Have you been thinking about buying a property to rent out? Perhaps you’ve been looking at ways to invest some money and have seen that property could be a good option. After all, everyone seems to be doing it, don’t they?
You may have done your homework, and carried out lots of searches online, seeing many good things but also noting quite a few potentially negative things too.
So, what’s it all about? Is owning a rental property in London worth it?
Here, we take a look at owning a rental property, to help you make a decision. If you’re thinking about investing in South London, come and chat with us as we are experts!
Is owning a rental property in London an easy way to make money?
Firstly, let’s dispel the myth that becoming a landlord is an easy way to make a few quid, to get rich quick and to have an easy life. If you think this, then you may need to stop and think again.
It’s true, being a landlord is a great way to invest money that might otherwise sit in the bank earning very little interest. But you have to think of the long game. A property may well sell for a lot more than you paid for it and so you will make some money that way. The rent should cover the mortgage repayments but don’t forget the additional costs such as insurance, maintenance and gas and electrical safety checks. All these things have to be managed too – they don’t just happen. There’s a lot to consider, and using Property Managers, Sources and other professionals is your best way to ensure you are well-informed and legally compliant.
Top Tip: Do your research and then do some more. Look at all the pros and the cons of owning and renting a property and make sure you do the maths.
Can owning a rental property be treated as a ‘business?’
Being a property owner brings some great rewards, and not just financial. You must treat it as a business though. As you will be your own boss, you’ll be making decisions that you believe to be right and doing things that you know will bring you, personally, financial rewards, and that’s the key to getting it right – treat it as a business. If you look at it as a little hobby, you may not keep up with the legal side of things, or you may become a little lax when it comes to making sure certificates are up to date – and you really cannot afford to do that. Certificates must be in place, maintenance must be done, and standards must be met. Treating your property like a hobby won’t make this happen. Property Managers also help grow your business just like any other industry. Hiring a professional to take up your workload frees your time to invest in more properties and grow your business further.
Top Tip: If you think you’d like to own a rental property but need a helping hand on the managing and lettings processes, please get in touch with us. It’s what we do for a number of landlords in the London.
Is owning a rental property time-consuming?
One of the things that people underestimate when they are thinking about becoming a buy-to-let landlord is time. If you have time to look for a property, to go through the purchase process, to manage the property, to maintain it, it can be a great thing to do. But also very energy draining, especially if you have another job alongside your property investments. In property, it isn’t always necessarily about the amount of time you spend, but sometimes about the hours of the day you are working. Most property professionals work through their weekends (including Sundays!), early mornings and late evenings. If you think you can’t cope, employ the services of a lettings agent or a Property Manager. At Your Home Managed, our fee begins from 5%. In comparison to the amount of time you could be spending doing the things you love, this is a minimal fee to ensure your Property is professionally managed and maintained. The more properties you have, the more time you will save, providing you a better return on investment on the fee you pay, and maximising your time with your family, other work and most importantly: your own free time to enjoy your life!
Top Tip: Don’t write off becoming a landlord if your time is too precious. Your Home Managed can help you achieve your goals so your leisure time is just that.
What about expenses?
Let’s say you’ve found what you think is a great property. It’s in the right area and in a location where you will get a reliable tenant paying the right sort of rent. Brilliant – a rental property makes perfect sense. But! Don’t forget the expenses. There’s the legal fees to think about, potentially the mortgage fees too, insurance costs, agency fees (5% with Your Home Managed) and additional costs for ongoing maintenance and other property requirements (such as your property’s certificates).
Top Tip: It sounds simple, but always do the calculations and make sure the numbers stack up. If you don’t want to spend money on repairs and bringing a property up to date, then this also shapes what sort of property you buy.
Owning a rental property in London is an opportunity awaiting you right now!
There has been a lot of press about house prices doing really well right now. That’s great news for the property sector in general, but there are also still many opportunities to be had. You could snap up a potential buy-to-rent property and with some work, it could well be a solid investment for your money in the long-term.
Top Tip: Talk to estate agents like us in South West London. We know the area, so we know where the opportunities lie, and we know what makes a good rental property.
There are lots of things to think about, but with the correct advice and support, you can create your own future.
We can help you with your property investments, from deciding on a suitable property, calculating returns and works required, finding you tenants, managing the property in the long-term, keeping your documents safe, and much much more!