I had a call today from a client of ours who is considering all his options, and wanted to ask my advice. He is currently building a home in Greece, and having invested heavily, needs to start recouping his investment from his current home. His original plan was to use the funds from the sale of his family home to finish his and his wife’s dream home in Greece. However, 18 months later, and his house is still for sale. So he wanted to know, “Should I rent it out instead?”
There are merits and demerits of renting your home out, and speaking as a landlord myself, (albeit accidental!) here are some points to consider before taking the plunge:
- Becoming a landlord is not a short-term fix. You need to commit to it for at least 3 – 5 years in order to fully realise the benefits and avoid losing financially;
- If yours is a unique home, perhaps period and/or rural, you may find your target market to be very limited: tenants are often looking for convenience and practicality, which your home may not offer. Therefore the rent you set needs to account for this;
- As well as convenience, tenants nowadays want all the mod cons: not only will they be looking for a property with contemporary kitchens and bathrooms, you’ll be expected to provide good quality white goods too; dishwasher, washing machine and often a tumble drier are all considered necessities by today’s tenants;
- Allow at least 10 – 15% for maintenance costs, and also repair and renewal costs for the end of the tenancy. I write this on the day that I’ve just had to write out a £2000 cheque for a new boiler in one of my properties – ouch! Most importantly, do not expect to receive your home back at the end of the tenancy in a fit state to try to sell it; you’ll need to invest several thousands of pounds in replacing the carpets, repainting the walls, renewing any worn out fixtures and fittings, and getting the garden looking its best again.
So – lots to bear in mind! Before you reach for the tenancy agreement, think carefully. If you don’t really want to become a professional landlord, and all that it entails, focus on getting your home sold instead. Ultimately, you’ll probably be very glad you did.
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