If you’re in a position where you’re fortunate enough to be renting out a property, then hats off to you. It is an excellent way of making money, and can easily spread into a little side business if you eventually get the money to rent out two or three properties. But one thing people always seem to forget when trying to go down a little business venture like this, is that you are the landlord of that property. Even if you have people coming and going renting from it, you’re still the person in charge. When you’ve got another job on the go, perhaps a family to manage, it is a stressful situation to be in. But at the end of the day, it is always rewarding. So if you’re considering it, we’ve got some reasons why renting out a property is a good idea, and why it might not be for everyone, because there’s always good and bad points to everything! Read on to find out more.
The Upside of Renting out a property
We might as well start with the pros to begin with. There are plenty of them! The first is the excitement and lure of the property market. When you’re buying and selling your own property ready for a move, you often don’t have time to enjoy the whole looking for houses and viewing part of it. There’s so much rush and stress going on, that it is hard to think straight as it is! But when you’re doing it as a business investment, things are so much more relaxed. There’s no pressure to buy and sell because you’re in a rush to move out or in. You can take your time, and wait for the right property to come along to you. There’s no panic that the current owners of the house are taking to long to move out, it’s all just a relaxed process. When you have the money spare to buy a property, to in turn rent out, the stress of the financial pressure is taken away as well. A lot of first time property buyers are faced with all the horrible solicitors fees, moving fees etc. But you won’t have any of that!
You also have a lot of freedom with renting out a property. The first thing you get to decide is how much money you’re going to make. The higher you set the bar, the less people you’re going to attract however. Whilst your end goal is to always make money, it is important to keep the customers you’re going to be pleasing at heart. The last thing you need is to be desperately hunting for people to rent out your house. But, you also don’t want to be losing out, or not be making enough money each month for it to be worth your time. You’ve then also got the freedom to set down the terms and conditions to anyone renting from your property. For example, if you’ve just bought somewhere nice and new to rent out, the last thing you want is for someone to be ruining it with smoking. Whilst some landlords really don’t mind this, it is a dealbreaker to others. Pets is another thing some people don’t like. You also have the freedom to determine what can be decorate and what can’t be touched etc. So whilst the property might seem like theirs to them, it is still very much yours, and you do have control of whatever you want. Just make sure that everything is firmly agreed in a contract, and nothing is being missed.
The Downside of Renting Out A Property
Whilst there are so many positives to become a landlord, we’ve got to talk about the negatives. One of the first is the risk you run of having horrible tenants. Whilst you’re both under contract, it is easy enough for contracts to be breached. One of the main things a horrible tennant tends to do is leave the place an absolute mess. Unless you conduct regular property checks, you won’t know until the very end just how horrible they’ve made your property. A lot of people just don’t have the same standard of living as others do. So mess, and not cleaning properly, is part of the norm for some people. Unless you’ve stipulated somewhere in the contract about the condition you would like the property to be left in, there’s nothing you can really do about it to sort it. If you have, the tenants can face a nasty fine through a dilapidation claim. This is where you’ll attempt to prosecute the tenant for the damage or disrepair they have caused. Companies like Slater Heelis deal with issues like this all the time, but it isn’t the only issue that bad tenants can bring. One more that can really get stressful is late, or very overdue rent payments. You can ask and ask some tenants for your money, but they just won’t listen. Going through the process of getting them evicted, and actually getting your money back is so long winded. But there’s nothing you can do to protect yourself from this. All you can do is make sure a thorough credit check report is being done prior to the agreement being made, and start chasing up any late payments as soon as they happen.
One final con that we need to discuss is the fact the property is still yours. If you’re renting it out, you’re trying to make a profit from it. But if things keep breaking, leaking etc. within the house you’re going to be losing out more than you’re winning. When you’ve got a second household that you live in, and still have bills to pay, it is easy to see why things can get so stressful. The main thing you can do is put aside the money you’re bringing in from the rent for a while. Use it as a savings fund until you’ve got enough built up to cover the costs of any repairs that might need doing. Always make sure you have insurance on any of the houses you’re renting, just so that your back is covered a little as well.