Do you know WHY you are, or want to become a Landlord?
Is it just that you have money and are wary of the Stock Market but want better than the pathetic interest rates available from Banks and Building Societies? Or do you have a plan in mind? For example, is it part of your retirement planning or it is a future gift for your child/children?
And even if you know this, you still have to decide whether capital growth or income yield is most important to you.
(Income yield is your monthly rent x 12 divided by how much you paid for it including costs x 100. For example, you buy a house costing £100,000 after all expenses; you have a rent of £500 per month x 12 = £6,000 divided by £100,000 = 0.06 x 100 = 6% yield).
So your motivation in being a Landlord really matters because it will, or at least should, affect what and where you buy.
As a general rule, modern properties are more energy efficient but have smaller rooms and gardens. Older properties are less energy efficient but have larger rooms and gardens. The good news is that there are tenants out there for every property, providing of course it is in good condition.
From an investment aspect, you should buy the best property you can afford in the best area available to you. This is likely to give you the highest increase in value over time. Alternatively, buy two smaller properties if funds allow but make sure they are not only in a sought-after location but in a good area within that location.
Knowing the best area or town and understanding where in that town are the best locations means that I always recommend people to buy in places they know. Much less likely that you will end up buying something which, over time, doesn’t meet your goals.
HMRC are forever finding new ways of taxing Landlords on their rental income or removing expenses you can offset against rental income. It is vital therefore that you get advice from an accountant experienced in dealing with Landlord accounts before you start, just so you understand these matters.
Now You’re A Landlord
Of course, you want quality tenants quickly and paying the highest rent you can get. To achieve this, you should get advice from an Agent who has advised many clients on how to refurbish, decorate and market rental properties. At Cass Properties we have much experience in this area and work with buyers of rental property to make the most of their investment.
What Tenants Look For
We are all different and, as I said above, there is a tenant for almost every property but there are things, many of them obvious, which you can do to make your property attractive to large numbers of tenants.
So a brief list of what Tenants think are important:
Location – I don’t mean at a high level; presumably they wouldn’t be looking if it wasn’t in the general area they want to be. I mean does it seem a ‘nice’ part of town.
A Garage or at least off-road parking – Garage for safe storage; off-road parking to minimise the chances of damage to your car.
Condition – Does the property look as if it is water tight, well-maintained and not likely to fall down any time soon.
Decoration – It really puts tenants off if they walk into a tired property with old, poor condition carpets and clearly in need of a new lick of paint. It’s not uplifting and suggests the Landlord doesn’t care about the Tenants, only about getting the rent – and who would want to live in a property like that?
Kitchen & Bathroom – Old, worn-out kitchens and bathrooms are another huge negative for Tenants. Kitchens and bathrooms sell houses! And they get them rented out as well!
Shower – You might think this is trivial but please don’t under-estimate the modern Tenant’s desire for a shower and a decent quality one as well. Most of us take far more showers than baths and why should tenants be any different? It really does matter.
Local Letting Agents know the pitfalls and opportunities. Get some honest and experienced advice. And even though I say so myself, you won’t do better than Cass Properties.