When buying a house or apartment with the intention of letting it out to tenants, you may well have in mind one thing only – that day every month when the money transfers into your account and, for the privilege of letting people live in a property you own, you make a profit. However, if you are the landlord of a rented property, life is very rarely that simple. It is not necessarily a bad life at all, but it pays to be realistic at these times. If you are prepared for what you will face, it is always much better.
Often, you will go for months without hearing from or about your tenants. The principle of “no news is good news” is one that many people subscribe to. There is good reason for this. Mostly, people just want a quiet life and will go about their business in a way which does not infringe upon anyone’s time. However, if there is a problem which could threaten the liveability of the property you are renting out, then it can end up costing you money and ruining the living conditions of the people living there. It is essential to keep in contact with tenants.
Having a good relationship with your tenants is something that will pay off. You don’t need to send them a Christmas card every year or attend their kids’ ball games, but being prepared to meet them halfway on certain matters will benefit you in the long run, as they are prepared to continue paying the rent, and will leave it in a good condition when they vacate
One of the most popular ways of making money in the past few decades has been the boom in buying houses in order to then let them to tenants. Some investors do this by purchasing a house and then redeveloping it into apartments. Others simply buy the house and then let it exactly as it is or with minor renovations. Either way, it is something that a lot of people have chosen to do, and it can be profitable.
Think about it this way – when you look at the amount that is charged for rent on a property, it is almost invariably a lot higher than you would be paying monthly on a mortgage if you had taken one out and bought the property. Therefore, there is a potential profit margin in doing the latter and letting other people do the former. Just bear in mind that the mortgage is not the only cost you will be paying as a landlord.
If you are looking to buy to let, then it is essential that you scrupulously check the property for any necessary repairs, and that you allow money for those repairs should they be needed. You will also potentially have a higher level of tax to pay on income from rent, and you may also be expected to pay maintenance costs on the property depending on the level of rent you are charging. However, if you can get the costs to stack up in your favor, there are always people willing to rent so it can be a big money maker for you.
It is important when renovating a house to bear in mind that there is a big difference between a loose plan and a final certainty. You may have ideas about what the house is going to look like and how much money it is going to make you, but those ideas can only become reality with a lot of work. Don’t get carried away by the seemingly foolproof nature of your plans.
You should always make sure that you “comparison shop” every decision you make. You may need to pay builders and other workmen to do the renovation work. You should consult as many different companies as you can before contracting one to do the work – check them for references and price. Do the same for materials and for any other service that will be required.
It can be tempting to walk away from a development, even temporarily, because you have just reached a point where every decision is difficult and you are second-guessing yourself on everything. You may just want to give up. At these times, you need to show steely reserve and keep in mind that time is very nearly equal to money.
Finally, you should always be ready to take the opinions of others on board. By going with your own gut on every decision you make it is possible to develop tunnel vision. You don’t have to run every decision by someone and agree with all of their points, but it can be useful to ensure that you are looking at the plan from a more detached angle – as this is what potential purchasers will be doing