Are you prepared? Letting to move or turning your main residence into an investment can be attractive. At the same time whether you take a DIY approach or rely on an agent, there’s plenty that can go wrong. But the rewards are obvious. Aim to maximise the rent for your market. A good return means cash flow will pay for repairs and improvements further down the line. When you come to sell, you’ll no doubt want to refresh the property.
Putting strangers in your own home can seem daunting. But following on from the credit crunch, more homeowners are at least considering it. If you’ve no previous experience of being a landlord it’s twice as hard to let out the property you’ve been living in. Whether you’re moving by choice or not, we all have a lot of emotion tied up in our home. It’s also true letting is increasingly regulated. Whether you let one property or 10, the same legislation, subject to location and occupancy, will apply.
First time landlords have to rely on their own information or get outside help. Possibly from a reputable letting agent. But that’s no guarantee things will go smoothly. Agents earn commissions for finding tenants and/or management. As any experienced landlord knows, agents and landlords interests don’t always coincide.
Broadly speaking if you’re going to let your property there are many pitfalls to avoid. You also have to comply with the relevant legalities.Location plays a role since there is more regulation in Scotland compared to other parts of the UK, where landlords must be registered and the Scottish Government is applying wholesale reform.
Inexperienced landlords can be tempted to let their property on the “QT”. Perhaps let it to a friend or relative without a formal contract. Drawing up a formal agreement is always advised. If the property is going to be financed using a Buy To Let mortgage you would actually be in breach of the terms without contracts and by letting to a friend/relative. Letting, is, after all a business. You need to be business-like.
Appearances are also important but perhaps not in the way you might think. You may have a lovely home. Furnished just so. But, and here’s the hard part, it may not be furnished in a way that will maximise your income or appeal to tenants. Not all properties rent equally easily and different properties attract different kinds of tenants. Will you be able to deal with the kind of tenant you’re likely to get?
You may also wonder if you definitely need a letting agent or whether you can manage on your own. Certainly some factors point to hiring an agent. One of these will be distance. Long distance letting without an agent isn’t usually practicable.
It’s also worth mentioning that owner – landlords can actually put tenants off! Tenants can feel too inhibited. On the other hand, the property may well be in better condition than many investment properties. It’s swings and roundabouts and depends on how you present yourself and your home to prospective tenants.