Becoming a landlord can be an enticing prospect in these times of ever-increasing rents. But those who have been in the business a long time know that things can change very quickly in the rental market. New landlords who want long-term success (and presumably, that’s most of them) would do well to use the experience of long-term landlords to help ease them on their way.
Ignorance isn’t bliss
Unfortunately, not all new landlords are willing to do proper research into the market before they jump in, and so fail to find and heed the advice of others that could help them. Some of these landlords will end up struggling when they could have succeeded. What are the most important things for new landlords to know about?
Costs
This is something we’ve blogged about before, but it is worth repeating. Landlords must make sure they take into account all of their costs when planning, not just their mortgage. This particularly applies to ‘accidental’ landlords (those who let their home because they cannot sell, rather than because they want to be landlords). They have a tendency to think that all they need to do is cover their mortgage, and can easily end up out of pocket as a result. You need to have funds set aside for maintenance and repairs, landlords insurance, tax, potential void periods, potential arrears and evictions, and usually letting agents fees. Every property and every situation is different: ideally new landlords should find local landlords’ with a similar property to compare notes.
Networking
That brings us nicely on to the subject of networking. Usually, someone starting a new job will get training. Landlords don’t. It is well worth joining national and local landlords’ organisations to help get to know others and learn from them. Often, they will run training courses to help new landlords get to know the rental market and will advise landlords who run into problems. Membership of these organisations can also help win new tenants, who tend to be reassured by landlords who are part of a professional body.