some people have even turned it into a business. However, it is possible to make costly mistakes by not planning ahead thoroughly. Here are some tips for making your property rental venture a success.
Choose the right property
A property needs to be in a good location that will attract tenants and it needs to be in good condition. Urban properties are often better suited – most people renting are young and don’t want to be stranded in the country where there are few social opportunities. You should also be wary of older properties that have been neglected as there may be hidden repair costs around the corner that could ruin your chance of making a profit. It’s worth hiring a surveyor who can identify these future costs, potentially saving you from buying a nightmare property.
Screen your tenants
You need to make sure that you’re taking on reliable tenants. A credit check can determine whether a tenant is a good spender – a bad credit score could be a sign that they’re going to miss payments. It could also be worth getting a reference from a previous landlord, just in case they left their previous home in a bad condition or caused other problems.
Protect yourself legally
It’s worth getting legal contracts professionally written. You may also want to hire a solicitor who can advise you on property rental laws such as health and safety features you need to add to the home or methods to try out when dealing with a difficult tenant. This could help to safeguard you against fines and lawsuits.
Get a helping hand
You can go it alone as a landlord to save money, however it’s rarely worth the stress. If DIY isn’t your thing or you have a busy schedule, make sure that you have a handyman on call who you can use when making repairs to your property. If your property is making enough of a profit that it’s taxable, consider hiring an accountant to keep track of your financial records. You could even let a property management company take care of issues such as collecting late rent and finding new tenants. You can find out more about this service online. It could also be worth booking a session with a financial advisor who can guide you through the process of becoming a landlord.
Keep an emergency fund
A good landlord needs to be able to attend to emergency repairs fast so that their tenants are happy. There may also be times when tenants can’t pay their rent, in which case you may need to find money elsewhere to pay off the property’s mortgage. Make sure that you’ve always got an emergency fund with a couple grand sitting in it to pay for these emergencies. This will prevent you having to fork out loans.