There are many advantages to becoming a landlord. From streams of current income to property appreciation, monetary gains can be plentiful. However, it’s also important to consider the investments involved.
Here’s a look at where to focus your investment efforts while fulfilling your landlord duties.
When you purchase a buy-to-let property, don’t make the assumption that it’ll sell itself. Periods of vacancy, during which time you’ll need to pay any mortgage or bills out of your own pocket, can seriously dent your income.
In any single year, up to 60% of landlords can face a void period – when the property sits empty between tenancies. It’s recommended that you set aside 20% of your overall property value in an emergency fund for times like this, but you can also help prevent vacancies by investing in solid marketing and the services of a good letting agent.
Here are some more of our tips to help you find the perfect tenant and keep your property occupied.
Landlord duties include the provision of safe, well-maintained living premises. Along with this responsibility comes the risk of liability damages should a tenant become injured due to failings in the property.
To begin with, a professional inspection is essential before making your purchase. If you've invested in a heritage property, this could include testing for harmful materials like asbestos and lead paint. Spending money to upgrade wiring, solidify foundations and replace a leaky roof may seem like a significant investment up front, but structural landlord maintenance like this pays off in the long run. These basic landlord duties should come before any smaller cosmetic repairs.
Apart from these health and safety issues, landlord obligations include most basic repairs. Budget for the cost of essential plumbing, heating and hot water issues including regular boiler repair. If you’ve purchased a property with older electrical appliances, it may be advantageous to install a new boiler or kitchen features that come equipped with a warranty. This also makes the property more enticing to potential tenants.
There are minimum energy efficiency requirements for landlords in many European countries. As part of your landlord obligations, you may need to spend money to bring your property up to a minimum EPC rating of E. There are many ways to boost energy efficiency, from filling cavity walls with insulation to installing double-glazed windows. This not only keeps you in line with legal landlord duties but also attracts a wide range of tenants. In most leases, the tenant is responsible for paying energy bills, so this provides them with plenty of incentive to seek out more efficient properties. This makes efficiency an investment that pays off for both parties.
In addition to saving for an emergency fund, investing in repairs and maintenance is a key component of landlord maintenance and obligations. Browse our tenancy-related articles, protect your property investment by planning in advance for these costs, and you’ll come out ahead.