How an “empty homeowner” can become an “accidental landlord”… | Red Key Property Services
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How an “empty homeowner” can become an “accidental landlord”… and then a long-term property investor

Do you know there are in excess of 200,000 empty homes in the UK? Perhaps you’re the owner of one, and wondering quite what to do with the house or apartment that has come your way – perhaps because of an inheritance, or because you and your partner both owned homes before you got together.

Perhaps the property is co-owned, by two or more members of a family who have inherited from their parent, and no one can agree on selling. Or you want to keep your options open for the future when a son or daughter will be looking to buy their first home.

Equally, with house prices seemingly continuing to rise, do you REALLY want to sell it now?

But then there’s the issue of keeping it maintained, dry and secure…

Well here is a solution: become an “accidental landlord”. That way you can have the very best of both worlds. Let me explain.

There aren’t any official statistics for how many “accidental landlords” there are in this country, but they certainly make up a large part of the portfolio we look after: people who have a property they don’t want to sell – but don’t want to manage either.

Certainly not with the new regulations coming in under Rent Smart Wales which will certainly weed out some of the rogues owning and letting properties these days but mean you will have to be licensed and undergo training.

The solution is simple: let it through an established agency. You get a healthy, secure income, the property is kept maintained and safe and – the icing on the cake – you get to pocket the rising value of your property.

Using a licensed agent means you don’t have to fret about issues such as council tax, water rates, utilities and void insurance. Garden maintenance? That’s someone else’s problem too.

So if you do go down this route, what sort of return can you expect? Well typically, a house or apartment in Wales valued at £100,000 would attract an annual rental of £6500. Take out fees, insurance, maintenance and so on, and you would (again typically) expect an annual return of £4870 – or 5% net. That’s a lot more than you could expect from other traditional forms of investment, and you can also enjoy any capital growth.

The only caveat: to get maximum returns you need to keep it fully occupied. This is where the good agent earns his fees. Our average vacancy period is currently just seven days – achieved because we have a waiting list of pre-qualified tenants, so as soon as we know a vacancy is coming up, we can usually pre-let it. Most of the properties we let never even get advertised.

Of course, you might need to speculate a little to accumulate, especially if you have inherited a property that really needs updating. At the very least we always recommend that properties are pre-prepared for letting, which means decorating them professionally as well as doing any necessary maintenance work and (of course) ensuring that all appliances and power systems are 100% safe.

The upside? You get a better calibre of tenant who will not only pay a higher rent for a higher quality product, but who will also respect and look after your property.

And if you don’t have the ready capital to make that happen, we can always guide you through the process of getting a buy-to-let mortgage. This will allow you to borrow against the value of the house on what are commercial terms: they won’t, for instance, stop you keeping your existing mortgage.

They might even allow you to pull some capital out of the property to sort out any expensive debts you’re currently carrying – now that’s definitely a win-win! There’s more on buy-to-let mortgages in this accompanying article: http://blog.redkeylets.co.uk/buy-let-mortgages-facts-need-know/

Of course you might then find that being an accidental landlord is such an easy way to generate income and secure your long-term future that you use the money you generate to fund your next property…

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