Becoming a landlord can be a very steady and profitable form of income – but it isn’t always easy. So to make the process simpler, Well Dunn Insurance has put together this handy guide to help you get the most out of your buy-to-let properties.
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- Choose the right property – We suggest that the best buy-to-let properties are new-build, two-bedroom houses and flats. This is because they are easy to maintain and are suited to the highly desirable ‘young professional’ renters, who tend to be more reliable.
- Choose the right location – Make sure the property you buy is in an area with ‘strong tenant demand’ i.e. people want to live there. A good indication of a high demand area is a higher than average rental rate.
- Get the right insurance – Insuring your property against fire, burglary and accidental damage is always important, but it is especially so if you are renting your property to someone else. Well Dunn Insurance specialises in residential let insurance, even if you are renting your property to tenants who are perceived to be high risk. Visit our Residential Let page for more information.
- Make sure it’s viable – If you’re thinking of getting into the buy-to let market, make sure the income you make from rent more than covers your mortgage costs. If you have to supplement the mortgage of your buy-to-let property with your own income, the property will end up as a liability rather than an asset – particularly if interest rates go up.
- Do thorough checks – A letting agency can do this for you, but they will charge you around 10 per cent for the privilege. There are a number of cheap credit search options available, as well as low-cost referencing services.
- Specialise – It makes sense to choose a niche – such as luxury or student let – and stick to it. Among other benefits, specialising in one type of buy-to-let property increases your chances of being approved for mortgages.
- Keep good records – Efficient bookkeeping and keeping good records are essential in the landlord business. Not only does it help you to keep abreast of changing regulations, but it will also make life much easier when you’re sorting out your tax.
- Create a detailed inventory – If everything is recorded in a comprehensive inventory, potential disputes when tenants come to move out can be avoided.
- Charge a deposit – Even if you’re renting your property to people you know or the potential tenants seem very respectable, always charge a deposit for your own security.
Visit our Residential Let Insurance and Property Management Insurance pages for more information.
