Buying And Renting Your First Rental Property


Areas to consider when you start out with your first rental property, and your role as a landlord. (Please note this deals with landlords in the United Kingdom…… different requirements will apply in different countries)

Once you have decided that the finances can be put together to allow you to buy a rental property, and you embark upon your project to build a rental portfolio, you have to realise that your role as a landlord gives you an inordinate number of plates to keep spinning together!

Don’t get me wrong, being a landlord is exciting and fulfilling, and with the right advice, it can be very profitable!

With your first rental property (as part of your future rental portfolio!), you will be able to lease it out for financial gain. However, you will now be responsible for a number of legal and safety requirements.

Your responsibilities:

Quite naturally, you realise that the building you have bought must be maintained by you.

In addition to the above, you are now responsible for anyone who rents your rental property.

Unfortunately, you may find that occasionally you may have to deal with tenants who are troublesome and tenants who cause damage in the property.

Legal and Safety Issues

If you are a landlord, then not only do you need to keep your property in good condition, but there are a number of legal safety and maintenance issues that you must adhere to. If you don’t fulfil these duties, you will be potentially liable for any accidents that occur to your tenants whilst they are in the property.

It is obvious that a well maintained rental property will be better equipped to attract tenants and keep your property rental income returns at a healthy level.

In order to help you keep your tenants happy and safe in your rental property, and also keeping you safe from any legal problems I have noted below regulatory requirements you really must attend to:

Repair : Under the” Landlord and Tenant Act 1985″ it is your responsibility to ensure the property being rented is looked after, and kept well maintained inside and outside

Furnishings: The regulation titled “The Furniture and Furnishings (Fire Safety Amendment) Regulations 1993” is important to understand.

Faulty or unsafe furniture and fittings could result in a tenant being seriously injured or even killed. It is imperative that you check your furnishings are both fire resistant and comply with the latest regulations.

Gas safety : Under the latest regulations ” The Gas Safety (Installation and Use) Regulations 1998 ” it is your responsibility to ensure all gas appliances in the property are fully maintained and are covered by an annual Gas Safety Certificate which is implemented by a fully qualified Gas Engineer.

Electrical safety: the regulation “The Electrical Equipment (Safety) Regulations 1994 “insists that all wiring, fuses and electrical equipment are working properly and not a danger to your tenants. An annual Electrical Safety Certificate, carried out by a suitably qualified Electrical Engineer will help ensure your electrical equipment is up to the standards required.

Smoke Alarms: Under “The Building Regulations 1991 – Smoke Alarms” you will find an important piece of legislation. If your property was built after 1992, smoke detectors and alarms that are mains operated must be fitted in the property. This does not mean that you should not fit smoke alarms in older properties. To ensure your tenants safety and your peace of mind, it is a requirement that, at the very least, smoke alarms (battery operated) are fitted in the “danger “areas throughout your rental property.

Energy Performance Certificates (EPCs) : it is now a legal requirement to have an EPC carried out by a qualified person (normally a surveyor) and have the EPC displayed in your property.

Now you have carried out all the above required works, you definately can say that your rental property is ready to be rented out.!

 

If you do nothing else.. read below for your own sake!

It is quite obvious that should you not adhere to the legal requirements outlined above, you will be deemed to be an irresponsible landlord, and, heaven forbid, should an incident occur as a result of your negligence, the words ” not have a leg to stand on” will have real meaning when you find yourself in Court facing the prospect of heavy fines and possible time in HM’s rental property!

The costs to comply are not as expensive as you would think, and the resulting “peace of mind” factor makes the costs involved in making your rental property safe and legal … a case of money well spent!

If you feel that you will not have sufficient time to properly look after your rental property and your tenants, it is quite in order to find a rental agent who has experience in all aspects of property rental.

Although a rental agent will charge a fee, if the rental agent is good, you will end up with a safe and secure property, coupled with tenants in your rental property, providing you with the rental income that you seek.

Give yourself a head start when looking for information and advice when it comes to creating an increasing rental property income when you start to build a rental portfolio. Visit this website http://www.buildarentalportfolio.com for free in depth rental property information and outstanding real estate tips and ideas for expanding your rental property portfolio.

8 Steps Needed To Buy Your Next Rental Property In 90 Days Or Less

8 Steps Needed To Buy Your Next Rental Property In 90 Days Or Less

http://www.biggerpockets.com/renewsblog/2014/03/08/buy-rental-property/ Discover the 8 steps needed to buy your next rental property in 90 days or less. Also, download a free one-page PDF to help you see the “big picture!”

I was sitting down for dinner with a friend the other night and he said to me “Brandon, I want to buy my first property but there is so much information out there. I just want to see the whole process, neatly outlined, so I know my step by step plan.”

And I thought “Isn’t’ that we all want when learning something new?

We want to see the whole picture, not just broken up parts.

Today I want to help you do just that — learn the step by step process for getting your first rental property in the next 90 days. For those of you who like something tangible to look at, at the end of this post I’ll show you where you can download a free 1-page PDF summary of this process- neat and clean, just like my buddy ordered.

Alright, let’s get started.

Step one: Get Pre-Approved.

Unless you plan on paying cash (which would be great) you are going to need a pre-approval letter from the bank or other lender.

We start with this step because I don’t want you wasting time only to find out you can’t afford it. Your lender will help you know exactly how much cash you’ll need.

Step Two: Get in Touch With a Real Estate Agent.

Don’t just call the name on the park bench by your house.

Look for an agent who is willing to spend the time needed to help you get the perfect deal.

Get recommendations from others and pick someone you get along great with.

The best part is, a real estate agent is paid by the seller- so it’s free for you to use one!

Step Three: Define What You are Looking For.

Let your agent know exactly what kind of property you are interested in. If it’s a duplex, you don’t want to waste time looking at single family homes. And vise versa.

Step Four: Start Looking

Yes, you’ll actually need to spend some afternoons with your real estate agent looking at potential properties. And like dating, the more you look at, the better you’ll recognize “The right one” when it comes along.

Don’t be afraid of looking at properties that might need a little TLC, but don’t get in over your head either. Once you find the right one, you’ll need to do Step Five, which is

Step Five: Do The Math

A rental property is only as strong as it’s math. (yes, you should Tweet that)

Run the numbers and make sure it pencils out. Be conservative, and be sure to plan for property management, vacancy, repairs, and more.

I’d recommend running the numbers through a good property analysis tool, like The BiggerPockets Rental Property Calculator to make sure you are looking at all the facts and figures.

Moving On

Step Six: Make an Offer

Okay repeat after me:

I WILL NOT OVERPAY

Negotiate with the seller and stick to your math from step 5.

You might go back and forth a few times, and you might even lose the deal and have to start over. But whatever you do …

Do Not Overpay.

Soon enough you’ll get an offer accepted and you’ll be ready to move on to

Step Seven: Do Your Due Diligence

At this point, you want to make sure there are no hidden surprises at the property.

Hire a property inspector to walk through every inch of the property looking for potential problems.

If you find any, either :

suck it up if it’s not too bad,
ask the seller to fix it if it is bad,
and if it’s really bad — walk away.
During this time your agent will help you shuffle the correct paperwork between them, your lender, and your title company.

Step 8: Close on the Property

It’s been a journey, but finally you are ready to close.

You’ll show up to the Title Company (or attorney) and they’ll take care of the rest. You might even get some chocolate at the front desk! Once the title and deed are recorded at the county, you’ll get the keys and be the proud owner of your very own rental property!

Now comes the fun part — managing your properties. And for tips on that, you’ll have to wait for another blog post!

Screen Shot 2014-03-07 at 5.27.08 PMAs promised above, I created a simple 1-page PDF of these steps so you can print it out and hang it on your wall or just keep in your files. To get it, simply click the photo on the right and head over the BiggerPockets FilePlace and download it for free!

Finally, if you could do me two quick favors:

Share this video on your Facebook or Twitter account
Leave me a comment below. I love comments and would love to chat more about this stuff!

8 Steps Needed To Buy Your Next Rental Property In 90 Days Or Less