Are you thinking about becoming a landlord? It’s a great way to invest in property and earn rental income. And with the right planning, it can be a very profitable venture. However, today’s property market is unpredictable, so it’s important to do your research before making any decisions. Here are a few things you should know about becoming a landlord in 2022.
What you need to know when becoming a landlord?
The first thing you need to know is that the rental market is very competitive. There are more people looking for rental properties than there are properties available. This means that you’ll need to be prepared to offer competitive rates in order to attract tenants. You should also be prepared to offer incentives, such as discounts on rent, in order to make your property more appealing.
Another thing to keep in mind is that the law is changing. In 2022, a new set of regulations called the Tenant Fee Ban will come into effect. This means that landlords will no longer be able to charge tenants fees for things like referencing or administration. This could make it more difficult to find tenants, as people will be looking for properties that don’t have these additional costs.
Finally, you need to be aware of the risks involved in becoming a landlord. The most obvious risk is that you could end up with problem tenants who don’t pay their rent on time, or damage your property. There’s also the risk that you could be sued if something goes wrong with your property, such as if a tenant has an accident and blames it on your negligence.
Can I rent out my house on a normal mortgage?
Yes, you can rent out your house on a normal mortgage, but there are a few things to keep in mind. First of all, most mortgages have a clause that prohibits landlords from renting out their properties. This means that you’ll need to check your mortgage agreement to see if this is the case.
Secondly, even if your mortgage doesn’t have this clause, your lender may still require you to get permission before renting out your property.
It’s also worth noting that if you do rent out your property, your mortgage payments will likely go up. This is because landlords are considered to be higher-risk borrowers than owner-occupiers. As a result, lenders will usually charge higher interest rates to landlords.
What are the legal requirements for landlords?
Before you can start renting out your property, there are a few legal requirements that you’ll need to meet. Firstly, you’ll need to obtain a buy-to-let mortgage from a lender. This is a special type of mortgage that’s designed for people who want to rent out their property. You’ll also need to have your property insured against things like fire, flooding, and theft.
Another legal requirement is that you must carry out a risk assessment of your property. This is to make sure that it’s safe for tenants to live in. For example, you’ll need to check for things like mould or damp, and make sure that there are working smoke detectors installed.
You’ll also need to get a gas safety certificate for your property. This is to ensure that all the gas appliances in your property are safe to use. And finally, you must register with your local authority as a landlord.
Is landlord insurance required by law?
No, landlord insurance is not required by law. However, it’s highly recommended that you get it. Landlord insurance will protect you from any financial losses that might occur if something goes wrong with your property. For example, if your tenant doesn’t pay their rent on time, or if they damage your property, you’ll be covered.
Similarly, if you’re sued by a tenant, your landlord insurance will cover your legal costs. So it’s well worth getting some quotes and seeing how much it would cost to insure your property.
What are the standard features of landlord insurance?
Most landlord insurance policies will cover you for things like loss of rent, damage to your property, and legal expenses. They’ll also usually provide some level of personal liability cover, in case you’re sued by a tenant. Some policies will also offer extra features, such as cover for tenancy deposits, or protection against malicious damage by tenants.
Buildings and contents cover can be a vital feature as well, as it will protect your property against things like fire, flooding, and theft. Some policies will also cover you for things like loss of keys, or subsidence.
What are the costs of being a landlord?
The costs of being a landlord can vary depending on a number of factors, such as the size and location of your property. However, there are some common costs that you’ll need to budget for.
Firstly, there’s the cost of the mortgage. If you’re taking out a buy-to-let mortgage, you’ll need to factor in the interest payments. There’s also the cost of insurance, however this can be mitigated by choosing the most competitive quote from a specialist broker.
Then there are the ongoing costs of maintaining your property. You’ll need to budget for things like repairing and replacing damaged items, as well as decorating and cleaning between tenants. If you have a garden, you’ll also need to budget for things like lawnmowing and hedge-trimming.
And finally, there are the letting agent fees. If you’re using a letting agent to manage your property, you’ll need to pay them a commission, which is usually around 10% of the monthly rent.
What are the benefits of being a landlord?
There are many benefits to being a landlord. Firstly, you’ll have the potential to earn a lot of money. If you charge a competitive rent and look after your property well, you could end up making a very healthy profit.
Another benefit is that you’ll have the security of knowing that you have a regular income coming in. This can be helpful if you’re planning on using the rental income to help pay your mortgage.
Finally, being a landlord gives you the opportunity to build up a property portfolio. This can be a great way to secure your financial future, and it’s also a lot of fun. If you’re interested in becoming a landlord, then 2022 is the perfect time to start. Just make sure that you’re prepared for the challenges that come with it.