Other than the fact that being a landlord can be very hard work, there have been significant rises in the amount of part- time landlords over the past few years. People have decided that it’s time to boost their income by renting out their properties on the side, and we think you might want to consider it.
With a monthly average of £678 in rent, it’s not a bad idea to join the 7% of British adults who earn a bit extra every month for the bills. It’s no surprise that Landlords in London are earning the most from this, with a healthy profit of about £1000 extra a month.
When you take into consideration the maintenance, buildings insurance and management fees, you’re looking at earning about 40% of that total income. So depending on wherever you’re living in the country, it’s not bad for a part time wage.
For some, it has become common to hold onto their old house when buying a new property. Which means they might as well earn a little from renting it while they decide what to do. The majority of these part time landlords never intended to begin renting out their old homes, however now seem to benefit very much from it. You may find yourself as an accidental landlord yourself.
- Inherited Property
Usually due to sad circumstances, people are left with a property which they are finding difficult to sell. Sometimes people find it hard to let go of a loved one’s home so they decide to rent it out without an intentional profit so that it can sustain itself.
- Meeting a new partner
In many cases, new found love can leave on person’s house being left empty. It only makes sense to rent it out and earn a little bit extra until you decide what is going to be best in the long run.
Settlement allows one partner to downsize and use surplus monies to purchase a buy to let property so that income can be maintained.
- Low investment return
Because of the record low returns on any investments since 2007/ 2008, individuals are seeing Buy to Let property and consistent returns as a more attractive proposition. This is not only witnessed by individuals moving into Buy to Let, but also the large amount of institutional money which is finding its way into this market place, be it for individual properties or block of student let properties.
Likewise with pension investments, individuals have been disappointed with the returns over this same period and are not directing surplus capital into the buy to let property market.
Can you imagine the benefits you could have if you planned it in advance? It can be a great way to help with the costs your previous home which you couldn’t sell.
It is important that you carry out proper research when considering something like this. As with everything, there are procedures. Before considering this option there are a lot of risks and hazards you should research before diving in at the deep end.
As specialist insurance brokers for landlord policies, we are well aware of the problems which landlords may come across. These include problems with tenants, costs of damages and loss of rental income. It is important you get the correct insurance cover to protect you from these risks.
Insurance policies to consider-
As a landlord you are required to maintain the buildings condition including the fixtures and fittings. This means that any fitted bathrooms and appliances which are provided by yourself are your responsibility and should have safety checks carried out on therm. If you are going to be providing any furniture to be used in communal areas, you may want to consider extending your policy to cover contents. Your tenants will be required to protect their personal belongings with contents insurance in the event of theft.
In the event that your tenant has stopped or cannot pay their rent, you should have already had Rent Guarantee Insurance in place. This will allow you to claim back a specific amount of months’ rent, specified on your policy.
If you have no other option than to take legal action on your tenant, you will have had to take out Legal Expenses Insurance as an extension top your Rent Guarantee Insurance. This should meet all solicitor and court costs accruing.
There are many checks that you have to take into consideration to ensure the safety of the tenants in your home, these include gas and fire safety checks. If you do not have safe facilities or the correct licenses for your property type, you could face criminal convictions.
If done correctly, being a part time landlord can be a great income booster and give you a lot of experience. It can also give you a career to fall back if something should happen to your current job, such as redundancy. You can start building you reputation now as a part time landlord and learning all there is to know by becoming an accredited landlord with the FCA.
If you have found this article helpful, you will also be able to take away lots of landlord tips from Being a Successful Landlord. Our blog has its own Landlord section to keep you up to date with landlord law and news.