Brighton lettings are in high demand, and all landlords will need to make very costly decisions when their property is not occupied. As a landlord, there are a lot of considerations that need to be made to ensure that a property is profitable and sustainable.
Furnished Versus Unfurnished Rentals
One of the easiest ways to increase profits is to offer a property fully furnished. This is a huge incentive for most renters as they can easily move into the dwelling without having the initial expense of buying all of the furnishings themselves. This is especially appealing to younger renters that do not have many of the items needed in an apartment.
Many Brighton lettings are unfurnished. There are a few benefits to this option, including:
- Lesser contents cover costs.
- Lesser worry about tenants breaking valuable furniture.
- Less overall upkeep when new tenants move in.
An unfurnished dwelling will also have a lot of downfalls that need to be noted. These downfalls include the following:
- Lower rental prices.
- Harder to let in some locations.
A furnished building will mostly reverse the benefits and cons seen with an unfurnished rental. The following pros are seen:
- Higher overall rent potential.
- Incentive for younger buyers or students.
- Provides marketability.
The downfalls of a fully furnished rental are:
- Tenants may steal or damage furnishings.
- Insurance costs may be higher.
- Furnishings may need to be replaced.
Furnished lettings are often more sought and will provide a greater incentive to renters. If the property is located near the University of Brighton, the amount of potential renters for a fully furnished property will skyrocket. It is all about location and the consensus is that more people want to let a property that is furnished.
A few concerns when deciding whether to furnish a property or not is that fact that insurance may be needed. Landlords do not have a legal obligation to obtain insurance, but when valuable furniture is present, it is highly recommended that contents insurance is sought.
Income tax exemptions are a possibility when a property is fully furnished. Exemptions are not allowed when purchasing the furniture. However, furniture can be deducted through what is called renewals allowance. This allowance can only be deducted when items are replaced.
Not only is renting flexibility increased on furnished lettings, but the profit margin increase for rent will be 5 to 10 percent in most circumstances.
Lettings can take a lot of time to upkeep. While some landlords choose to have a property manager take care of their property, others are more hands-on and want to manage a property directly. The truth is that either choice is perfectly fine, but there are a few benefits to both.
Self-managed properties have the following benefits:
- Lower overall management costs.
- Faster, easier access when problems occur.
- First-point of contact when tenants have a problem.
Property managers are able to provide satisfactory management for landlords. This is definitely an optimal choice for landlords that have many properties that may be let. The benefits of a property manager are:
- Simple and easy management.
- Landlords simply collect rent.
- Guidelines are followed.
A property manager simply reduces the need for the landlord to always be present when an issue occurs. If a tenant has not paid their rent, a property manager can go to the property and attempt to collect the rent on behalf of the landlord. Property managers will also be able to deal with any property-related issues quickly and easily.
A major concern for many landlords is the contents found within the rental. These are contents found within Brighton lettings that do not belong to the tenant. As a landlord, this can include carpeting, electronics and appliances among many other items.
Many contents, especially appliances, can be very costly. This would be items that are perfect for contents cover. Perhaps the items were damaged by the tenant or stolen, in this event, the landlord may be able to claim malicious damage, but they may alternatively make a contents insurance claim.
The latter is the ideal choice and would suit the needs of the landlord much better.
Contents insurance, often up to 25,000 pounds, is a great option, especially in a furnished rental. What this allows is for the item to be replaced if it is damaged or stolen. These items will need to be put into an inventory that is sent to the insurance provider to be adequately covered. Any new items will need to have their receipt of purchase kept as well as be added to the policy in many cases.
Contents insurance may be included within a landlord insurance policy already, but this is not mandatory.
Generally, a fully furnished rental should always have contents insurance. If letting to students, it is also a wise idea that contents insurance be purchased.