If you own a property or have recently invested in one for the future, renting it out to a tenant is a fantastic way of securing a consistent secondary income. Thinking about becoming a landlord, but unsure of where to start? We’ve compiled a shortlist with a few beginner’s tips that you may want to consider. Read on to find out more!
Think about the responsibilities that come with the role
Becoming a landlord is an exciting and potentially lucrative prospect, but it can also be quite a massive undertaking in many respects. For this reason, then, you must think about whether you have the time and effort to put into a project like this (or even generally running a secondary property to your own), especially if you have existing work commitments that are important.
Suppose you like the idea of becoming a landlord, but you aren’t sure of whether you can handle all of the day to day issues that come along with it. In that case, you might decide that you want to take a hands-off approach as an investor and have a company or specified professional deal with the everyday tasks while you collect the earnings. Sure, they will take a little bit of the cream off the top, but it’s perfect for dipping your toe into this industry if you’re already an investor who has a lot on their plate already.
Consider the tenants that you want to attract
Tenant demand is a massive part of the investment process. Without the need for tenants in a specific area and within a particular property type, you could have a fantastic property on offer, but no one to live in it. Try to think about a critical set of people that are high in demand for housing at the moment, and maximize your chances of having constant tenancy.
If you haven’t yet purchased a property to rent out to tenants, and you’re still looking to invest as a strategy, then another vital thing to consider is the area in which you’re investing. You will want to purchase in a place that has promise for the future and a surplus of the tenants that you’re trying to attract to ensure your property is consistently filled and in-demand.
In terms of the UK market, for example, RWinvest state in their guides that Liverpool is a trendy spot with young people at the moment (as well as being an up and coming place generally in terms of rising property prices), and so you would want to consider the North West if you were trying to appeal to a younger or even student demographic.
Be up-front with your potential tenants
When moving into a new apartment or home, rarely, there won’t be any outstanding issues or niggles that need to be ironed out from past residents. Even brand-new build properties inhabited for the first time tend to have problems that will arise as things get settled over the coming weeks and months from opening. For this reason, it’s important that you get out ahead in front of any problems that you’re aware of, as it might not be pretty at first, but it will ultimately build up trust with tenants.
Sure, you want your property to look as good as possible and highlight the positives of the building and the surrounding area to entice as many people as possible and secure a tenancy. Still, if you try to pull the wool over people’s eyes about outstanding problems, then it will only come to bite you at some point in the future. If you want to become a successful landlord, you need to maintain a good reputation, so make sure that you try to build a strong relationship with your tenants and make them feel like they can touch with you to sort out any issues if they have them.