Starting up any business may seem like a daunting task, but choosing to start up a property rental business is a fantastic way to invest your money and to start making money too. With houses prices soaring, so many people are now opting to rent for longer periods of time, and so you will never be short of tenants. There are many benefits to running a rental business, however, when you do make the decision to invest in property and become a landlord, there are just so many considerations you have to make.
Firstly, sourcing the funding to start up a property rental business can be the hard part. It may be that you have inherited property or at least the money to invest in purchasing property, but unfortunately not all of us are that lucky. Although not everyone can afford to buy a property outright, buy-to-let mortgages are available, a mortgage specifically designed for those of you wanting to become a landlord and rent out property.
How to become a proper landlord
Choosing the right property is essential and can often be one of the trickiest steps in becoming a landlord. Location is everything, as is the quality and state of the property you choose. It may be that you are wanting to rent your property or properties specifically to students, in which case you must ensure you have certain clauses in your contract in regards to property damage, as this will help resolve any arguments in the future. If you are wanting to rent to professionals or families, their needs will be entirely different and so you will have to make decisions based on location and features the house has to offer, such as a garden and off-road parking.
Next you must work out who your most likely customer will be, or at least, who you are hoping to market your property towards. There are certain things you want from your tenants:
- Be guaranteed to pay rent on time
- They have a job
- Pay other bills
- Respect for neighbours
- Respect towards you
- Respect for the property
Although it is down to a tenant to make a decision on which property they want to rent, you have the right to choose too, after all, your property is your livelihood. There are plenty of guides online to help you make the right decision when it comes to picking your tenants, like this one from Homelet.
It’s unlikely that you don’t have household insurance in place to protect you and your home, and so you should also ensure that you have landlord insurance to cover you should there be any problems or major disasters with your rental property. It is unlikely that your standard household insurance will cover you as a landlord as there are several factors that wouldn’t affect you as a normal home owner. Hopefully you won’t need the insurance, but it’s reassuring to know it’s there to cover you if you do.
There are obviously a great deal more factors to consider when setting up a rental property business, but the factors mentioned above are a great place to start. If you do decide to take the plunge and start your own rental property business, good luck!