Although recent tax changes relating to the buy-to-let market have rocked the investment world and may well be putting potential investors off, not everything is as it seems and first time landlords can still find success. Although all investors experience some form of scepticism at some point, first time investors almost certainly experience it more than others, purely due to their lack of experience.
However, regardless of the new tax changes, and with special thanks to low interest rates and the possibility for property prices to increase, now is a very good time for first time investors to take the plunge. Becoming a first time landlord can often be very difficult and confusing, so we have created a list of some of our top tips for first time landlords to succeed within the industry.
Education and Research are Essential
When first time landlords turn their heads to property investment, one of the biggest mistakes that they make is rushing into it without conducting all of the relevant research and becoming fully educated. Getting to know the market is very important for the success of first time landlords, as looking at different locations, different property types and general financial figures can help you to make informed decisions at every stage of the process. If you were to go forward with a property but were looking to charge rent at a much higher rate than similar properties within the area, then you are unlikely to have much success.
A key part of the education and research process is getting to know the responsibilities that you have as a landlord. Becoming a landlord is often extremely hands on, from preparing the property to catering to your tenants, and landlords need to be aware of what is going to be expected of them, as well as what the law requires of them. Without determining your responsibilities, you may find that the job requires much more of you than you first realised, and this may not be a healthy addition when looking to achieve success.
Finding the Perfect Investment Opportunity
Finding the right buy-to-let investment opportunity for you is another key factor to becoming a successful first time landlord. Firstly, choosing the right property type is the first part of the process, and researching which property types may be best for you and your individual circumstances. Once you have decided upon which property type you would like to invest in, the next step is to look into different locations that have your desired property type available. You would then research the areas to find out whether or not tenants may be looking to live there, as well as what you can hope to achieve financially.
An important point to keep in mind is the desire for tenants to live in your property. If you feel that you have found a property that tenants would be queuing up to live in, then you have almost certainly found the perfect property for you.
Consider your Potential Tenants
In relation to finding the perfect property, you will also need to consider your potential tenants, to ensure that the two go hand in hand. If you are looking to target a particular audience or category of tenants, but you invest in the wrong property type for them, then any work that you do to appeal to those potential tenants is effectively going to be a waste of your time. So whether you choose a property type first or choose to target a specific group of tenants, you need to be able to interlink the two of them, as that will bring you more success.
As well as this, your layout, location and price of the property needs to be appealing to potential tenants, attracting them to your property initially, and then encouraging them to choose your property once they have had a viewing.
Insurance for Landlords
Landlords should ensure that they have everything in place in relation to their insurance, including informing your buildings and contents insurer of any changes to any current policies you have. Although the insurance is not currently a legal requirement, it is certainly advised to have something put into place, protecting your investment in more ways than one.
Hopwood House are property investment specialists, with a wide range of investment opportunities throughout the UK and overseas in the buy-to-let, student property and hotel investment markets.