6 Things That You Need To Consider Before Renting Out Your Home
4 minute read
There are many reasons why you might be considering renting out your home. You may be moving away or moving up the property ladder and want to keep hold of your asset, or there may be financial reasons why you need to look at putting your home on the rental market. Before you make the decision you need to read the list below, put together by the team at Just Mortgage Brokers, of things to consider before you start the rental process.
Is your home in a rentable condition?
You may be happy living in your home as it is now but is it ready for the rental market? Are you electrics and plumbing up to date and fully functioning, does the property need a lick of paint to make the color scheme more neutral so that it appeals to renters, is the garden tidy and easy to maintain etc…
Can you switch to a buy to let mortgage?
As you have been living in the property you will need to speak to your mortgage lender regarding switching to a buy to let mortgage. Bear in mind that staying with your current mortgage provider may not necessarily be your best option, it’s always advisable to shop around for the best buy to let mortgage deal; it could mean the difference between making a profit or a loss each month.
Insurance and certificates
As a landlord you will have to have various certificates and insurance policies in place before you can rent out your home. A local letting agent should be able to advise you on this. You will have to insure your building, and furniture if you are renting your property furnished, you will also need a landlord certificate and proof that the gas and electrics in the property are safe. Make sure that you have a list of everything you need to put in place before your property can be rented and calculate the costs associated with it.
Rent out yourself or appoint an agent
You can rent your property out yourself, which is the perfect option if you have a friend or family member who would like to rent out the property. However, no matter how well you know your tenant, you should always make sure that you have a properly drawn up tenancy agreement in place. Alternatively, you could use a letting agency who will market the property for you, manage the tenancy agreement, and be the first port of call for your tenants, obviously you will be charged a fee for this. If this is the route you wish to go down, shop around for the best rates.
How much you can get for your property each month
The amount of rent you can charge will vary depending on the area you live in and the type of property you will be renting out. Research the rental market in your local area, how much are similar properties renting for.
Will it be profitable?
All of the information you have gathered regarding rental costs and income should enable you to make a decision as to whether or not renting your property out is an option for you. The answer to this question partly depends on your motivation, is it to make a profit or just to pay the mortgage and keep your asset ticking over while you go off and do other things?
If you think that your property is in a rentable condition and it’s something that you would like to go ahead with then, as a starting point, invite a couple of local letting agents to take a look. Not only will they have more of an idea about the potential popularity levels of the property, but they will be able to advise on any work that they think you should carry out before putting it up for let; they will also be able to provide details of insurance and certificates that you will need to obtain.