When you are thinking about starting your own business, you will probably have a lot of different ideas to work with. If this is your only job, you will probably want to focus on something that you are passionate about. However, if you simply want to start a business that allows you to have a passive income, becoming a landlord might be a better option.
In this article, we are going to discuss some of the things that you should consider before you start a business and become a landlord. Read on to get some expert insights.
How Many Properties?
If you are planning on becoming a landlord, you are going to need to invest in some properties, but how many? If this is your first time managing a property, you might want to start small but only one monthly rent isn’t going to earn you a lot of money. Try to figure out what you can afford and get approval for mortgages before you buy. Once you get started with your landlord business, you can invest in more properties and grow it over time.
It’s A Big Commitment
Many people believe that becoming a landlord and starting a business in this way is pretty easy. For those who can afford to hire a letting agency to manage the property, this is actually the case but for others, there is a larger commitment. If you are managing the property by yourself, you’ll need to deal with maintenance issues and make sure that rent is paid on time. It is also worth noting that if there are no tenants in the property for a period of time, you’ll be responsible for the mortgage payments.
There Are Safety Responsibilities
Another thing that you must consider before you become a landlord is the responsibilities that you will have. This doesn’t just involve making sure that tenants are happy with the property and resolving any issues, you must also consider the health and safety regulations. As a landlord, you must have an electrical certificate and you must ensure that the property has safe appliances. You can get these certificates from companies such as Trade Facilities Services so make sure to consider this carefully as an option.
Furnished or Unfurnished?
If you are planning on renting out some properties and turning this into a business, you’ll need to decide what kind of basis you will offer the properties on. Typically, you will choose to furnish the property or allow the tenants to furnish it themselves. While it can be cheaper in the initial stages to offer it empty, you will not make as much money over the years. If you can afford the upfront cost, you could charge more per month and make it back in no time at all. Just make sure that you research the kind of properties in your area so that you don’t go down the wrong path with this as some tenants prefer to buy their own furniture.
As a new landlord, you might be hoping to get tenants in the door as soon as you can. However, if you want to make sure that your property business flourishes, you must make sure to vet your tenants. Usually, you can ask your tenants for references from previous properties that they have lived in. Use this information wisely if you want to make the right decision. If a tenant has a reputation for missing rent deadlines or being messy, you will want to avoid them at all costs. If they don’t have any references, you can give them a chance at your own risk.
Finally, you should make sure that you are aware of the additional costs that you will encounter when you start a landlord business. Firstly, you’ll need to pay for insurance on your properties and appliances. On top of that, you’ll need to pay for anything that is broken in the property and relatively quicky so that your tenants are not without important appliances. You might also need to pay factor fees if your properties have shared communal spaces. If you can afford all of these things, you might be ready to go ahead with this.
Consider This Carefully
Starting a business as a landlord with a few properties can be a great move if you have the money to do it. There are always people looking for rental properties and you can pay back your mortgage and earn more on the side at the same time. Before you go ahead with this, make sure that you have considered everything that we have discussed in this article. Hopefully, you’ll make a lot of money in no time at all.