Whether you are a seasoned investor or are looking to purchase a rental home for the first time, there are several aspects to consider before committing to a property.
Whether you are a seasoned investor or are looking to purchase a rental home for the first time, there are several aspects to consider before committing to a property.
An initial consideration is whether you intend to manage the rental and tenancy yourself or would be better placed to work with a lettings agent who can handle it for you. Agents can typically offer different levels of service from a fully managed offering, including finding tenants and maintenance, to just collecting the monthly rent. Some will also have a sales team in the office so if becoming a landlord is something you are thinking about reach out and they should not only be able to talk you through renting processes but they may also be able to point you in the direction of suitable properties available on the market.
This being said securing the right house at the right price will not only be critical in providing a good return on your investment but also ensuring you are not borrowing excessively so that the expected letting yield doesn’t cover the costs.
In addition to the purchase, there are associated costs with renting properties so do acknowledge these when budgeting. You will have certain obligations, such as safety certificates, as well as ad hoc expenses, such as appliance repairs, so creating a spreadsheet for the potential rental income, anticipated and unexpected expenditures and any mortgage repayments will help keep things clear.
Considering the scope of the property and area it is located in is equally essential. Is it in a desirable area? Is it close to local amenities and transportation? Does it need much renovation? Is there scope for future development? Finding a great property in a place with both rental and residential homes will likely present options in the future, whether continuing to let it or deciding to sell.
