During times of economic uncertainty, such as the issues arising from Brexit and the COVID-19 pandemic and its economic fallout, letting residential property is still an attractive and viable option for providing an alternative source of income.
The thought of expanding a buy-to-let property portfolio might feel overwhelming, but becoming a landlord is an attractive option for growing your capital. A long term investment in the right property will perform better than a savings account, plus the rental payments provide a steady stream of income. However, property investment is a long-term commitment and you’ll need to understand what your responsibilities are as a landlord in order to successfully grow your portfolio.
Invest in the Right Properties
One of the most important things to research when purchasing an investment property is its location. Ask local agents and landlords what their experience of residential letting in the area has been and look for desired amenities such as transport links.
When considering a property to invest in, you will also want to assess what your rental yield is likely to be, this is the rental income minus expenses and tax. Think about how much maintenance the property will need and how much any repairs are likely to cost. Ensuring that the property is in a good condition prior to purchase, will not only reduce your costs but also make it an attractive prospect for potential future tenants.
Property surveys are recommended. There are four main types of property survey, these are called a valuation survey, a condition report, a homebuyer report and a full structural survey. Since April 2018, landlords in England and Wales must ensure that their rental properties have an Energy Performance Certificate with a rating of at least an E, so it is also a good idea to check that this has been met before purchasing a buy-to-let property.
Find the Right Tenants
Once you have purchased a buy-to-let property, you will probably already have an idea of the kind of tenant you’re looking to attract, so make sure that you provide what they need. Once you have found a candidate for a tenancy, always check your tenant’s right to rent (You must check that a tenant or lodger can legally rent your residential property in England), undertake credit checks and ask for references so that you can make sure that they are reliable tenants.
Always carry out a detailed inventory of the rental property, including photographs, this is a vital tool in legally benchmarking the condition of the property for reference. Without an inventory, you will be unable to demonstrate if any damage has occurred to the property. You can find out more about what to do if a tenant damages your buy-to-let property here.
Understand Your Responsibilities
Safety is a top responsibility for landlords. Smoke alarms must be installed on every floor and you must arrange an annual Gas Safety Certificate if required, providing your tenants with a copy. You will need to provide a copy of your Energy Performance Certificate, which explains the energy efficiency rating of the property, to your tenants. It is also recommended that all electrical appliances are PAT tested.
Landlords are also responsible for protecting a tenant’s deposit by registering it in one of the government’s authorised deposit schemes. Although written agreements aren’t a legal requirement, it can often be a good idea to always provide one so that both the tenant and landlord are clear on what exactly their rights and responsibilities are in all circumstances.
Protect Your Investment Portfolio
Becoming a buy-to-let landlord and growing a property portfolio can be both exciting and rewarding but Landlord insurance is a high priority. There are many incidents that could occur that may result in you needing to make an insurance claim. Having the correct cover is of utmost importance in being financially secure.
If you’re thinking of investing in buy-to-let property, Ashburnham Insurance are specialist providers of Portfolio Insurance for Landlords with multiple properties. The risk to a landlord is calculated on a number of things and our packages can be tailored to your needs and give you the precise risk coverage required without paying for cover that you don’t need. We can cover residential properties let to tenants, houses of multiple occupations and commercial buy-to-let properties amongst others. Whether these buildings are a small privately-owned investment or a large full-time business, we will have the right insurance cover for you. Contact a member of our team today on FREEPHONE 0800 1696137 to find out more.