Becoming a landlord can be an exciting and profitable endeavour. However, it's essential to consider the various factors that go into being a successful landlord before diving in headfirst.
Being a landlord requires a significant investment of time, money, and energy, so it’s important to understand everything that's involved before making a commitment.
Here are the top things you should consider before becoming a landlord.
For more lettings tips, take a look at our helpful landlord guides.
Research the local market
Before purchasing a property to rent out, you will need to research the local rental market. This will help you determine the potential rent you can charge and the demand for rental properties in that specific location. Understanding the local market will also help you make informed decisions about the type of property you should invest in and the rental rates you should expect to charge.
Be prepared for the responsibilities
Being a landlord is a hefty responsibility that requires a significant investment of time and energy. This includes managing the property, finding and screening tenants, handling maintenance and repairs, and responding to tenant complaints and concerns.
Before becoming a landlord, it's important to consider if you're prepared to take on these responsibilities - or if it would make more sense to hand them over to a letting agent. Whitegates offer several different managed lettings packages for landlords. Find out more here.
Have a plan for financing
Purchasing a rental property requires a significant investment of money. Before becoming a landlord, you will need to establish a solid plan for purchasing the property. This may include obtaining a mortgage or finding other sources of financing.
Additionally, your budget shouldn’t be limited to just the upfront cost, as unexpected expenses may arise while managing the property, and therefore it’s important to have a ‘safety net’ saved up before investing in a rental property.
Screen tenants thoroughly
One of the most important aspects of being a landlord is finding and screening tenants. Finding the right tenants for your property ensures that you will be renting the home to responsible individuals who will take care of the property and pay rent on time. This includes:
- conducting background checks
- verifying a reliable stream of income
- obtaining references from previous landlords or employers.
Trusting a lettings agent like Whitegates to do this may save time and effort.
Have a plan for maintenance and repairs
Maintaining a rental property is a substantial responsibility that requires regular upkeep and repairs. Before becoming a landlord, it's important to have a plan for handling maintenance – especially if your availability is limited due to work. For many landlords, using a letting agent is the most effective way to keep the property up and running and their tenants happy.
Be prepared for vacancies
Finally, it's important to be prepared for periods when the property is unoccupied – otherwise known as void periods. There will inevitably be brief spells when your property is vacant, and you'll need to have a plan for managing these periods. This may include setting aside funds to cover expenses during vacancies, or finding creative ways to attract new tenants.
