There is no such thing as an average landlord; no two sets of circumstances are ever identical. You may already own a property and simply wish to let it out for a couple of years while you take a sabbatical, get posted overseas or temporarily move job location. You might be in the fortunate position of moving home without having to sell your present home. Or indeed, you might be setting out to purchase a property with the express intention of letting it out as an investment.
Difficult though it may sometimes seem, every landlord should approach the project in as dispassionate a manner as possible. Resolve to make every future decision in a business-like manner, first taking advice where appropriate. Try to ignore any emotional concerns in this process, especially when considering letting out a property in which you have personally lived.
Always remember that while it remains your property, it will now become your tenant’s home. They have legal rights with which you need to be conversant, expectations which you need to keep in mind and sometimes requirements with which you will need to empathise.
Landlords that succeed are those who make unemotional decisions based on current market conditions and thorough research.
1 You live in a property and wish to let it on a temporary basis.
If you currently live in a property you wish to let out and to which you intend to return, you may experience a few sleepless nights. You have possibly spent considerable time effort and money in getting your home exactly as you want it and now you are going to let it to someone you don’t know and possibly won’t even meet.
In the industry, you are often referred to as a “reluctant” or “accidental” landlord. This isn’t a derogatory term; more a pretty accurate assessment of your state of mind.Truth be known, you might not actually want to let your home out; this course being merely the lesser of two evils.
You may be understandably anxious. Under these circumstances, your primary worries are likely to be whether you will be able to get your home back in a timely manner and the condition in which the property is returned to you.
In fact, a tenant is more likely to take care of a well-presented and obviously well-loved home than one which has had a succession of tenants over a prolonged period of time and which is owned by a landlord seemingly unconcerned about the state of his property. It is easy to imagine how a tenant will eventually decide that if the landlord doesn’t put himself out for basic maintenance and décor, then the landlord probably won’t mind if there are a few more marks on the walls, or the carpet is not quite as clean as it was when he moved in.
Finding a tenant for a property in fabulous order is actually relatively easy, since a quality applicant will probably not consider a sub-standard property. You have in effect, set your stall out with quality merchandise and, with a price to match, you will be very likely to attract like-minded individuals, appreciative of your efforts and prepared to take good care of it.
Nonetheless, there is no guarantee that when you return, your property will be just as you left it. Assume that there will be some decorative works required when you return and that your garden will no longer be up to Chelsea Flower Show standards. If you leave a property furnished, especially after a lengthy period of time, you will undoubtedly have lost knives and forks, gained a can-opener or two, find an entirely different toaster on the work-top and be unable to entertain friends with matching tumblers.
The income you receive in rent, however, should go a considerable way towards lessening the blow. But, more importantly, you haven’t had to sell the property, which is often the alternative.
An accidental landlord is possibly someone for whom creating the ideal letting proposition will prove difficult. There is invariably less enthusiasm for the expense associated with changing a bathroom, a kitchen, carpets, or for carrying out re-decoration works on a property in which you have lived, when the only person to benefit from any such changes is the tenant. Whilst this is understandable, offering a tired property will invariably result in more difficulty in your search for suitable tenants and it may be that anticipated rental returns are reduced.
2 You’re moving away from the property permanently.
If you currently live in a property you wish to let out and to which you never intend returning, then from the very minute you decide to go ahead, start treating your home as a bricks and mortar investment. It is simply a business.
Rather like the owner-occupier who will one day return, you might have spent considerable time effort and money on getting your home just-so. In your circumstances, however, it is easy to treat this as a feature with benefits to potential tenants which may attract a better tenant or higher rent.
A rental property is an investment for which you will have expenses, income, and in the long term, capital appreciation. Treating your property in this manner will potentially save you an awful lot of future heartache.
3 You’re buying a property specifically as an investment.
If this is simply an investment, then your approach is perhaps easier than that of an owner-occupier. It is still important, however, to conduct thorough research into the local market and to buy the most appropriate property available to you.
Take a look at various different properties, even if you have no intention of buying them. This will give you insight into what else is available. Some of the properties you view will be bought by investors and will in effect be your competition. Have a word with a letting agent and ask to see some of their properties, to see exactly what the good, bad and indifferent landlords have as their offerings.
Elsewhere in this blog, we cover some of the specifics to be borne in mind when choosing an investment property, but feel free to contact us if you need advice.