Buy To Let Updated:
Becoming a landlord will bring with it a whole host of financial responsibilities, but while these aspects are often carefully considered, there's one area that can be overlooked – thoughts of the tenants themselves. Unfortunately, this can mean that many are unprepared for the realities of landlordship, with new research from property management specialists London Shared finding that 30% of landlords surveyed say that it's more stressful than they'd anticipated.
The research highlights the demands placed on landlords, with 76% of those surveyed saying that their tenants don't understand their own responsibilities as renters, and many find that they're on-call 24/7. In fact, 34% receive calls in the middle of the night from their tenants, often for minor issues, which can range from unblocking drains (23%) to lost keys (19%), and even turning on the heating (14%) or changing a light bulb (13%).
Some tenants are causing such severe problems that 24% of landlords have been forced to serve an eviction notice, with the main reasons cited as rent arrears (69%), damages to the property (44%), inappropriate behaviour (24%), sub-letting without consent (18%), and using the property for illegal purposes (11%).
In fact, some landlords find their tenants' behaviour so stressful that they develop anxiety issues (10%), which shows how important it is to consider all aspects of the role before taking the plunge.
However, it isn't just the tenants themselves who can make the career path a difficult one – landlords also have to face myriad complex regulations, not to mention an ever-changing property market, and as a result, 43% of respondents are unclear of their current responsibilities when it comes to repairing their property.
Even more worrying is the finding that only 24% are clear on their legal responsibilities and licensing needs when it comes to houses of multiple occupation (HMOs), a particular concern given that a rising number of landlords are turning their properties into tenancies of this nature.
There's a range of financial obligations to consider, too, and there's far more to think about than the initial purchase price and landlord insurance. In fact, 83% of landlords surveyed are spending up to £5,000 per year on making repairs to their rental properties, and given that so many receive their rental payments late, it could place even more pressure on their finances.
Many landlords are dependent on the income they receive from their rental properties to cover their own outgoings – 50% use it to pay off their mortgage, for example – but with late rent payments (40% of landlords receive payments late) and the additional bills involved with servicing these properties, it isn't always an easy way to make money. As a result, 18% have been forced to default on their own bills, and 11% have been unable to pay off their existing debt.
Given the level of stress involved, it's perhaps no wonder that 13% of landlords wish their property was managed by someone else, with the demands often turning it into a full-time job.
However, that's not to say that being a landlord can't be beneficial. It's becoming an increasingly popular investment choice, particularly since the launch of the pension freedoms, with many people looking for a way to make their money work harder.
As long as you research the area thoroughly, there's no reason why this can't be a viable option – making sure you understand the financial impactions is key, as is finding the right buy-to-let mortgage to ensure you can comfortably cover the repayments, and if you're worried about dealing with difficult tenants, it could be worth considering property management, too…
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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