As the housing market continues to stagnate, more homeowners are considering turning their homes into a rental property. They should think very carefully before making any decision. It may seem like the ideal solution if the property is not selling, but prospective tenants in today’s marketplace can be choosy, and if the property is not up to the high standard they are looking for, a homeowner could be left with an empty property, no income from it and a mortgage to pay.
The main factors that will determine whether a property is suitable for letting is its location, what type of property it is, and the condition it’s in. No one will want to rent a property that is in disrepair. A tenant will not settle for a badly kept property any more, this is because there is a lot of competition in the rentals market. Tenants are normally looking for a property which has a clean modern bathroom and a fitted kitchen. If the property is large with many bedrooms, close to transport links and close to a university or college, it will be very popular to the student market.
Letting an unfurnished property is popular but remember that even a property classed as unfurnished will very often be let with appliances such as fridges and washing machines. When it comes to the fixtures and the décor, never cut corners. Try and have higher quality appliances for a tenant, and update the bathroom fittings. It is vital that the property is in good condition when showing people around. Redecorate in neutral colours and replace old carpets and curtains. Having blinds instead of curtains will make a property more appealing to a new tenant. These small details will make the world of difference to a potential tenant. It is important to realise it is not the same as selling a property, where people will see the potential to change the home. They will be tenants and not owners, so they will have to live with the décor, and if they do not like it they will not want to move in.
Do some research and look into the local demand for similar properties and what the future is likely to hold. Never forget about buying landlord insurance for protection. Think about void periods and how any overheads will be covered. In reality when letting a property to make any money, at least 125% of the mortgage payments need to be received in rent. Otherwise it just won’t be a viable financial option