Friday, 24 June 2011 10:47 AM
If you've been thinking about becoming a landlord then there are many things to consider and you may want to look at a list of reasons for and against purchasing a property to rent.
Something to think about are the financial implications associated with owning a buy-to-let house or flat.
While there are many advantages of having a valuable asset, if you can't afford it in the short term then it will not benefit you greatly.
Therefore, you need to look closely at whether you can afford not only to buy the residence, but keep up with maintenance costs once you have purchased it.
There are a number of hidden expenses to take into account with becoming a landlord and you need to calculate how much you can spare if there was a plumbing, gas or electrical problem with the house and it needed to be fixed urgently.
You also need to consider decorating costs over the years, as property has to be appealing to prospective tenants and you will be required to make touch-ups when there is a changeover of residents.
Prospective landlords should research legal costs, which may be required if you are chasing up rents, as well as marketing expenses to promote the property in order to find a tenant.
While you hope that for most of the time, you'll be able to rely on the rent as an income to pay off the mortgage on the property, there may be periods when the accommodation is vacant. Therefore, it is important to assess whether you could cope financially with paying for the buy-to-let loan without receiving the rent in return to cover this.
You might want to make sure you have enough cash in reserve should this occur.
This also highlights the importance of maintaining a good relationship with your tenant by being a helpful landlord so that they are encouraged to stay in your property and you don't have to worry so much about marketing expenses and keeping an empty residence.
However, despite these considerations, there are many advantages with letting a property and real estate has long been considered to be one of the most valuable assets you can own. This is because while there is always some risk involved with investments, over time you are likely to see the value of the property increase.
So while you can enjoy having a rental income to pay off the mortgage on the house or flat and hopefully also supplement your earnings, you can rely on the asset in the future.
Should anything happen to you - such as losing a job - you could fall back on the property and either move into it yourself or sell it on for a profit.
This means that the value of the property to yourself will carry on long after your last tenant leaves the building.
And if you want to be able to make the most of having a buy-to-let house or flat without the extra burdens and responsibilities that come along with being a landlord, you might wish to consider having the help of a letting agent.
They can offer landlord services, such as making sure rent is paid on time, performing credit and background checks on the resident and marketing the home, without you having to worry.
There are a number of things to consider with letting properties, but all prospective landlords need to do is to keep their long-term goals in mind, as building a portfolio of residences might be very lucrative in the future.