If you have decided to buy a property with a view to renting it or you have inherited one and wish to rent it out there are a few things that you should be aware of first. Being a landlord is a sizable responsibility that may require a lot of your time. You will need to deal with requests from the tenant’s, once you have found them, plus you will need to deal with any land and estate management issues that arise.You will also want to consult with an Accountants Chippenham way such as https://chippendaleandclark.com/ if you plan on renting property as a part of a business venture. What else do you need to do?
- Consider the services of a Letting Agent. A lettings agent will find a tenant, deal with the finances and the credit checks. As an ongoing service they will also deal with any communication with the tenant meaning that you do not have to. There is a cost for this.
- If you are seeking to get a mortgage on the property lenders will only lend if it is self sufficient. In other words the rental payment must cover the mortgage payment by a considerable amount.
- If you want to raise a mortgage on the inherited property without a mortgage it is treated similarly as a house purchase and not as further borrowing application.
Setting the rent and keeping tenants
Work out how much rent you need to charge to cover your costs before anything else. If the property has a buy-to-let mortgage, the lender will want to see that the rent covers the repayments with room to spare, and if your figures do not match theirs, they will not lend.
Decide too whether to use a letting agent, and factor in what it costs. Doing it yourself means finding tenants, running checks and handling inventories and inspections, which can be complicated.
Once you have good tenants, try to keep them for as long as possible. Every time one leaves you face the cost of finding another, and while the property is empty no rent is coming in to pay the mortgage. Lenders may ask how you would cover that gap, so it helps to have a tenant lined up before you apply. Given all this, it is wise to speak to a financial adviser before committing.
