Five Tips to Make Your Buy-to-Let Venture Successful
Many people get into the buy-to-let business because they think it’s an easy pension scheme – tenants pay the mortgage while the property increases in value. At the moment, low interest rates, a shortage of rental stock and high property prices mean the going is good, but it’s not a hands-off business. Would-be landlords should take heed of these tips.
Find a great letting agent
Properties need a lot of care, as well as tenancy agreements involving a lot of red tape and paperwork, like deposit protection, immigration checks and fire safety. Experienced letting agents will help you to navigate these rules, find you a suitable tenant and, in most cases, take care of the tenancy, including maintenance and repairs. You should pay between 10 and 20 per cent of the rent in agency fees for this service.
Buy landlord and rent guarantee insurance
You’re ultimately responsible for your property and your tenant, so buy landlord insurance, which will cover you for accidents and break-ins. Rent guarantee insurance covers you against non-paying and non-budging nightmare tenants.
Be on call 24/7
Buy-to-let isn’t complicated, but it’s a full-on job at times. You may go months with no problems and then everything happens at once – the boiler springs a leak, the dishwasher breaks and the drains overflow. You need to drop everything and deal with.
Find good workmen
You need to fix the plumbing ASAP, but you don’t want to pay double for the privilege. This means you need to find a good set of workmen, plumbers and electricians who have a good reputation among landlords. When you find one, pay on time, have a chat, send them a bottle of wine at Christmas… Then you won’t feel quite so bad dragging them out of bed at 3.00am in January to fix cracked pipes.
Maintain an emergency fund
Save at least 10 per cent of your payments for unexpected repairs and replacements, as well as to build up the equivalent of two months’ rent, council tax and other bills just in case of void periods.
