According to recent research the number of part time landlords in the UK is on the rise. In fact, one in seven British adults now rents out a property to generate a second form of income. This ‘part time’ landlord trend has generated a £28 billion industry with the average property manager earning an average monthly income of £678.
While the average monthly income sits at £678 London landlords enjoy rents that far outstrip the national medium. In the capital the highest priced rental properties rake in £1,079 while homes in the South East collect £816. After covering the cost of borrowing, management and maintenance fees these properties earn an average pre-tax profit of 40%.
Homeowners choosing to rent rather than sell
One of the major factors driving the ‘part time’ landlord trend is an increasing number of Brits choosing to rent out an existing property when they move house. Rather than sell they find that renting out the property is actually a more cost effective option that generates an ongoing income. When questioned on how they became ‘part time’ landlords 55% of respondents revealed that they were currently renting out properties that they did not originally intend to.
A sway towards private management
While agencies are convenient a huge 49% of today’s ‘part time’ landlords prefer the cost effectiveness of private management. The elimination of middle man fees means landlords can maximise profits and retain as much rental income as possible.
Many fail to meet government guidelines
The number of ‘part time’ landlords is still on the rise yet despite the surge in popularity many private property managers fail to comply with statutory regulations. One of the major legal requirements when leasing out a property is taking out a comprehensive landlord insurance policy. As well as protecting the best interests of your tenants you’ll also be safeguarding your investment and ensuring that the cost of repairing any damage. Landlords insurance can also be expanded to include rent guarantee insurance which will ensure that payments continue to roll in even if tenants fall into arrears or are forced to move out due to property damage.
Joining the ‘part time’ landlord set is a fantastic way to make the most of investment properties and generate a second form of income. Yet whether you lease a compact studio apartment or a multi-level suburban home it’s essential to protect your income with a comprehensive landlord insurance policy that covers scenarios such as fire, theft, missed rental payments, property damage and more.