There are many ways to become a landlord. Perhaps you have inherited a property that you want to keep but not to live in or maybe you have your eye on a property that you wish to acquire with a view to rent out. If you are considering becoming a buy-to-let landlord, here are a few things you need to know.
Being a buy-to-let landlord comes with a fair number of obligations and responsibilities. These include tenancy agreements, tenancy deposits, repair, maintenance and more.
People may have their own reasons, but typically, buy-to-let is an investment. While some people invest their money in the stock markets, others choose to invest in property, which requires different knowledge and skills.
Choosing to become a landlord is a big decision, with great benefits as well as an array of challenges that need to be considered. It’s a big responsibility, whether you own one property or several, so gaining some insight into what you can expect is essential.
As a buy-to-let investor, you will either be relying on capital growth (increase in the value of the property over the medium to long term) or rental yield (income generated from the property expressed as a percentage of the property value). You’ll need to work out which of these has the greater advantage.
Rental Yield – The money you make from the rent you charge to tenants. You’ll need to pay income tax on this money.
Capital Growth – Money you make by selling the property at a higher price than you paid for it. You’ll need to pay capital gains tax on this money.
You can start to search in the same way as you would search for a home for yourself – by speaking to estate agents and searching online.
The features you look for in the property will probably be different to what you’d look for in your own home, and this depends on whom you plan to let to – a decision you should make before buying.
Different demographics have different requirements. For example, students want properties in cheap but vibrant areas with good public transport links to university. Professional sharers often look for equally proportioned bedrooms. Families need good local schools and safe roads. If you plan to rent to multiple people in one property, you also need to be aware of the government’s & relevant local authority’s rules around houses in multiple occupation as there are certain requirements, like minimum bedroom sizes.
Once you’ve found the right property, speak to a buy to let mortgage specialist in our team who will provide you with the best buy to let mortgage deals which are available to you.
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