One of the situations we come across at James Kristian is clients’ who are relocating and face the issue of selling their home as part of the move.
One a few occasions’ clients of ours have come to the point in their life when the kids have grown up and left the family home, and they decide to move to a warmer climate to escape the cold winters.
Or they have inherited a house from family in addition to the one they own.
But that leaves the question what do we do with our house? Do we sell? Or do we rent it out?
If you need the cash funds, then you may have to sell your home, if that is the case then the best steps to take would be to put the house on the market and sell.
If this is the situation you find yourself in, then make sure prepare your home correctly for the sale, to ensure you maximise the value of the property.
The more money you make from the sale, the more money you have in your pocket to fund your move. So it pays to put some care and attention into a makeover before it goes on the market.
The other alternative to selling your home is to rent it out.
This is often the case when the people who are moving are not as dependent on the money from a sale to fund the move.
They may also want to keep a base back in the UK in case they don’t settle, and so they have the option of being able to move back home should things not go as anticipated.
If this is the case then there are things to consider if you are thinking of becoming a landlord.
Do you have a strong emotional attachment to your house?
If you have never been a landlord before then you have to take into consideration the fact that you are going to be letting people into your home to live as they do, and not necessarily the way you would like them to.
It’s not uncommon for new landlords to find it hard to deal with the fact that strangers are living in their home.
You could of course rent to friends or family, but this again raises issues, and can be the basis for fallouts if the people you trust don’t keep their end of the bargain in maintaining your home in the way you expect.
So before you make the decision to rent out your property, you have to be comfortable in the fact that the house will be mostly out of your control with regard to how people are living in it.
You can of course schedule regular inspections, but if you are moving away, then this may not be so easy to do. So take some time to consider if you are happy with this.
Being a landlord is a long-term strategy.
If you want an income from your property then you have to think long term. To get the house ready to rent will take some expense, you will have to prepare the house to look its best to attract tenants and achieve the best rental price.
There are also things you need by law such as an energy performance certificate, and a gas safety certificate, which are both an expense to you before the house can be let.
You should anticipate a layout of money before the house is ready to rent, so you have to consider then the amount of time you will need to let the property before you recuperate your outlays and realise the financial benefits of being a landlord.
Tenants expect a good service.
As the landlord you will be expected to maintain the property, if the boiler breaks down in January, then you need to be able to get it fixed quickly.
A boiler can be an expensive fix, so you have to have a maintenance fund set aside to fix quickly any issues that arise.
If you don’t provide the service of being a good landlord, then your tenant won’t stick around for long.
The flipside being, if you do a good job as a landlord and your tenant’s feel assured that you are on hand to look after them, they will want to stay living there.
Be prepared for void periods.
Once a tenant moves out and the property is empty, this is known is a void period. More often than not, once a tenant leaves there will be some repairs to carry out, and a lick of paint to get it ready to rent again.
But be prepared that this could be for a number of months, and if the property has a mortgage on it, then you will have to pay this during the void period, as well as the council tax on the property.
So make sure you prepare in advance for this by having pot of money set aside to cover void periods, ideally you should have six months worth of money set aside to cover void periods.
And when the property is let you should also set aside a portion of it to bank and save for the next time it becomes empty.
A lot to think about.
If you are thinking of becoming a landlord there are a lot of points to consider, and if you’re in two minds and not so sure you can cope with the demands of being a landlord, then selling may be the best option for you.
However the benefits of holding on to a property are very good, over a period of 10 – 15 years the property could significantly increase in value, and the rental income adds revenue to your life.
The key to having a good experience as a landlord is finding the right tenant. And it can be trial and error if you are doing it yourself without the proper checks.
If you would like help in finding the right tenant, the James Kristian is on hand to help you.
We offer both a tenant finding service, and full management, meaning you can leave the whole process to us and we will take care of the property on your behalf.
We do full reference, credit checks and property inspections, and we pride ourselves on the long-term relationships we have with both landlords and tenants.
So if you would like some advice on being a landlord, then feel free to give us a call or pop in for a chat in the office, and one of our friendly staff will be on hand to give you the right advice.