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Buy To Let: Everything You Need to Know

Buy To Let: Everything You Need to Know

The term “Buy To Let” refers to the action of purchasing a property with the purpose of letting (renting) it out as an investment property. There are several benefits to being a landlord – including a semi-stable income from renters and also a good profit that can potentially be made when the value of the property increases. Before you rush out and purchase a property with the intent to rent it out, here are a few things that you should be aware of.

Selecting Your Properties

When it comes to selecting your buy to let properties, there needs to be a solid amount of research and forethought done for each of your potential properties before you sign on for another mortgage.

  • Is the property located in a good area? A buy to let property that is located in a more run-down and high-crime neighborhood faces several challenges that could prove to be devastating to the budget of a landlord. From property damage to the increased potential for break-ins – while you might be able to get a better deal on the price of the house, it might not pay off in the long-run.
  • Does the property require extensive repair before it is livable? To avoid becoming a slumlord, and lose your tenants in the process, it is important that any repairs that the property is in need of can be realistically completed without putting you further into debt. Foundation, plumbing, electric, and roofing repairs can quickly rack up a huge total that may not make the property a financially sound investment for you. This is where it becomes key to hire a building inspector who has a solid reputation.

Before They Move In

Prior to your tenants moving in you need to ensure that everything in the home is in working condition; this not only helps to protect your investment but it also helps to ensure that your tenants have as easy a move in as possible. A checklist can help you to keep track of all of the items that need to be addressed prior to move in day.

  • All of the light fixtures must work and all of the electric outlets should be operational.
  • There should be no plumbing issues – this means that the toilets must flush, the faucets must run, there should be no drips or leaks
  • Be sure that the hot water heater is working correctly – a winter’s night without hot water could be very irksome to your tenants.
  • Ensure that pest control measures have been taken – no one likes to share their home with bugs or vermin.
  • Don’t forget to check the little things like the hardware in the kitchen and bathroom cabinets or that the windows open and close without problem.
  • The floors should be cleaned correctly – which means that carpets should be professionally shampooed, hardwoods should be polished and tiles should be spotless.
  • The entire home should be in tip-top shape – to allow tenants to move into a run-down dirty house is beyond unprofessional. It is also a quick trip to ensuring your status as a slumlord who will find his tenants less than concerned about the state that they leave the house in when they move out.

Selecting Your Tenants

When it comes to the selection of the tenants who will be living in your buy to let property, it would be prudent to do a bit of research into each potential candidate. One family rental homes are often very popular in good neighborhoods so you may find yourself inundated with candidates. Carefully screen each person, their credit history, their employment history, and any letters of recommendation that they may have.

Managing The Property

The job of a landlord may seem like it is never done – especially when there are multiple buy to let properties to manage. From repairs to dishwashers, broken showerheads, and exploding water heaters, cabinet doors that stick, a leaky roof or downed fence – every property owner should either have a full toolset or have a reliable and affordable handyman on speed dial.

When it comes to buy to let properties it is important that you are armed with the knowledge that will ensure your new foray into property ownership is successful!

Photo courtesy of Editor B.

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