By Martin Williamson, Head of Residential Property, Latimer Hinks Solicitors www.latimerhinks.co.uk
As the property market takes the first tentative steps on the road to recovery, the buy-to-let market is starting to bear fruit again.
With more money available to savers following the Governments reforms of the pension system, increasing numbers of people can invest and spend their pensions freely with the resurgent buy-to-let mortgages set to benefit from the policy change.
A buy-to-let mortgage is an arrangement where an investor lends money to purchase a property in the private rented sector.
Since the final months of 2011, buy to let borrowing has grown by 44%, with the number of properties financed by landlord loans rising from 6,200 in 2011 to 9,300 last year, according to the Council for Mortgage Lenders.
Here are some guidelines to help you stay ahead in the increasingly competitive rental market.
1. Ensure your sums are right
Rental values have slowed in recent months, while interest rates are expected to rise anytime soon. The monthly rent needs to cover maintenance costs, taxes, unexpected bills and, of course, any mortgage.
2. Get to grips with the basics
As with any venture there are a number of safety regulations to be aware of and ensuring that all paperwork has been properly filled in. As a landlord, it is your duty to ensure that your tenants are kept safe, so it may be worthwhile joining the Residential Landlords Association, which can provide all the up-to-date news and, above all, advice on these matters.
3. Location, location, location
Location is key for any rental property as prospective tenants will generally like to be close to the major points of interest in your area, or a short walk/drive away, so choose wisely when selecting an area to invest in.
Ensuring the property is maintained well and has been refurbished is vital in impressing your prospective tenant(s). You don't want to make a bad first impression, so it would be wise to initiate a full scale clean-up prior to any visit, as well as ensure that all windows and walls are gleaming.
5. Love thy tenant
Maintaining a good relationship with your tenant is imperative in the competitive rental market as if you don't look after them, someone else will. It will also be less stressful for you, the landlord, so do some research into the area you are planning to let a property in and get recommendations on local tradesmen that will be on hand anytime your tenant has a maintenance issue, as this will show that you care and can deliver promptly.
Please note: This article is intended as guidance only and does not constitute advice, financial or otherwise. No responsibility for loss occasioned/costs arising as a result of any act/failure to act on the basis of this article can be accepted by Latimer Hinks. In addition, no responsibility for loss occasioned/costs arising as a result of any act/failure to act on the basis of this article can be accepted by the firm.
Martin Williamson is Head of Residential Property at Latimer Hinks Solicitors in Darlington. Latimer Hinks has a team of around 40 people serving private and corporate clients. For further information: www.latimerhinks.co.uk or call 01325 341500.
Latimer Hinks solicitors, based in Darlington, has a team of around 40 people serving private and corporate clients. Their range of expertise and services covers legal issues surrounding commercial, residential and agricultural property, wills and lasting powers of attorney, trusts, probate, long-term care, tax planning, commercial law, alternative and renewable energy, property and disputes, business rescue, employment, and land-owning.