A Guide For New Landlords (Part 2)
On the second part of my guide for new landlords in the UK, I’m going to share some issues, schemes, and myths that commonly plague newbies in the business and I’ll offer a suggestion on how to handle each situation:
The “Property Gurus” Promising You Millions In Passive Income
Try to do a little background check on “property gurus” promising you “financial freedom” with their strategies. Make sure that they have the experience and expertise to back up their claims. Asking feedback from other people is also handy to know if their strategy really works, otherwise the money you spent registering for their seminars would be like flushing money down the drain.
Getting Blinded By BMV Deals
Never ever go to property finding services promising new property at a discounted or below market value price. It’s better to just log on to Rightmove and Zoopla to find houses at discounted prices.
Avoid Paying a Mortgage Broker
I always make it a rule to stop paying for services which I can do on my own, and so far the practice has helped save a ton of money. Dodge paying broker fees by looking for buy-to-let mortgages which are sold directly by the lender. You can also avoid paying for expensive lettings fees. These fees eat up 10-15% of their rents for just somebody to collect the rent once a month. So if you don’t want money to bleed out of your pocket, just do the work on your own.
Furnishing Buy To Let Properties
If you’re renovating the property don’t go crazy about shopping for new and fancy things for your property. Just go to IKEA and pick out basic kitchen and bathroom furnishings and get someone to install them for you!
Dealing in properties is boring
Don’t be fooled by the stacks of paperwork you have to deal with. Being a landlord is exciting! Yes, you’ll have to deal with small tasks like taking care of leaks here and there, but there are times when you also have to resolve complex legal questions between you and your tenant. I guess it boils down on your overall attitude towards the work. If property isn’t your passion, then it’s going to be hard to find joy in property investment.
Remember that it’s not a long shot to build wealth through property. If you look at international rich lists, you can see that many billionaires in the Top 100 earned their money through property. In the UK, probably the most stellar examples for property investment success are the King and Queen of buy to let. They started out like regular investors, but they had the luck to buy the right properties at the right time. Just stick with your business plan and your hard work will pay off in time.