When buying a property, it’s becoming more and more common for the first purchase to be not a live-in home but a buy-to-let project. People want to see what kind of money they can start making by appealing to the growing market of others looking to buy accommodation. There’s money to be made, undoubtedly, but there’s also significant potential to incur some losses that can make the whole project seem like a waste of time. If you want to make your buy-to-let project a financial success, there are a few things you need to put at the top of your list of considerations.
Do the math
The gain you make from the home needs to be in balance, if not greater, than the amount that the property costs you. Some people make the mistake of only using the mortgage payments the basis of rent decisions. But you need to think about all the costs of the home. Take the year’s mortgage payments, add the insurance and the tax, then divide it by twelve. Make some consideration for maintenance costs if they’re under your responsibility in the tenancy agreement. If the home comes with its own appliances, then factor in the maintenance costs for those, too. Finally, consider any relief you might be able to get with those costs. It’s possible for landlords to claim expenses on some of the management of their property.
Get a team who knows the market
While they shouldn’t be used as an option to pass off every responsibility in regards to being a landlord, there’s a lot of help available that can help you make your property significantly more profitable. One of the best use of property specialists is their attention on and knowledge of the market. Having a vacant property is tremendously costly for a landlord, and the marketing scope and techniques of a property management company can really help minimise downtime between tenants. Not only can the right choice help you find a broader range of possible tenants, but they can help you ensure that your property is presented in the best possible light through video advertising and virtual house tours.
A property management team can help you find tenants and meet all your responsibilities as a landlord with little fuss. But if you want your tenants to stay for longer, then you need to get a little hands-on yourself. Just as landlords want responsible tenants, tenants want engaged landlords. You can make it clear you’re friendly to a long-term arrangement by going the extra mile to answer maintenance problems and to provide furnishings. You might even consider offering wiggle room on some of the house rules (like pet policies, for instance) for the most reliable of tenants. Get to know your tenants and their needs, not just how much you should expect from them every month.
A keen grasp on the finances involved, the demand in the area, and the tenant-landlord relationship is essential to keeping your buy-to-let property a success. Make sure you have a firm knowledge of them before you make any decisions.