Becoming a landlord seems like a good idea when you first consider it. However, when you take a closer look there is a lot more to it than meets the eye. You have structural issues, legal issues and, financial issues to deal with and this can be overwhelming when you are starting out. Before you take that big step and purchase your first buy-to-let property find out as much information as you can.
Do your research of the local housing market
When you are buying a property to rent out, you have two areas that you need to research. Find out what the local rental sector is like. Is it buoyant and are landlords renting their properties easily? If there are a lot of vacant properties in the area it is probably not the best area to rent in.
Then you need to research houses for sale. To make a profit as a landlord you need to buy at the right price and save as much as you can on the purchase price. However, you also have to factor in what you will have to pay to get it up to standard before you rent it out. If you are not qualified to structurally assess a house and are not sure if it is suitable for rental you can find out at SolexGroup.ca and get some advice.
Even if the house is structurally sound, you will have to freshen it up to make it attractive to tenants. A bright and gaudy décor tends to put tenants off. Most prefer a neutral, fresh look. Make sure that the heating, hot water, and all the appliances are in good working order. It will save on expensive and time-consuming call outs once the tenancy is underway.
Keep on the right side of the law
Find out if and how you need to register as a landlord. Get some legal advice on what your obligations as a landlord are. Get a legal tenancy agreement prepared by a legal expert and get some basic knowledge on how they work. Find out what action you can take if you need to remove the tenant from the house. You will need special buildings insurance for the property when it is let to a tenant.
Renting does not always go according to plan. It is sensible to keep a reserve of cash so that you can pay the mortgage if the property becomes vacant or the tenant refuses to pay their rent.
Buy in some help
Very few landlords handle everything themselves. They use a tenant finding service or they get a real estate agency to handle the management of the letting. As a landlord, you can be as involved as you want to. However, if you want to handle everything yourself it can tie you down. You may get called at 1 a.m. by your tenants because the basement is flooded and you will have to get over there and deal with it!