I advise a lot of individuals looking at buy-to-let in terms of how to maximise investment, but I also advise those who already own a property and are considering renting. It may be those moving abroad for work or couples with two properties who are moving in together, so renting is an attractive option. Even more so as current demand is outstripping supply. But where to start?
I always begin by saying that renting isn’t as straightforward as many people might think. But with the right preparation, letting your property can bring many benefits, so this might help to start you in the right direction.
Do your sums
Speak to a financial adviser about any changes you may need to make mortgage-wise as buy-to-let mortgages vary from other products. In your budgeting include any work that you might want to do before renting. This could include redecoration or new flooring through to bathroom and kitchen improvements.
You will need to cover any possible void periods and get advice on the tax implications you will face. Plus get quotes from reputable agents for a realistic estimate of rental income. Remember too that your property must be safe to rent and meet all regulations including (but not limited to) getting the boiler checked, a gas safety certificate and smoke alarms installed.
Think about who your property would attract. For example, if it is a family-size home, is there anything that would make it more appealing? If you plan to make any changes to bathrooms etc, then you might want to think twice about removing a bath in favour of just a shower as this might reduce interest.
Also think about whether you will be flexible in terms of any restrictions you might have in mind. Accepting pets or not, for example, or if tenants wish to do any decoration themselves or make their own changes in the garden.
I always recommend treating applications on an individual basis, rather than a set ‘no’ to pets, decoration etc. Clauses can always be incorporated in contracts to cover any additional needs that might accompany such requests so that everyone knows where they stand from the beginning.
At the mention of contracts, I cannot stress enough the importance of having a legal and formal tenancy agreement in place – even if you rent your property out to friends or family. There is a lot to consider with so many laws and regulations surrounding lettings, which if you opt not to use an agent you will be personally responsible for. You will need to be compliant and stay up to date with new regulations at all times as the alternative is huge fines or even criminal prosecution.
If you would like any further discussion on renting out your property or anything on the local property market, please do not hesitate to contact me and I wish you all the very best for 2022.