Guide to investing in the property market and becoming a landlord - part 2 of 2
We’re continuing on from part 1 in our 2-part guide to investing in the property market and becoming a landlord, and this time we discuss the importance of accurately calculating your total costs and charges, we note some of the differences between a self-managed landlord and one who opts for a professional property management service and we highlight why you should ensure you take out suitable landlord insurance to protect your investment.
Accurately calculate all of your costs
Unless you’re in a position where you can buy your investment property outright, or have perhaps inherited a rental property, you’ll be taking out a mortgage to fund the purchase. You’ll need to comfortably cover this mortgage amount with the rental income along with any other charges you may include in the rental price (such as maintenance charges or any inclusive bills), so thoroughly research rent prices in the areas you’re looking at. Ideally you will have some funds left over each month once the mortgage and charges are paid so that you can build up a savings fund for any unforeseen costs that may arise in the future and to cover void periods between tenancies.
Self-managed versus property management services
Another thing you have to consider is whether you’ll manage the property yourself or utilise the professional services of a property management company. By managing a property yourself the tenants will contact you directly with any issues and you’ll take on the responsibility of rectifying any problems and dealing with all tenant queries. Any self-managed landlord should ensure they remain fully up to date with all legal changes and requirements across the property market and rental sector.
Alternatively, for those who don’t have the time or desire to manage the property themselves, many reputable letting agents offer a wide range of property management services. From sourcing suitable tenants, carrying out tenant reference checks, performing periodic inspections, managing rent payments, rectifying maintenance issues, taking control of the tenant check-in and check-out process and everything in between, a professional property management company can take the headache out of everything for a busy landlord.
Suitable insurance to protect your investment
The majority of the hard work may be in finding the right investment property, purchasing it and getting your first tenancy underway, but that isn’t all of the important work dealt with. Property insurance to protect your investment is crucial, so research your options and ensure that the insurance you take out is suitable and covers everything you need. Some lenders may even make it a requirement that suitable landlord insurance is taken out, but remember that during void periods you may need to adjust the policy to unoccupied property insurance.
Rent guarantee insurance is also another useful insurance that many landlords choose to take out. This sort of cover can be extremely helpful if you find yourself in one of the rare but unfortunate situations where tenants can’t or won’t pay the rent.
To learn more about how our expert lettings team here at CPS Homes can help you take your first steps towards becoming a landlord and secure the ideal rental property, as well as discuss the wide range of property management services we offer to many landlords across Cardiff, get in touch with us today. Call 02920 668585, e-mail enquiries@cpshomes.co.uk or pop in branch to see us face-to-face.
