It is quite exciting to become a landlord. Not just because you get a consistent source of income, but it gives a sense of pride also.
However, there is a word of caution also. Before handing over the keys to your first tenants, spend some time in understanding the responsibilities of a landlord.
The law of the land imposes several rules, regulations, and legal obligations. By factoring the risks and meeting these obligations, you can get financially benefited.
The number of potential tenants is touching new peaks with every passing year. Hence, it opens new avenues of generating a passive income stream.
Investing in a property is a long-term decision. You can either rent out an existing property and become a landlord or you buy-to-let for renting it.
Which path to choose is a tricky decision that needs the advice of an expert.
Two ways of earning money as a landlord
• The rent received minus operating costs such as repair and maintenance and agent fees.
• Capital growth, i.e., property valuation increase with time.
If the property is in a place that shows remarkable growth, then the capital growth is far more than the income from rent.
Even if the valuation doesn’t go exceptionally high over a period, you get a steady income every month, year after year.
Know whether you can rent out the property?
Before you rent out the property, check the legality of it. Are you allowed to do it? Are you a legal owner of it? If not, then you need the permission of the owner to sublet the property.
If you are the owner, then check the landlord insurance and mortgage compatibility. It is even more needed if you didn’t purchase the property as the buy-to-let option. It is at the discretion of your lender whether to allow or not.
Are all legal requirements fulfilled?
To prove that your property is safe for tenants to live in, there are certain norms to be fulfilled. The property is evaluated on standards that must meet from the legal perspective.
• Your property needs to pass health and safety checks. It should be declared electrically safe as well.
• Acquire EPC or Energy Performance Certification which highlights the energy use and cost of the property. It is crucial that an accredited assessor inspects the property.
• The gas safety certificate is also an important thing. It is an annual safety check to certify that every gas equipment in the house meets safety standards. A registered gas safe engineer performs the inspection. Give the copy of it to the tenant at the time of possession.
Even if your property meets all the standards mentioned here, it is not an easy task to attract tenants. At times, you need the help of an expert.
Hiring an agency could be a better choice. Thus, you get help for rent or deposit collection, maintenance, and day-to-day management. It also helps in taking the landlord insurance which is useful from the tenant’s perspective.
There are expert property management consultants in London to hire.