Make Your Rental-Owning Dreams Come True With These Top Tips

Being a landlord is one of the best passive income options out there, making it possible for more people to comfortably retire and enjoy a steady pay check that helps them live out their golden years in style.

The only caveat is, of course, that the last thing you want to do is wait until you retire to start. Being a landlord does take work, as well as skill. The added benefit is that the longer you own a property and the more you pay off your mortgage, the higher your rental yield percentage will be.

You won’t get a lot out of your rental unit if the bank owns the majority of it, so use this guide to help you make your rental-owning dreams come true sooner:

How To Buy A Rental Property In The UK

Buying a rental unit requires a buy-to-let mortgage, which is a different type of mortgage than a standard residential unit and often comes with higher fees. That’s why you will need to do your cost-benefits analysis in advance to help you understand what kind of yield to expect, as well as other costs, from insurance to repairs if you want to be a landlord.

Once you’ve done your due diligence and understood exactly what costs to expect (and also what you can afford) it’s time to be smart about which properties you put an offer on for.

New Build Or Older Home?

This can be a tough question for most new landlords, mostly because the answer does depend. A unit that comes with a garden, for example, is always going to be in hot demand amongst families or even just pet lovers or green thumbs. A limited number of properties have access to garden space in the UK, meaning you might find it easier to keep that unit occupied.

On the flip side new builds are often close to new developments and public transport links, making them a great choice for working professionals. New builds also come with lower upfront costs, since you don’t need to repair anything, and can even go through your warranty if there’s something that’s not up to code.

Be Forward Thinking To Help You Save

There are also different kinds of new builds you can buy to rent out. The first is a previously-owned new build. This is a property that’s recently built but has had a previous owner. The unit might not have ever had an owner, but is ready to move into and start earning rent.

The second option is a unit that’s not yet finished. These options are the ones you could, potentially, buy at under-market rates. For example, you can buy your rental property for under market, from heatongroup.co.uk, helping you make healthier returns faster.

Save For A Rainy Day

One of the biggest costs and challenges of being a landlord is needing to cover any damage or repairs out of pocket – at least for a little while. The best way to avoid doing this with your first property is to choose one that still has the builder’s warranty. You can also sign up for support services like yearly or bi-yearly checks for your boiler, heating, and other essential systems that you bake into the cost of rent.

Being proactive and putting aside a repair budget and working to build it into the rent as much as possible is how you’ll save more, to bring more rent in.