Renting out a second property is an excellent way of making money. There’s no denying that you’ll need a little money behind you. You’ll soon get that money back and more, though. Are you unsure whether you’re landlord material? We’ve got you covered. We’re going to take a look at what steps you need to take.
GET YOUR FINANCES IN ORDER
Buying a second home is easier than you might think. You are going to need savings behind you, though. Just like with your first property, you’ll need to put down a deposit. Take time to go through your finances and see if renting would make you money in the long run. There’s no point doing it otherwise! If you think you’ve got enough for a deposit, sit down with a mortgage advisor and see how much the mortgage would cost. Most of the time, it’s possible to join a second mortgage to your first. Look into your chosen rental area and see if the rent would cover that extra payment and leave you with some spare!
LEARN YOUR RESPONSIBILITIES
Landlords do have certain responsibilities. You’ll need to look into these before you move forward. As a landlord, you’ll need to be good at managing money. It’s your responsibility to pay for any damages or work that needs doing on the property. It’s worth setting aside the first few months rent so that you have a fund behind you should you need it. That way, you won’t have to pay straight out of your pocket. It’ll also be your responsibility to pay for letting agents and insurance. Bear in mind that it may be a while before you get back any money from your investment. Letting is a test of patience, but it will pay off if you give it time!
Your property won’t make you any money if you can’t fill it. When looking for a property, choose desirable areas. You don’t want to end up with an unrentable house. Researching the market will show where your best options are. You’ll also need to ensure your property is in the best condition possible for viewings. Decorate and sort any problem areas so that you give the best impression. It’s easiest to entrust letting agents with the job of finding tenants. That way, you save yourself paperwork and hassle. You also get to rest assured that everything is done properly. Unofficial arrangements can lead to significant problems. The more official you keep things, the better. You may be tempted to go with a friend and save yourself a little money. Going down that route could lead you to trouble later down the line, though.
Once you’ve put aside some money for repairs and paid out all your fees, it’s time to make money. If you’re lucky, you’ll have low maintenance tenants and no problems. If that’s the case, the money will start coming in quickly. As soon as that happens, all the work will seem worthwhile!