The rise of the accidental landlord has featured in the press of late due to people being unable to sell their home. News of the UK entering into a double-dip recession could further add to an increase in this emerging pattern.
The housing market is still relatively stagnant and the requirement for a high deposit still exists for most buyers, which is why we are seeing people deciding to rent out their existing home so that they can move to another property which better suits their needs.
Whilst if done properly this process can work, often it is not sustainable for a prolonged period of time.
The role of a landlord is not one that is best entered “accidentally”. It requires both a significant financial and time commitment. When considering a buy-to-let purchase prospective landlords need to consider whether the property is located in a healthy rental area, prospective rental income and expected yields – but also whether financially the property would be sustainable if faced with a void period.
The cost of routine maintenance also needs to be factored in to ensure the property remains in good condition and attractive to potential tenants.
Informing your existing mortgage lender is also key here, as renting out your property will most likely affect the terms and conditions of your mortgage.
There is often a common misconception of the effort involved in managing a successful buy-to-let property.
Buy-to-let is a commercial activity and should be treated as one.
New or ‘unexpected’ landlords need to ensure they have done their research, know their local market and would be wise to join a member association such as ARLA who can provide independent advice and support.