Questions landlords must ask themselves

If you have plans to become a landlord, there are a few important questions that you should ask yourself before embarking on this journey.

Being a landlord can be an excellent way to boost your income, and it can be an interesting and rewarding business venture, but it is also a lot of work and not well suited to everyone.

By focusing on these questions, you can determine if it is right for you and make intelligent decisions that will set you up for success down the line. So, if you are planning on becoming a landlord, be sure to ask yourself the following.

How will I finance the investment?

First, you should consider how you will finance the investment. Buying a property to let requires significant investment, so you need to weigh up your options. One of the best approaches is to speak to specialist mortgage brokers, such as Commercial Trust.

Specialists like this can help you secure the best mortgage deals from a range of UK lenders. They can find the best product based on your needs, whether this is a buy-to-let mortgage, commercial mortgage, or development finance, as a few examples. There are costs involved, but they can simplify the process and help you make long-term savings.

Think carefully before securing debts against your property. Your property may be repossessed if you do not keep up repayments on your mortgage.

Be aware that finance products solely for property investment generally don’t come with consumer protections as they are typically not regulated by the Financial Conduct Authority (e.g. unlike a mortgage on your house would be). You are expected to understand their risks and benefits which a broker can help you with.

Will I manage the property myself?

Another major question to ask yourself is if you will manage the property or use the services of a property management company. There is a lot of hard work involved in being a landlord, which can make it challenging if you already have a job.

A property management company can handle all the responsibilities for you, but this comes at a cost. Ultimately, you need to consider if you have the time and energy to manage it yourself.

How will I find good tenants?

The key to success in being a landlord is finding and holding onto good tenants. You need to work out how you will find, secure, and retain reliable tenants, which means offering competitive rates, resolving issues swiftly, making upgrades, and maintaining a positive relationship. You also need to determine the kind of tenant you want to attract, whether this is students, professionals, or families.

What ROI can I expect?

Becoming a landlord is ultimately about making a return on your investment (ROI). Therefore, it is important to crunch the numbers and work out what ROI you can expect, with the aim of ensuring that your investment is profitable over the long term.

This means working out your income and expenses and calculating at what point you will turn a profit. Be sure that this aligns with your long-term goals to make the investment worthwhile.

These are the main questions to ask yourself if you have plans to become a landlord. Taking the time to mull these questions over will help you determine if this is right for you and help you take the first steps in your journey. Becoming a landlord can be exciting, but it is also a huge responsibility and a major financial decision, so it is not one that should be made lightly.