Whether an investor, or simply a homeowner looking to make a bit of extra money on the side, renting out your property can be a safe and reliable way of earning income when all the appropriate steps are taken.
Nevertheless, renting out your space is not necessarily as straightforward as simply putting it up online and waiting for the tenants to come. Thorough planning, as well as understanding a number of important related factors, can make the difference between a successful rental and one that winds up costing more than it’s worth. Here are a few points that may help you decide whether renting is for you.
Understand your responsibilities
Fundamentally, being a landlord is a job that requires you to take on a number of additional responsibilities that can often interrupt the day-to-day workings of your life. If a pipe suddenly bursts or there is a broken boiler, you will need to be on hand to sort out the problem, regardless of the hour or your engagement at that moment. Being aware of this new status is essential to understand before converting from simple homeowner to 24/7 landlord, as it can have a considerable impact on your life.
Work out the service costs
It would be nice to think that setting up and renting out an adequate living space would be enough to just let it run by itself, however the reality is that there will inevitably be sizeable service costs along the way that must be factored in. These can differ depending on the type and quantity of properties you are leasing, but the most commonly occurring costs are:
- Letting agent fees
- Cleaning and maintenance fees
- Rental guarantees
- Legal and administrative charges
- Income tax for landlords
Therefore, when you are working out the potential income that could be derived from leasing out your property, you will need to acknowledge that a significant chunk of that will be contributing towards service costs.
Once you have set up your space for rent, the next step is to find tenants to fill it. This is often easier said than done as you do not automatically want to opt for the first people who respond to your advert. Attracting the right tenants who will provide you with a degree of financial stability and are unlikely to cause problems further down the line demands a fair amount of work on your part, from working out the monthly pricing, to writing an appealing description that will tempt precisely the tenant you’re looking for.
Charging a tenant to live in your property carries with it various legal obligations that must be understood and adhered to if you are to have a smooth ride when leasing out. Fortunately, there are a number of property consultancy companies set up with exactly that in mind that operate in more or less every city in the world. For example, in the UK, London property experts are the people to go to for expertise on rental legal matters and could end up saving you a considerable amount of time and money.