4 Things to Consider Before Becoming a Landlord

by
GetGround

New landlord laws and the threat of penalties make many prospective landlords wonder if letting their property is worth what seems like a tremendous hassle. 

Fortunately, there are still numerous benefits to being a landlord. Consider these four elements before you begin your buy-to-let purchasing journey.


Always Consider the Pros and the Cons Before Becoming a Landlord

1) Additional Income

To be clear, buy-to-let investing is not a route to getting rich quickly. Typically it takes time for the property to appreciate in value.

But it is still a better investment than accruing interest in the bank. Buying the right property at the right price will see the value appreciate while your tenant contributes to the mortgage (if you have one). The returns can be great, especially if you own the property outright. 

Ensure that you pick reliable tenants, and that rent can cover all the running costs associated with renting. You should also be prepared for possible vacancies. 


Getting into the property game can be challenging and rewarding

Security and Flexibility

Once a property is paid up, your rental income can support you long after retirement. A report by CML showed that more than 30% of buy-to-let landlords invest in property as a form of pension. 

In a worse-case scenario, you can sell or move into the property yourself at a later stage. Owning several properties is akin to being your own boss and running your business which for some can be fulfilling. 

If you manage a complete portfolio, being a landlord can be a full-time job. However, you will be able to set your own hours and make decisions independently. Bear in mind that you’ll also be at the mercy of tenant emergencies at all hours, and it can take a lot of administration.

Property Values

Location matters. If you buy a property at the right time, in the right area, in most cases it will appreciate over time. In fact, the valuation of Britain's £7.56 trillion property market continues to hit new records. It has outstripped the performance of FTSE All Share index, cash and gold over the past 20 years, with property prices doubling, on average, every 10-15 years.

This trend has been strongest in the UK’s capital, London. Data from Property Partners published in 2016, and updated by GetGround for 2021, showed that £100 invested in London’s property market twenty years ago would be worth £1,290 today. Meanwhile, the same amount invested into the FTSE All Share index would be £525, while gold would be £355 and cash savings £266.

Property is typically valued according to the land it’s built on, so even if the building is relatively old, your investment can grow dramatically over time. 

Running Costs

It’s vital to calculate your operating costs correctly. Landlord insurance, maintenance, supply of furniture and fittings, repairs, safety certificates, and of course, the cost of finding a tenant and using a letting agent can add up quickly. 

Agents will charge 10-15% of the rental amount as a managing fee, so if you are confident and able to manage the rental yourself, you can save some money. 

Being a landlord comes with numerous benefits and responsibilities. Consider them all carefully and invest smartly to make sure you experience more pros than cons when letting your property. Make sure to browse our blog to learn more if investing in buy-to-let properties, and being a landlord, is right for you.

Looking to learn more? Ready to get started on a company? Click on the button below.


GetGround

Read more

Finance image

Meet Your Landlord: An Interview with Ian

In this GetGround interview, we speak with one of our clients on his journey to becoming a landlord. We learn about how he first got into buy-to-let property investing, among a list of other things.

Finance image

Why is Mortgage Lending Surging?

The UK is experiencing historic highs in mortgage lending as home movers scramble to find more space at better rates.The UK experienced a surge in mortgage lending in the first few months of 2021. Tot

Finance image

5 Tips to Find The Right Tenant

Becoming a landlord is a profitable and enjoyable venture, but the wrong tenant can put your income and investment in jeopardy. Follow these tips and find the perfect tenant. 

Finance image

GetGround and Molo Strike Partnership

‍GetGround and Molo, announces a distinctive new partnership that executes all the essential administration underpinning Buy-To-Let (BTL) purchases in one fast and comprehensive service. 

Finance image

Stamp Duty Holiday: What Happens After it Ends?

The stamp duty holiday has encouraged a rush of property purchases this past year. This has led to rising house prices. What will happen after the stamp duty hliday ends?

Finance image

4 Things You Need to Do as a Landlord

New laws and regulations mean that landlords can face massive fines if they fail to do their due diligence. Make sure to do these four things to stay on the right side. 

Finance image

Buy-to-let Limited Companies: What Do I Need to Know and Do?

In this animation series, we cover key questions on how to form, optimally structure, and manage your buy-to-let limited company. We cover key basic concepts, and clarify some key misconceptions.

Finance image

The Pros and Cons of New and Old Builds

Deciding whether to purchase an existing home or a new building can be difficult. Here are the pros and cons of each for prospective landlords.

Finance image

Is It Cheaper to Rent a Home Than Buy to Live In?

The pandemic has had an incredible impact on the property market. For the first time in six years, it’s cheaper to rent a home than buy it. What does this mean for buy-to-let investments?

Finance image

Are Leaseholds Harder to Sell and Maintain Than Freehold?

If you’re buying a property to let, you might be faced with a choice between a freehold and a leasehold. What is the difference between each of them, and are leaseholds right for you?

Finance image

How Do Investors at Different Ages Look at Buy-to-Let Investing?

A recent survey by GetGround found that landlords younger than 40 are significantly more likely to purchase more buy to let properties in the future.

Finance image

GetGround Learning Series: Tax Efficiencies

During this video, we go over key tax considerations when using a limited company to hold your buy-to-let properties, including how you should think about extracting profits, estate planning, and more

Finance image

Buy-to-let Investing: A Safeguard Against Inflation?

Investing in real-estate is often seen as a natural protection against inflation. Why is this important, how does this work, and why should this factor into your investment decision-making? 

Finance image

UK Housing Prices are at Record Levels - What Does this Mean for New and Existing Investors?

UK housing prices are currently at its highest level. Does this mean we are in a bubble, or are we in a "new normal"? Should I start entering into the market or wait it out?

Finance image

Top 10 Areas to Consider For Your First or Next Buy-to-Let Property Purchase 

Before executing a buy-to-let strategy, determine your investment goals. Are you looking for capital growth or a monthly income? Consider these areas for your first or next investment.

Finance image

Capital Appreciation vs. Rental Yield: What Matters More and Why? 

Before you start your buy-to-let investing journey, make sure you understand the difference between capital appreciation and rental yield - this can ultimately help decide where you invest.

Finance image

4 Things to Consider Before Becoming a Landlord

Are you thinking about becoming a landlord? Weigh all the pros and cons before making a decision and make sure to consider these 4 topics before starting.

Finance image

Brief Read: Buy-to-Let Market Enjoys Surge of Interest from First-time Landlords

Buy-to-let market enjoys surge of interest from first-time landlords despite the private rented sector proving challenging for some landlords due to tax and regulatory adjustments.

Finance image

4 Reasons Why Buy-to-Let Remains Attractive, and Lucrative

The UK’s buy-to-let market has acted as a safe (but highly rewarding) pair of hands for investors across the world for decades. This article explains four key reasons why.

Finance image

How Do I Set Up a Buy-to-Let Company? Part 3/3

In this final instalment of our trio of blog posts, we take a look at the various legal documents required, and common pitfalls, when forming a company. 

Finance image

Video: A Smarter Way to Purchase UK Property

Our very own Chris Frame joins One Global Property Service's Regional Director John Koh in a conversation on how GetGround helps investor finds smarter ways to purchase and invest in UK property.

Finance image

Video: Should You Buy Property in a Limited Company?

Should you buy property in a Limited Company? In this section our very own Joey Carbonaro discusses with Luigi at LN Capital on key reasons why you should consider using a company.

Finance image

Video: 10 Things You Should Know Before Setting up Your BTL Company

In this video Luigi at LN Capital sits down with our very own Joey Carbonaro to discuss how investors should structure their company, and common pitfalls investors usually make.

Finance image

GetGround Introduction

Here Moubin, our CEO, introduces the GetGround business and how we can help you purchase and manage your buy-to-let property through a company.

Finance image

GetGround Learning Series: Intro to Buy-to-let Company Formation

During this series, we help introduce important concepts around buy-to-let company formation. We aim to demystify and simplify seemingly complex topics around how to structure a company.

Finance image

GetGround Learning Series: How Do I Form a Buy-to-Let Company?

In the second section of our GetGround Learning series, we go over the building blocks of how to build a company, common pitfalls investors make, and simple solutions. Stay tuned for further videos in

Finance image

The New Normal: Professional Landlords and Buy-to-Let Companies

Professional landlords who hold buy-to-let properties inside a company structure, rather than under their personal name, are on the rise. A record 41,700 buy-to-let companies were created last year.

Finance image

How Do I Set Up a Buy-to-let Company? Part 2/3

Part 2 sharing our best practices on how to set up your BTL company. This section covers what a shareholder is, why that is different versus a director, and the cleanest share structure.

Finance image

How Do I Set Up a Buy-to-Let Company? Part 1/3

Part 1 of 3 on best practices on how to form a BTL company, covering topics such as: SIC codes, bank account, registered office. Make sure to check out Parts 2 and 3 for a fuller picture.

Finance image

GetGround: UK Budget Reaction - March 2021

UK borrowing has hit a peacetime high as the Government deals with the economic and health impact of Covid. This Budget has sought to both continue support for the economy as it emerges from what the

Finance image

The Benefits of Purchasing in a Limited Company Structure

Property investors have long been aware of the benefits of buying property within a limited company structure, however the associated costs and processes have typically been considered prohibitive.

Finance image

Introduction to GetGround: What We Do and How We Work

GetGround was founded on the principle that property investment can be made more efficient with technology. GetGround specialises in setting up and running limited companies- online, anytime and an...

Finance image

Inheritance Tax and the advantages of a limited company structure

There are many advantages of owning investment property in a limited company structure and tax efficiencies are some of the most notable, particularly inheritance tax (IHT).

Finance image

Common Misconceptions about Purchasing a Buy-to-Let Property under a UK Limited Company Structure

GetGround specialises in setting up and running UK Limited companies to purchase Buy-to-Let properties in the UK. All our companies have high quality legal documents and are designed to be tax effi...

Finance image

Ensuring High Efficiency in Buy-to-Let Property Investment

The recent global pandemic has reminded many of us that we value stability, and now more than ever it is advantageous to focus on the assets that are most likely to weather uncertain times. Propert...

Want to get notified when we post articles?

Sign up below and we will email you when a new article is posted.

Thanks! You'll hear from us next time we post an article.
Oops! Something went wrong while submitting the form.
By using this website you agree to our cookie policy