Prospective landlords 'need to do their research'
by Sarah Ashcroft
Prospective landlords looking to engage with the buy-to-let market could leave themselves out of pocket if they fail to carry out research regarding the profession beforehand.
Many would-be proprietors who are attracted to the industry because of high returns and ongoing demand from families struggling to apply for a mortgage are failing to conduct even the simplest of checks before entering the sector, reports This Is Money.
Experts from the Residential Landlords Association (RLA) told the news provider that property owners may risk the value of their investments plummeting if they do not study the market and what the job involves before entering.
Alan Ward, chairman of the RLA, said a high number of landlords engaging with the market are unprepared for the price or the responsibilities they face while owning buy-to-let property.
He added: "For example, what do you do if your tenant suddenly leaves and you must cover the mortgage on the property or you have to pay for emergency repairs? Do you have money set aside? These are questions that many people who are entering the market don't seem even to have considered."
However, the legalities involved in becoming a landlord seem to have done little to discourage individuals from the occupation.
Figures released by the Financial Services Authority revealed that one-in-eight home loans are now being distributed for the buy-to-let sector, which represents the highest figure since records began.
It seems that borrowers who have access to large deposits are turning to the sector to protect their nest eggs from falling savings rates.
Although it may seem like a foolproof option, purchasing properties in locations where rents are already high - such as the north-west of England - could leave landlords struggling to make ends meet if prices continue to fall.
For this reason, Chris Norris - head of policy at the National Landlords Association - recommended proprietors to opt for places they know well, as they are likely to have a better understanding of the market.
For first-time landlords wanting to know their legal obligations, and those of their tenant
, Residential Lettings - A Complete Guide
can help. Written by a residential lettings solicitor, our book is packed full of expert advice on the legal and practical issues that each landlord must face.
Published on: November 21, 2012
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