subject: Learning the basics of being a landlord [print this page] Learning the basics of being a landlord Learning the basics of being a landlord
If you are just starting out in property investment or are considering becoming a professional landlord, then there are a number of tips/ techniques you can utilise to ensure that it is smooth sailing.
Preparation
The saying is preparation is key' and it is true of property investment. Despite what you have been led to believe, not every property can be transformed into a cash flowing asset. Tenancy demand, rental returns, property type and even property location can influence the profits you can generate.
For this reason, before you invest in a property, ask yourself the following questions:
Has it got the tenancy demand? Go to your local letting agents and find out the tenancy demand of the area. If it is strong, next find out which property types (flat, terrace, semi-detached or detached) are proving more popular amongst tenants
What rents does the property produce? Using the best BTLs calculate how much interest you will be paying on each property. Next minus these repayments from the properties overall monthly rental income. If you are left with more than 300 a month after these deductions then the property is profitable.
Get a loan
Buy to let properties work differently from your average mortgage. Whereas when applying for a mortgage banks will base their loan amounts on your salary, with buy to let residential properties this decision is based purely on the properties ability to generate 125% of its mortgage payments through rent.
And this information can prove to be very useful when assessing your potential property investments. Using this statistic you can effectively increase your chances of receiving that loan and essentially invest in properties which are bigger and better than your salary could ever have mustered.
Investment strategies
If you are familiar with property investment then you will know that not all investment strategies will work in all economic climates. No Money Down, No Deposit Down, All Money Back each of these strategies works strongest in different environments.
Because of this, it is essential that you equip your property portfolio with at least 5 proven investment strategies that will continue to work no matter the financial conditions.
Get a broker
Unless you have got experience negotiating property deals, we thoroughly recommend employing a broker to help negotiate property price discounts and limit the amount of finance you have to invest in the property i.e. deposits, stamp duties and legal fees etc
Resources
As a professional landlord it is essential that you equip your property arsenal with plenty of landlord resource forms. Not only can they help you to ensure that you find quality tenants, but they can help protect you in the event that your tenant breaches their tenancy.
The important ones to remember are:
Assured Shorthold Tenancy agreement within this one contract you will be able to determine yours and your tenants responsibilities as well as utilise clauses that will enable you to raise rents and protect your property from rent arrears, damages and public complaints
Tenant Guarantor Form as your tenants guarantor they are legally obligated to cover any costs incurred by your tenant should they fall into arrears or cause damage to the property
Property Inventory Form this form is useful for preventing disputes over damages done to the property. By completing this form and collecting photographic evidence of the condition of your contents on the day your tenant moves in; during their tenancy and on the day they move out, you can track any missing items and negotiate repairs/replacements without disputes
Request for Tenant References this one is particularly useful for helping you to assess the suitability of your tenants before they move in. With this one form you can learn about their credit history, behaviour as a tenant in the past and their character.
Section 8 this notice is particularly important for evicting tenants who are in breach of their tenancy agreement
