Since the release of buy to let mortgages in the 1990’s many investors have purchased properties to rent out. Many of these have gone on to become professional landlords, whereas some have found themselves becoming accidental landlords when coming into money.
Whether you are a new or professional landlord, here are our top tips that you should consider when purchasing a tenanted property.
What is the current rent?
Knowing what the current rent being achieved is essential for working out your yield and return on investment. Understanding if the rent currently being achieved is in line with the current market rate will ensure that you maximise your return.
How long have the existing tenants lived in the property?
Inheriting long-standing tenants can be great when purchasing a property as this heavily reduces the risk of void periods and having the need to find new tenants every 6-12 months. This can heavily reduce your annual profit margins. Something else to consider is whether the long-standing tenants are paying a heavily reduced rent. If so there may be an opportunity to increase the rent to maximise your returns. However, this should be done carefully to ensure you don’t upset your tenant.
Can a rental statement be provided?
A rental statement is something that you should always request. This will enable you to clarify if the clients are or have ever been in arrears and show you whether they pay their rent on time.
Are there any current disputes with the landlord about the property?
Always meet the tenants on the viewing before committing to your offer. Tenants are always forthcoming with anything that they are not happy with. This ensures that you do not inherit any pre-existing disputes post-completion.
Request to see a copy of the current AST
The AST is your way of verifying that all of the information given is correct. It should show you the current rent, amount of deposit paid, length of lease and how many people live in the property.
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