Advantages And Disadvantages Of Landlords

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For many people a property is more than a place to live. It is the start of a whole new lifestyle and better quality of life. What could be better than all of this being financed out of the rent paid by somebody else?
For most landlords a place to retire to is likely to be located on or near to the coast or in one of the 'honey pot' locations: the peaks, the lakes, the Cotswolds, the highlands, the Norfolk Broads.
I set out to find out how practical it might be for landlords to consider buying and renting out a property with the view that one day they would be able to retire and live in it.
The good news for a landlord considering investing in a retirement property is that popular retirement locations are often places that are also
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This means letting the residential investment property under an assured shorthold tenancy. The advantages for a landlord of doing this is that the property should be let year round and therefore a landlord will have a monthly income with which to pay off their buy-to-let mortgage.
The likelihood is that a landlord will need to employ a letting agent to manage their property. A landlord should budget on between 8-15% of the rent to cover these charges.
There are a number of potential problems with buying and letting out an investment property within these locations:
* Acquisition costs can be high, as the properties are often in popular & expensive parts of the UK
* As a consequence of the above and the fact that the local population may not be highly paid and therefore are unable to afford high rents; is that a landlord may only be able to achieve a low yield.
* The results of a low rental yield on the property for the landlord is that they may only be able to borrow a relatively low loan to value because of the limitation on rental cover placed on lending by many buy-to-let mortgage
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Holiday let - downside
But despite the tax gains and potential for high rents, running holiday lets is not for the faint-hearted. It's not unusual for rural properties to stand empty for around half the weeks in the year, making things difficult for anyone seeking a regular income.
Jonathan Smith, of major holiday property agency English Country Cottages, says the average occupancy rate for their 2,800 cottages is around 21 and a half weeks. "Some areas of the country, such as Norfolk, are more popular, however, and average around 23 to 24 weeks occupancy," he says.
In areas with year-round appeal, like the Cotswolds, or big tourist cities such as Edinburgh, Bath or Stratford-upon-Avon, occupancy rates are likely to be higher (see case study below.) However, properties near beach resorts may attract very high prices during the summer, but stand empty for much of the rest of the
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