Property Investing All-in-One For Dummies (UK Edition)
Buying a property is one of the most wallet-draining and stress-inducing things you’re ever likely to do in life, and the process of letting out that property comes with its own problems and stresses. The more clued up you are in advance, the better prepared you’ll be when a great investment opportunity comes along. This Cheat Sheet gives you the basics.
Facts to Remember about Mortgages
Your property investment will be an expensive purchase, so getting the finance right is absolutely vital. This list gives you the main points to bear in mind when arranging your mortgage.
Don’t accept the first mortgage offered to you by your bank. Shop around to see whether it’s competitive.
Use an independent mortgage broker to find a property loan. Doing so can save you time and effort searching the market for the best deal.
Make sure you don’t overstretch yourself: can you afford to meet the repayments if interest rates rise? To find out, write down your incomings and outgoings. The balance is the amount you can afford to spend on the mortgage each month: if it’s not enough to afford a decent loan, make sacrifices or delay the purchase until you can afford it.
Save up a deposit. Not all lenders require one, but if you’ve got a deposit, you’ll get a better rate, have lower monthly repayments, and won’t have to pay a mortgage indemnity guarantee.
Avoid extended redemption penalties. Paying a penalty for switching mortgages before a fixed offer comes to an end is fair enough, but don’t accept a mortgage with penalties that extend beyond this period.
Watch out for compulsory insurance. Some lenders charge borrowers a one-off fee if they don’t take out their buildings or contents insurance. It might be cheaper to pay this and buy your insurance elsewhere.
Top Tools and Gizmos for Property Investors to Keep Handy
As a property investor and landlord, expect to have to get your hands dirty with a bit of DIY now and then. Keeping the following tools and gizmos handy should enable you to deal with most minor problems that arise.
10 mm or 13 mm variable speed reversible drill/driver
Neon circuit tester
Rental Property Checklist
All the time a rental property is sitting empty, you’re losing out, but you’ll only attract a tenant if you can make your property look attractive and well maintained. Before showing off your rental property to a potential tenant, go through this checklist to make sure your property is looking its best.
After you have legal possession, remove all of the prior tenant’s personal possessions and rubbish.
Check all plumbing (toilets, taps, and pipes) to ensure they are working properly. Make sure that there are no leaks, that the plumbing has the proper pressure, and that there is adequate drainage.
Check all appliances to ensure they are working properly. Run the dishwasher through a full cycle. Be sure that all the racks are in the oven.
Check all hardware. Change the locks and ensure they are operational. Pay attention to all catches and latches.
Check all windows, curtains, and blinds. They should be clean, unbroken, secure, and operate properly. All window locks should be working.
Check all walls, ceilings, and skirting boards. The paint and/or wallpaper should provide proper coverage, without holes, cuts, scratches, nails, or bad seams.
Check all carpets, rugs, lino, and wooden floors. They should be clean and in good condition. The flooring should be properly installed, with no bad seams.
Check bathrooms. Thoroughly clean the toilet, bath, shower, sink, mirrors, and cabinets. Check the toilet roll holder and towel rail to ensure they are clean. Put a new toilet roll in each bathroom.
Check all cupboards, wardrobes, and storage areas. Rails, hooks, shelves, lights, floors, and walls should be clean.
Check all counters, cabinets, and doors. They should be clean and fully operational, presenting no hazards.
Check smoke detectors and all lighting and circuit breakers, for proper operation.
Check all patios, balconies, and hallways. They should be clean and railings should be secure.
Check the heating to make sure it is working properly.
Check the rental property’s kerb appeal, including the front and back gardens, drive, and path up to the front door. Keep them as neat and tidy as possible.
Perform a final inspection of the entire rental property for appearance and cleanliness. Be sure to recheck the property every few days that it lies empty.