Not everyone becomes a landlord to create a well thought out side-hustle, or as a way supplement their pensions. For many, a change of circumstances means it is a necessity, rather than a choice. But possibly not a bad one!
The London rental market has boomed over the past 20 years, as runaway property prices have kept many would-be first time buyers from having the opportunity to buy. Experts have predicted that rents are likely to grow by a further 18% in greater London over the next 5 years as new housing supply continues to dwindle.
If your thinking of investing in property for the first time, or perhaps you’re already a homeowner, and not sure whether to sell or let your property in order to move, here are some tips to help you on your way.
Mortgage Restrictions?
Before you jump into preparing your property for the rental market you need to check if you are permitted to let out the property. For instance, if you have a mortgage on the property, does your lender allow you to let? Most lenders will be flexible and understanding, if you have a change in circumstance, but it pays to check the terms and conditions before letting the property out. Properties bought using Help to Buy should not be let out according to the rules laid out by Homes England. Most lenders are understanding, provided you have lived in the property for at least 6 months.
Getting market ready
Just as if you were planning to sell your property, you need to be on top of any maintenance issues. It is also worth taking the time to complete any little jobs that may arise in the future; this could prevent a void period where you are not receiving any rent whilst the works are completed. Refreshing the décor of your property will also ensure that it is presented in a way that will attract potential tenants, and also demonstrates that you care about your property.
To furnish or not to furnish?
Most tenants in London enjoy the flexibility of renting, and the convenience that brings. With that, most tenants tend to not want to have move furniture from property to property. Some tenants will ask to swap out certain bits of furniture, but most will be happy to use what is provided. Adding thoughtful pieces such as a sofa bed and good size wardrobes can make all the difference when tenants are choosing where to rent.
Do some market homework
It’s best not to assume that your property will achieve a certain rental figure without having undertaken the research and sought advice. Trying to achieve a price that is too high, will put off potential tenants and won’t attract many viewings. On the other hand, pricing it too low will make it difficult to get your finances to balance with the ever changing regulations for landlords. Many lettings agents will charge a minimum of 10% plus administrative fees to let a property, so be sure to understand these upfront. There are an increasing number of online landlord platforms who cut out the middleman and can save thousands - although be prepared for late night viewings and dealing with maintenance issues yourself.
Don’t ignore the details
With so much to learn and get your head around, many first-time landlords can overlook some of the details. There is no doubt that the number of regulations and legislations you have to follow is overwhelming, and sometimes issues can arise due to misinterpretation or confusion. Having an experienced agent guiding you throughout the process, can make for a smooth transition from being a homeowner, to becoming a landlord.
Thinking of becoming a landlord for the first time? We’d love to hear from you and share our insights to help you invest and let successfully. Check out our New Homes.
