Why be a landlord

Posted by Active under Landlord News

Most of the time, the answer is very simple: money. Letting to tenants provides a guaranteed regular income for the landlord insurance customer while the landlord may still benefit from any rise in the value of the property itself. It is a form of investment where you have more control than collections of stocks and shares, and can influence the rise in value by modernising and operating efficiently. You can also monitor how your buy to let investment is doing.

There are other benefits too in becoming a landlord insurance customer. There is the satisfaction of providing a service to others (how would students manage their accommodation needs without landlords?) and, for some, letting a room at home is a source of companionship. If you are interested in the property market, you can enjoy the stimulation of researching market conditions and viewing properties without the emotional complications that are inevitable when looking for a home for yourself.

Do Some Research

Talk to as many people as you can to find out if buy to let property investment is for you: it’s a hard-nosed business that doesn’t suit everybody. A good place to start researching is the internet. You could also join a local private landlord association, which you can find via the telephone book or on the internet.

[stextbox id="info"]A number of companies run courses on property investment. These tend to be over-priced and over-hyped. Much of the information given is widely available elsewhere at a fraction of the cost. If you interested, sign up for any free courses but don’t be sucked into paying over the odds for the follow-ups, and don’t take your cheque book or other form of payment so that you can’t be hurried into a purchase by a hard sell.[/stextbox]

Other ways to make money from property

You may have great faith that property prices will at least stay solid and possibly continue to rise, but lack the commitment to be a landlord. If so, there are a number of other routes to property investment:

[stextbox id="grey" caption="Investing in syndicates"]A Syndicate is a group of people (it can number up to 15) who own property together while paying a management company to run it and deal with the tenants and maintenance. Syndicates generally operate more than one property, and are often able to negotiate substantial discounts on property purchase by buying in bulk (for example, purchasing a whole block of flats rather than one unit). This allows you to get involved in the property market at a relatively low cost, with the risk spread over a number of properties. Syndicates are not regulated by the Financial Services Authority (FSA).[/stextbox]

[stextbox id="grey" caption="Property funds"]Theses are organisations that buy, sell and manage property, in which you can invest. You have little say in the day-today running of the business, which is conducted according to an agreed prospectus. You can join a property fund through an independent financial advisor. Funds are regulated by the FSA.[/stextbox]

[stextbox id="grey" caption="Renovating for profit"]This is hands-on property development for those who know the market and have the skills or contacts to improve a property quickly and sell it on. These investors are often responsible for bringing what may have been semi-derelict or uninhabitable properties back into occupation.[/stextbox]

[stextbox id="grey" caption="Buying and selling property"]Again, those who know what they are doing and have the time and expertise will seek out undervalued or unwanted properties, perhaps make a few changes or improvements, such as obtaining planning permission for an extension, then sell on at a profit.[/stextbox]

[stextbox id="grey" caption="Buying ‘off plan’"]Properties that are not yet built. The buyer purchases the property from the developer, hoping it to sell it on at a profit soon after it is completed.[/stextbox]

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