There are several reasons why you might be considering becoming a landlord. Perhaps you’re moving away for work but don’t want to sell your home or you may have inherited a property from a relative and want to generate a monthly income from it.
Whatever your reasons for becoming a landlord, the following guide will help you answer the question of how to get started.
- Being a Landlord is a Business
Many people find themselves thinking that if they had the money, they’ll just buy a few houses to rent out and live a stress-free life off the income.
While this is great in theory, it’s very rarely this straightforward. Being a landlord and owning rental property doesn’t just mean waiting for the rent to flood in each month. There are taxes to pay, tenants to deal with and maintenance costs to consider.
It can be a great source of income, but don’t fall into the trap of thinking it’s an easy way to make a fortune with very little work. It can be just as demanding as running an actual business.
- Is Your Property Suitable to Rent Out?
It’s not just a case of buying a property, sticking it online and waiting for the first tenant to come along.
Before you consider becoming a landlord it’s important to do some research into the rental market. Many towns and cities are rental hotspots with potentially excellent returns, while others may be a bit flat with far less demand for rental properties.
On that note, take a look to see how much other similar properties are being rented out for, as this will give you a good indication of your potential returns.
Another thing to consider when it comes to suitability is the condition of your property. If you’re planning to move away and rent your property out then you’ll need to make sure all those little odd jobs and minor issues that you’ve been delaying have been fixed before tenants move in.
The last thing you’ll want when you’ve just moved out is to be taking phone calls about broken fences, unserviced boilers or drafty windows.
- Work Out Your Monthly Costs – Including Void Periods
While rental properties can be lucrative, they can also very quickly become a drain on your finances too, so it’s important to take into account all of the costs that you’ll incur before deciding whether becoming a landlord in Chesterfield is right for you.
If the property is mortgaged then this will be your single biggest cost each month, and you’ll need to factor in potential void periods where the property is empty.
During these periods you’ll have costs such as council tax and utility bills to consider, so it’s important that you work out how much all of these expenses will add up to each month.
And not forgetting you’ll need some ‘rainy day’ money put aside for those one off costs, such as a new boiler or windows.
- Check if You Can Rent Your Property Out
Depending on your mortgage agreement, to be able to rent out your property you may need to switch to a ‘buy to let’ mortgage.
Similarly if you bought your property under a shared ownership scheme then it’s unlikely you’ll be able to rent that out without speaking to the housing association first either.
Put simply, it’s best to check with your mortgage provider in advance, as you don’t want to run into trouble further down the line.
- Consider How You Want Your Property to be Marketed
Some of the things you’ll need to consider when marketing your property include clauses for pets, whether to allow smoking or vaping and whether to rent the property as furnished or unfurnished.
You’ll also need to decide whether to rent through a lettings agent or do it privately. Using a lettings agent will mean an additional expense each month, but this option has the advantage of taking a lot of the stress out of dealing with tenants directly and finding tenants yourself, so it will ultimately make your life a bit easier.
- Check Your Legal Responsibilities
Last but certainly not least, you’ll need to be aware of the legal responsibilities that come with renting out a property in Chesterfield.
There are several criteria that you’ll need to meet, including making sure the property is fit for human habitation, having a gas and electrical safety check carried out every year, having an Energy Performance Certificate (EPC) in place and having smoke and carbon monoxide alarms fitted and functioning.