Four Tips to Help You Prepare for Becoming a Landlord in the UK
In recent years the cost of living in the UK has risen steadily, and for many people pay growth doesn’t quite keep up at the same rate. Not surprisingly, this has led to some individuals seeking a second (or third) job as a side hustle, while older employees may end up working past their retirement age to secure their finances.
While there’s no doubt that it’s getting harder to live on the margins of your income versus the cost of living, especially in expensive areas like London, there are many ways to add passive revenue streams so that you don’t need to invest so much of your spare time and energy into making ends meet. If you already own existing property, one of the easiest means of earning passive income could be within reach – all you have to do is prepare yourself for becoming a landlord.
In some ways, letting your property is just like any business venture. There are attractive upsides to go with certain risks – chief among them being the possible lack of tenancy. It’s not merely a simple process of having property valuation conducted by estate agents, and then bringing in tenants. In the capital, for instance, tenants will be eager to save on rental costs – a listing for a studio apartment or even a small room will field plenty of inquiries. But in outlying areas like Loughton, many prospective tenants would be more interested in bigger houses and a more relaxed lifestyle. Study the market to weigh the potential and feasibility of your business proposition.
Before you can let your property, there are many legal requirements to sort out; you may not even be legally permitted to let in the first place. Health and safety certificates (including fire escape routes and Legionnaire’s safety testing), gas and electrical safety, and an EPC (Energy Performance Certificate) are all necessary. On top of that, it’s your responsibility to make sure that any prospective tenants have submitted documentation proving they have the right to rent in the UK. Make sure you’ve covered the whole checklist before proceeding any further.
When you plan to become a landlord, you’ll find it very useful to adopt an entrepreneur’s mindset. Not only will this brace you for the many administrative tasks you’ll face down the road, but it also helps you treat your property as a true investment – something you can improve on to increase the return on investment (ROI), and market to bring in desired tenants. You could always pay fees to let an agency do the work, but a hands-on approach lets you take full control in every detail of the presentation, from the photography to décor and descriptions in online listings.
Many aspiring landlords envision having an ideal tenant when they first get into the business. In truth, a tenancy is never guaranteed to be smooth or stable. You could encounter problem tenants and have to deal with rent arrears, or shoulder the cost of repair and maintenance due to tenant negligence. Void periods are another frequent concern. Make sure you set aside an emergency fund to deal with unexpected expenses and tide you over through vacancies. Agencies can also help you with finding tenants in a shorter period and doing the necessary background checks.
Becoming a landlord might seem like a lot of work, but if you engage it with the right mindset, you’ll find that much of the effort is upfront – once things are in place and you get used to it, you’ll enjoy a truly passive source of income.