According to
finance experts at Investopedia, landlords not only survive recessions, but they
thrive, as renting becomes more appealing than buying in the economic downturn.
After all, owning rental properties guarantees them an income, or does it?
In this quick
read, we look at why landlords aren’t always immune to recessions and ways you
can protect your rental portfolio.
Check your mortgage
Is your mortgage
term about to expire? How long do you have left? If you’re lucky enough to be
at the start of a low interest fixed-rate buy-to-let mortgage, you can breathe
a sigh of relief. If not, it’s time to contact a broker and find yourself the
least painful deal. A sure-fire way to lose out is to ignore your mortgage and be
forced to renew when rates are at their highest.
Insure against rental
loss
Hopefully, you’ve
already got comprehensive landlord insurance which provides rent protection,
but if you don’t, a recession is the right time to get it. Rent protection
insurance will pay out in the event your tenant fails to pay – protecting your
income and, more importantly, covering your monthly mortgage payments.
Work with a letting
agent
As rental demand
surges, you’ll need a good agent to manage the viewings and reference checks
that help secure the best tenants for your rental property. Agents take on the finer
details of a tenancy agreement and can offer advice during the letting process.
Use their experience to bag yourself reliable tenants.
Don’t get greedy
While you may be
contemplating a rent rise to cover increased costs, remember that setting your
rent too high could increase the risk of a tenant defaulting or a tenancy
ending abruptly due to financial pressures. Take a cautious approach to annual
rent rises; it’ll pay off in the long run.
Be reasonable
If a tenant fails
to pay their rent on time, find out why. What’s the problem? If they’re a
long-term and previously reliable renter, can you respond in a calm and
measured way? Eviction is not an easy route to take. Speak to your agent to see
what advice they offer and how they would deal with the matter.
If you’re a landlord and need a reliable letting
agent, contact Ridgewater Sales and
Lettings so we can find you the right tenants.