I meet a lot of business owners who like the idea of investing in property as a way to provide an additional income. There is an expectation that becoming a landlord is a simple a buying a suitable house and then renting it out to the first person who comes along. Then you just sit back and watch the pounds roll in, the perfect passive income.
So perfect it could be an ideal retirement plan have a little portfolio of property which rolls in the cash so you can sit back and relax. Or better yet jet off on tropical holidays while that money just keeps on rolling in without you having to do a thing.
Sadly, I am here to burst the bubble right away. Most people don’t realise being a landlord can be a full-time job in its own right.
Head over Heart
Firstly, if you are in the position of buying a new property to rent out, it is worth investing some time into researching what properties are most in-demand and in what areas. Speaking to multiple letting agents to find out what they are looking for in rental properties is a good starting place. It is important to remember that just because you like a property doesn’t mean everyone will, you need to buy with your head, not your heart.
For example, at the moment I have lots of tenants desperate for 3 bedroom homes in the Torbay and Teignbridge areas, bonus if they have parking and an even bigger bonus if they take pets.
On the other hand, if you are renting out an existing property you own then there are two important considerations. When remodelling or repainting consider neutral tones and think about what most people will like rather than what you like best. You also need to remember that any tenant who moves in will live in the house in a different way to you. They will move furniture they may not do things the way you would, this doesn’t mean they are bad tenants they just aren’t you. The property isn’t your home anymore it is theirs.
The good thing is as a general rule it doesn’t take long to fill rental properties at the moment unless they are particularly unusual or awkward.
Once they are in
Now you might think once you have tenants in the property the hard bit is over, but this is not true. The first few months are always the trickiest for landlords. Tenants will inevitably have lots of questions, ‘’how does X work?’’ or ‘’can we do Y’’ or ‘’would it be ok to change Z’’ and so on.
It is also inevitable that the new tenants will find little snags which you missed like a blocked gutter that you didn’t notice in the summer but is very obvious come the autumn rains. And spoiler alert they will notice this at 3 am and decide to let you know right away.
This is rarely because they are difficult tenants and what to complain, often it is because they are worried if they don’t tell you right away you may think they are ignoring the problem or that they have caused the problem. I have had phone calls on every holiday you could think of from Christmas to Easter Sunday. And I even had calls while I was away in America at times of day which would drive most people insane.
So yes, you may be getting a nice side income from your rental properties but you will also find that you are on-call constantly. The alternative to this is to get someone else to do it for you. There is a huge range of management agencies and options to choose from. They can take the stress of being a landlord away while still allowing you to make a side income from your property.
However, once again my top advice is to take the time to research different management companies, meet with them, find one that suits you on a personal level as well as professionally. You will have to work with the management company a lot so you should get on with them. A good management company should also be able to provide you with support and advice should you wish to add additional properties to your portfolio.