Recent research from the Association of Residential Letting Agents shows that 40 per cent of existing landlords are planning on making more acquisitions during 2008. But, potential landlords should consider many different factors before committing to letting a property. Performing a full risk assessment and being realistic about the finances required to pay for and maintain the property is essential.
Unless you own a property outright, then you need to consider the best way of financing its purchase. Until recently there were thousands of different buy-to-let mortgage products available throughout the UK, but since the credit crunch, many have subsequently been withdrawn. Those that remain have tighter lending criteria and therefore come with quite stringent conditions. Ensure that you shop around before committing to any lender, and don’t settle for the first offer before checking out others. It may also be wise to opt for a fixed rate buy-to-let mortgage as you can plan your expenses for a fixed period with a degree of certainty.
Being able to withstand a period of non-occupation, or non-payers is also an important consideration. If you can only afford to enter the buy-to-let market based on 100% occupancy of the property, then unless you are extremely lucky you will come unstuck at some point. Many experts recommend incorporating an average two months of non-occupancy when calculating your costs. Also, if you are employing a letting or property agent you will need to include their fees in your costs.
Insurance is vital. If you don’t own the property outright, your lender will insist that you have buildings insurance to protect their asset, and similarly you should seriously consider landlord’s insurance to protect you and your investment. That applies especially if you have a portfolio of properties, or if your property is one of a number in the same apartment block where there are other landlords. Indeed, you and your fellow landlords could pool your purchasing power to leverage a better deal from insurers. Buy-to-let insurance is a specialist product and some insurers in that sector offer complimentary add-ons such as tenant referencing services, which are very useful when it comes to assessing potential tenants.
Buy-to-let insurance can also protect you against owner liability claims, and no-one should seriously think about becoming a landlord without being adequately insured - both against liability claims and for protection of property.
Another important consideration is ensuring that you put aside a sum for regular and emergency maintenance. Things will go wrong and it is best to provide for it up front. Having adequate insurance will also help in emergency situations. Older properties generally require more maintenance so consider that before buying.
So, if you are thinking of becoming a landlord, make sure you assess all the risks, do your research and ensure that you are realistic about what to expect.
Got a Question? Ask.
Ask the community a question about this article:
Frequently Asked Questions
Do you know MRYM HOLDINGS LLC?
By: grandmashirley | 14-08-2008
What do you know about
MRYM HOLDINGS LLC, Shepherds Meadow, Eaton Bishop, Hereford. HR2 9UA United Kingdom, represented by their Legal and Compliance Director, Raymond Hibschmann, e-mail: Mrymholdings@yahoo.com ???
Parts Bank Storage
By: DB_Express | 14-08-2008
I currently own and opperate a courier service, document storage retrieval and digital scanning company in Maryland. I am looking to expand our storage business or add parts bank storage.
Can a landlord, their friends and family enter your property of many acres at any time? Do we have any rights or privacy?
By: jlcccfrazier | 10-08-2008
We live on 47 acres that is rented. It is mainly woods and the back of the property gives you access to a public creek. My question is, is my landlord allowed on the property anytime she wants as well as her friends, her workers, and her family? She has never came into the house, but people are coming while we are not here and hiking, fishing and soon to be hunting. What rights do we have. There is a locked gate at the entrance and she stated if it is locked and she needs in, she will just take the gate of the hinges and put it back. She will email me or call me usually, not always to tell me, not ask me, that so and so is hiking and driving through my yard to get to the fishing and etc... What are my rights?
I am going through bankruptcy (3 yrs) and my ...
By: Jody | 09-08-2008
I am going through bankruptcy (3 yrs) and my landlord has asked me to move, i was told that it is a state law that she cannot put me out until i have completed my bankruptcy course (7 yrs.)--Is this true?
Sister
Invasion of privacy?
By: bella6626 | 06-08-2008
Our landlord sends her secretary to our house every month to pick up the rent. When she visits, she inspects the house. She then sends a list of all the things she wants done. She has had us post "house rules." She also sends her husband over to inspect the house any time she wants to without notice. Can she legally do this? We live in Santa Clara County, California.
What security does landlord need to supply when ...
By: Elizabeth | 05-08-2008
What security does landlord need to supply when sending a repair man and no one is at the home/
Q&A Powered by:
Latest Real Estate Articles
The R.E.I. Revolution On The Internet
By: Damian Lanfranchi | 06/10/2008
Understand it and thrive. Ignore it, get left behind. I want to make sure that you truly grasp how the internet is revolutionizing the Real Estate investing world. It's absolutely critical to the success of your business. It's something that a lot of the Real Estate investors and gurus are missing the boat on when it comes to their real estate investing website.
Cyprus Property is Hot! But is it Getting Too Crowded?
By: Steven Clarke | 06/10/2008
The recent interest in Cyprus property has initiated a housing boom on the island. It doesn't matter where you go on the island, you can often hear the sound of construction in the background. Developers are scooping up land at an alarming rate trying to keep pace with the growing...
Dubai Property Strong Fiscal Growth
By: Editor-123 | 06/10/2008
Fiscal growth in Dubai is progressing by leaps and bounds and the real estate market is the major attraction of this place. In Dubai, you can find an endless list of buyers investing in real estate properties that are pocket friendly.
Different Kinds of Apartments and Flats – How to Find One That Suits You
By: aena18 | 06/10/2008
To have a beautiful home is everyone’s dream but in this 21st century to have your own home is not that much easy because now everything is available in high price rate. In this expensive world now, most of the people prefer apartments and flats as their home. Apartments have lots of advantages like there are lots of variety apartments are available in beautiful locations with affordable price rate.
Flower Mound Apartments
By: Alice Shown | 06/10/2008
If you are looking for an apartment as rent or you want to purchase a Flower Mound Apartment. Purchase Flower Mound Apartments in a planned manner. Consider the different factors. Do not take a decision without a planning.
Cedar Hill Apartments
By: Alice Shown | 06/10/2008
Cedar Hill is situated in a suburban area. Highways 169, 7, 394 and 494 can be easily assessed from the place. The building offers all types of facilities and services that can give you a comfortable stay.
The Inner Workings of Interest Rates for Owner Builder Loans
By: Chris Esposito | 06/10/2008
A good owner builder construction loan will have only one closing to cover the land purchase, construction phase, and conversion to your permanent financing. Therefore, the owner builder loan will have two sets of interest rates: one while you build, and one rate for when you move into your new home. Every owner builder should understand the inner workings of these rates when planning to build.
Information of Real Estate
By: rehan | 06/10/2008
Zammen-zaidad and propertycafeteria is a very nice and well portal and all the facilaties related to real esatate and property.
Finance 
