Landlords – by Design or Accident, that’s the Question!
First time landlords are growing significantly as the economy remains gloomy, and divorce continues to pay a price. Experts at the National Landlords Association have shown that 43 of its members did not buy the first property they let out with the intention of ever becoming a landlord.
The view is that there are 5 reasons why people fall in to the landlord arena;
1) The economy
We all know the state of the property market and though there are signs that it is creeping out of recession there are many people in negative equity, and those who don’t wish to sell their home would therefore prefer to rent it out. There have been a huge number of new landlords over the past 3-5 years and new landlords who often find themselves accidently with this grandiose title, realise that letting a property can actually be profitable and hassle free, but not always! It has even caused people we know to move on from their chosen career to become professional landlords. High rental yields, particularly in Mid-Sussex and the City of Brighton & Hove, are being achieved regularly and its unusual for a new rental opportunity not to go to ‘Let’ in more than a week.
2) Children – A sudden change in family numbers can mean an urgent need for space. Moving on to a rental opportunity is often more viable than the long drawn out process of selling and buying.
3) Divorce – Going through a divorce through a recession can mean that the family home cannot be sold for the price wanted. Renting it out brings in cash flow and enables couples to go on their separate ways.
4) Student Property – Holding on to a highly rentable student property bought for children or whomever, is becoming more common and our student landlord base is ever growing.
5) Inheritance – A number of beneficiaries are now choosing to rent their inherited home rather than sell it at a price that they perceive in 2 or 3 years time may well be worth a considerable amount more.
All in all, if you find yourself in the “fortunate position” of having a rental property, then you are quite likely to create a very useful second income stream. Good luck!