Renting out your personal home is an excellent option for homeowners and aspiring landlords to have access to a passive income stream if they are relocating, moving away for work or leaving their home for long periods of time.
There are many reasons why landlords might choose to rent out their homes, but some of the most common include:
- To generate passive income. This is one of the biggest reasons why people become landlords. When you rent out your home, you receive a steady stream of income that can help you cover your mortgage, taxes, and other expenses.
- To build equity. When you rent out your home, you are essentially paying down the mortgage with your tenant's rent payments. This can help you build equity in your home over time. Once you have paid off your mortgage, you will own your home outright and you will be able to collect rent payments without having to make any mortgage payments.
- To move in with a partner. Retaining ownership of your current property and turning it into a rental gives you security with a steady income, and the option to potentially regain possession should there be a breakdown.
- To save for retirement. Renting out your home can be a great way to save for retirement. The money you collect from rent payments can be put into a savings account or invested so that it can grow over time. This can help you ensure that you have a comfortable retirement.
- To move to a new location. If you are planning to move to a new location, you may want to rent out your current home instead of selling it. This can give you a steady stream of income while you are looking for a new place to live. More often than not, the monthly rent on properties equals and even exceeds most mortgage repayments.*
*Subject to market value, property value and current financial situation
We've seen this situation be successful numerous times in our journey with many landlords. More recently, we have had a landlord who was being relocated to Portugal through work, his employers were providing him with accommodation and an allowance for food and maintenance. It was a fantastic opportunity, but he had a home and a mortgage here in the UK. Wondering what he should do, he came across Ultralets. After speaking with our Lettings Manager, Jake, he was given options.
He could sell the property to receive a lump sum figure or he could rent the property out, converting it into a passive income stream, with the option to regain possession of his property should he ever need to return to the country or at the end of his tenure abroad. After multiple follow-up calls with Jake for advice and reassurance, this new landlord decided to convert his property to a rental, giving him access to steady income and full peace of mind with his property management being entirely handled by Ultralets' team of experts.
Of course, there are also some challenges associated with being a landlord. You will need to be prepared to deal with things like tenant move-ins, repairs, and maintenance (if you didn't know already, those are our expertise). However, the potential rewards can be great, if you've got the right team backing you. If you are thinking about renting out your personal home, be sure to weigh the pros and cons carefully before making a decision.
There are certainly some important factors to consider before renting out your own home:
- The location of your home. Some areas are more desirable to renters than others.
- The condition of your home. Your home should be clean, well-maintained, and free of any major repairs.
- The rental market. The rental market in your area will affect the amount of rent you can charge.
If you decide to rent out your personal home, be sure to carefully consider the challenges you may face should you go it alone, and consider the benefit of having one of the area's highest-rated letting agents at your back the whole way.
Give our Lettings Manager, Jake, a call
today or drop him an email