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The True Cost for Landlords Reports have shown that the private residential Landlords within the UK making a loss of £1.2 billion a year due to unplanned costs. Nick Cooper Northwood MD has a few points of advice on how to avoid these issues. The renting market has been growing and is only set to rise, so in 2013 will be the 1st time within 50 years where more people are living in private rented housing. Rather than social housing, an evaluation of the Joseph Row tree Foundation has indicated that an extra 1.5 million of 18 – 30 year olds would be renting by 2020.
As you can guess this presents a lot of promise for honest and prospective landlords to provide a beneficial source of income. But due to the negative media landlords have been given, who have been portrayed as money grabbing, heartless and plain old greedy. This disregards the fact that there are loads of landlords who are accidental, where they are renting their property out of necessity. (Due to not being able to sell their homes or having to relocate) Before you consider letting your property Nick Cooper has a few points for you to mull over. Hidden costs,
It’s important to remember that when renting a property is a for-profit industrial transaction with as any businesses there will also be associated costs. These are what we call ‘hidden costs’ and can consist of occupant arrears, having an unoccupied property, the endless unexpected maintenance charges. If you’re unlucky enough to be unaware of or unprepared for these costs then they will mount up and make a (sometimes a seriously significant) knock in your leasing revenue.
There have been studies that shows roughly 40% of landlords pay out in excess of £1,000 a year regarding unforeseen costs, when one in seven Landlords say they have spent over £1,500. In the region of 70% of landlords have reported experiencing that having unoccupied periods in the last three years. Below a third of these landlords were actually prepared for these costs. Not just financial costs…
There have been visibly a financial repercussion of being a landlord; there are also additional hidden personal side-effects that you need to be aware of. For instance 82% of landlords have all experienced inconveniences, such as not being able to attend a personal event or having to reduce time spent on social activities due to being a landlord. One in five landlords have said that they have been called out to their rented property four to five times a year with at least 20% saying they have taken a hit on their finances from their day employment to tend to matters. Employing a Landlord Manager to help or manage your property.
Property Agents these days can handle a wide variety of letting-related jobs, based on charging commissions which dictates the level of the workload that they will take on for you: from simply finding an occupant, or outright having the full Landlord Rent Guarantee managing the property. So the specific assortment of letting options available to landlords, all depends on the amount of accountability, time, energy & risk that the landlord are individually organized to take on compared to paying for the Landlord Services agent to do it for them. The Guaranteed Rent service being offered removes the hazard of both rental arrears and the loss of income due to the property being vacant; the Landlord Manager in fact becomes the tenant. You the Landlord are therefore guaranteed revenue every month, regardless of the consequences of whether the occupant pays the rental fee or if the property is occupied. Nick Coopers Company (Northwood) is committed to making the rental procedure as effortless as possible for you the landlord, so if your time is valuable and you are unable to dedicate yourself to your landlord duties this could be the Landlord Solutions for you. It is very important to be aware of these hidden costs, for example property insurance would increase once the property has been listed for renting. Could be a 25% increase, this may not be covered by the rent income. Not to mention the Administration charge and Legal fees, the advice would be to prepare for the worst. Landlords should have a budget for legal advice; in addition interviewing tenants won’t be enough. Running credit checks on the tenants are needed to confirmed, but still be prepared for additional expenses such as having to evict a tenant. Now this is way there are so many Landlord Rent Guaranteed Schemes being offered, often charging around 10 percent of each month’s rent of the property. Thank you for reading this article, please remember that the information above is only advice, to help shine some light on some certain issues regarding becoming a landlord.
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