People who buy a property
for buy-to-let purposes need
to be aware of the costs
involved in having a rental
property and the
responsibilities that go with
owning a property. This
article will give you an
overview of the type of costs
that can be incurred.
Buying a Property
When you make the decision
to buy a property for rental
purposes it needs to be taken
into consideration that there
will be expenses that need to
be paid whilst the property is
being rented out. Often a
landlord will buy a property
and have a mortgage that
doesn't take this into
consideration. This can lead
to big problems if the
property needs to have any
maintenance done or work
during the period of a
tenancy.
Costs that can be
incurred
Some costs that can be
incurred during the period of
a tenancy have been listed
below. These costs can vary
depending on the amount and
the quality of the work that
is to be undertaken, plus
whether the work is being
carried out by you or by a
contracted party.
Problems that
regularly come up when renting
a property are below.
Boiler Repairs Central
Heating Problems Redecoration
Painting Interior and Exterior
Replacement of Carpets
Electrical goods need
replacing washing machine,
fridge, freezer etc Garden
Fencing Drains and Guttering
Door Repairs/Lock Refits
These are just some of the
common problems that can occur
at anytime throughout a
tenancy. Before undertaking a
buy-to-let mortgage or
becoming a Landlord of a
property it is very important
that the yield made from the
property covers the mortgage
and also leaves a contingency
in order to make repairs.
Budgets and Rent
Values
Landlords who are looking
to rent a property for the
first time may be unfamiliar
with the rates and the amount
rental property can yield. It
is important to research the
market; there are a number of
ways to do this. One way is to
look into what other similar
properties are achieving for
rent values in the same area.
Look in the local papers to
get an idea of rent values of
current advertised property.
Check out the major sites on
the internet that are
advertising a range of
property, try to use a rental
price index to get an idea of
property values and average
rental prices. A link to the
RRPI (Residential Rental Price
Index) has been included in
this article.
Average Rental
Property Prices
Make sure that from the
yield gained from the property
that the extra income is saved
in a bank account as a float
in case there are any major
problems that need paying for.
A lot of jobs that do come up
can be carried out by the
Landlord themselves. However
if you are a landlord it needs
to be considered whether this
is a viable option for you, do
you have time to be fixing
problems in the property or
are you better off giving the
responsibility to the property
management company. After all
it is part of a full
management service that
repairs are undertaken by the
letting agents if you are on a
full management contact. If
you are not interested in this
and are going to look into
just a tenant find then make
sure you do have the time to
take care of the property.
In summary the most
important factors to remember
before buying a property is to
ensure that you are aware of
rent values, have a
contingency, decide on what
type of management service you
require if any, remember that
the ongoing maintenance of a
property will result in
smaller bills in the long run.
Written by Chris Courtis
Chris Courtis is the
co-founder of the Rentright
Property Rental Portal and has
years of experience in the
rental market. Rentright has
property for rent advertised
by local letting agents
throughout the UK
Rentright
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