Becoming a landlord can be an extremely rewarding experience both for your bank balance and your lifestyle. However, there is much to consider before taking the plunge.
There are many reasons why people choose to rent. It offers a relatively speedy solution to accommodation worries come the end of a marriage. It offers our workforce and student population the mobility and flexibility often required in short term relocations. For the very many individuals and couples struggling to get on the property ladder, it offers a temporary opportunity to get some privacy, play house and learn how to live together.
This demand also offers those who own property and who perhaps might be looking for ways to top up their savings in the current climate of uncertain pensions, and volatile stockmarket, a opportunity to open up a fresh revenue stream as a landlord.
It sounds so easy on paper. You provide a home for people needing somewhere to live and they pay you rent for the privilege. Sadly nothing that involves human beings can ever be quite that simple, and while buying a home to let and becoming a landlord can be extremely lucrative if done professionally, all too often ill-informed dabblers can come dangerously unstuck.
There are three ways to become a landlord:
Each approach has its plus points. If you delegate to a property management company you also delegate the day to day business of dealing with tenants, ensuring rent collection, and finding new/researching new tenants. However, this will cost you.
If you decide to adopt the hands on approach then all the financial rewards are yours to keep. But you will probably, depending on the age/state of the property, quality of the tenant, and the state of the market, find yourself devoting far more time, energy and emotion on maintaining the property than you ever intended.
If you're going to rent out part of your home, however, then you don't have much choice but to be the hands on type. Again, with the right lodger/tenant this can be a very satisfactory arrangement. If it all goes wrong, however, you may find the trouble a little too close to home.
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