Becoming A Landlord – Have You Considered Renting Out Your Property?

With 43.3 million Americans renting property every year, a number on the increase, it is no surprise that people are investing in buy to let properties. If you are fortunate to have the opportunity to buy a home, or already own a property that is suitable for renting, you should consider joining the growing number of people cashing in on this thriving market.

There are a number of advantages to renting out a property; however, it should not be jumped into without due consideration. With plenty to think about, you must do your research and decide whether the rental income is worth the obligations you will have as a landlord.

Income and fees

Most landlords use letting as a ‘top-up’ income, rather than as a substitute. Imagine that you wish to make $40,000 per annum. You would need to be making over $50k in rent, an equivalent of $4167 a month in order to cover costs and still make the money you desire. This is very difficult, unless you have a dream home hidden away, waiting to be rented. So consider a realistic figure you would like to make and speak with a financial adviser about how this would be possible. Remember, it is not just the short term rental income that you need to calculate but also the long term investment in the property.

Landlords fees must be considered, including the different insurances you may want. Not only do you need to ensure the property is insured, in case of accidents, but you will want to know that you are covered if your tenants are not able to pay rent. As a landlord you will have monthly outgoings, mortgage, insurance, taxes and potentially bills (if you decide to include them in the price of the property) and should not risk leaving yourself open to a month of no income if there are unforeseen circumstances that result in non-payment from tenants. Again, be sure to speak to a specialist or adviser who will be able to support you with insurance and other fees.

Consider whether the property is suitable

Is the property you are planning on letting the most appropriate style? Research the types of property that are needed in the area you are considering buying. The second most popular rental homes in the US are those for single parent families, buying property with 5 bedrooms may not be easy to let if you have a market whose majority are looking for only 2 bedrooms.

You need also to consider that the property you are buying is an investment, and will hopefully create a return if or when you decide to move on. The ideal property incorporates both a good return and a great rental opportunity. Speak with your agent about the potential for both when looking to buy somewhere new.

With lots to consider when buying a property to rent make sure you take time to find a perfect place, look into guides and research on what is required of landlords and seek help from your agent when it comes to finding the right property. The advantages of letting can be very beneficial and if prepared well can make a great second income.