5 Tips For First Time Landlords
Curious about becoming a first time landlord? Luton and Dunstable is a highly sought after location for property investors. It is on the commuter belt to London making it ideal for professionals looking to pay less in rent and it has local industry with both the Luton Airport and the Luton and Dunstable Hospital employing over 35,000 people between them.
The demand for 1-2 bedroom properties in Luton and Dunstable is very high. In our experience, it takes around 1-2 weeks to place a tenant within a property and have a high number of enquiries which make it a landlords market.
If you are a first time landlord looking at investing in property in the Luton and Dunstable area, here is our top 5 tips to help you get your property ready for the rental market.
1. Understand the local market
As with most things, renting out your home should start with lots of research!
Get a good understanding of other properties available to rent in the local area by speaking to a local estate agent, and doing some of your own research online. As first time landlord, this will give you a good understanding of what’s on the market, what kind of features they have and how much rent are they being advertised for.
2. Calculate your rental yield
Calculating your rental yield helps you to understand your return on your property investment. A good rental yield is somewhere between 5-8%. To calculate this, use the following formula:
Your total property investment cost (purchase price + renovation costs) / total annual rental income = rental yield.
If your rental yield is lower than 5%, then also consider the whole investment including your equity and the rate your property value may increase.
3. Inform your mortgage lender
If you have a mortgage against your property, you will need to inform your lender that you will be renting out your property as part of the terms of your contract. Depending on the type of mortgage you have, you may need to change mortgage type to a buy to let, or you may be able to gain “consent to let” which will give you temporary approval to let your property on your existing mortgage.
4. Arrange your landlord insurance
If you already have an insurer for your house, inform them of your decision to rent out your property. They may need to change your existing insurance policy to reflect that there will now be tenants living there.
Protect your property and your investment further by sorting out landlord insurance. Some landlord insurance policies will cover you in case of missed rental payments.
5. Prepare your property
Before any tenants move into your property, make sure you consider the following:
- Will you include furniture, or will the property be unfurnished? Many tenants prefer unfurnished homes when they intend to stay in the property longer term, but if your preference is for shorter term tenants then perhaps consider furnishing.
- Making sure any required maintenance checks and repairs are carried out before your tenants move in to avoid inconveniencing them. This includes checking appliances and boilers have been adequately serviced.
- Giving your property a fresh coat of paint and if necessary new carpet can mean you can demand a higher price or are able to get interest from more reliable tenants who look after your property.