There are many ways one can be a landlord. Practically every landlord is a special case since as humans their approach will wary at least slightly. When it comes to basic technical types of landlords, there are two of them. The first is the more casual type, who simply owns a property which they are subletting and they are collecting the money when the money is due and have pretty much no other contact with their tenant. Belonging to the other type are those who aim to make a living solely out of it. They treat their portfolios as full-time jobs and all of their income comes from their properties. Both of these are perfectly valid options. Whether you are going to be one, or the other, depends solely on you. Both have their upsides and downsides, so we prepared a buy to let strategy – a guide for you.

Probably the best thing about being the landlord is the realistic possibility of not actually actively doing anything and still receiving money for it. This may or may not be the case, of course, depending on several factors. If you find yourself a normal, non-problematic tenant and a good managing agent, you won’t have to do much. Generally, your income is, at least, mostly bound to the number of hours you spend working per month. If you successfully manage your properties, depending on the income you make, it is highly possible that you will be earning more money than some hard-working acquaintances of yours.

You can also continue expanding your property by refinancing one property, whose value rose, enabling yourself to purchase another one. Expansion of a business means that the effort you will need to put in rises. However, this also means that your income will rise too. And if moving to NYC, or living in it, a rise in income is one thing you will desperately need.

Buy to let strategy.

Make sure you are capable of becoming a landlord before you become one.

First things first

Choosing a wise buy to let strategy is not a simple task, there’s no doubt about it. Many factors need to be weighed carefully in order to make this decision. Among other things, your personal living space situation plays a major role in this. For instance, you bought a new apartment and you want to move there and sublet your old one. You may be moving from, let’s say, New York to another country, like Spain. In any case, when moving to another country from NYC, or from one U.S. city to another, there are some major administrative and other obstacles that you need to resolve first. Checking in with the authorities and providing them your new information is an obligatory move. Changing your family’s healthcare institutions and transferring your children’s school records is also something that you have to take care of.

Perhaps you work from home and you now have to move your office to your new apartment? No, worries, your business can be relocated quickly and efficiently. You will need professional help, however, and you shouldn’t hesitate to ask for it. Your top priority when it comes to your buy to let strategy is to make sure that you as a future landlord are situated. Why is this important? You need to make sure that you are able to take your potential losses.

Investing in real-estate is one of the smartest investment decisions you can make. Still, bad things may happen despite being prepared for everything. For instance, the real estate market in the neighborhood where your apartment is located may crash and you may find yourself at a loss. So, only when you are sure that you are ready for it, should you start your career as a landlord. 

An entrance to a house.

There are many ways one can earn as a landlord.

The basic elements of your buy to let strategy

No matter what your particular situation with properties, finances, and other relevant elements is, there are some obligatory basic notions that you have to be aware of. These are as follows:

  • The Owner – This is you, the owner of the property and the one letting your property (or at least a part of it) are the landlord
  • Tenant – This is the person that you are letting the apartment too for a (daily, weekly, monthly, etc) rent
  • The letting agent – This is the intermediary between you and your potential tenant. Their role is administrative and (in most cases at least) optional. They may charge both, you and your tenant(s)
  • Tenancy – This is the legal bond between you and your tenant. There are many types of tenancy, with each type bringing its own varying obligations. Different types of tenancies regulate different types of situations.

Of course, it is highly recommended that you make sure that you understand all of the legal rights and obligations of all of the parties that are participating in the letting procedure.

Buying a property

There are two ways that you can earn from your property. The first one is the yield – the difference between the rent your tenant pays and the outgoing expenses. The second one is capital growth, the number which represents how much your property’s value has increased by. So, how does this work in practical terms?

Well, take some towns deeper into the heart of Spain – luxury villas and regular houses both may offer you a large yield if they are important industrial centers for example, but there won’t be much, if any capital growth. On the other side, we have cities like Madrid or Barcelona that can offer a very small yield, while on the other hand not even covering the rent. Still, real estate investors come to these cities hoping that house prices in a particular neighborhood will keep on rising. And with no need for great moving budgets, these cities are the literal goldmine.

Coins spilling out of a white piggy bank.

You can have plenty of benefits from the buy to let strategy.

So what is the best way to find the right place for your buy to let strategy? Well, what you want is a place that has a mixture of good income yield and potential for capital growth. Yield is important, but capital growth is crucial if you want to grow your portfolio. In Spain, they have figured this out, and are selling real estate at higher prices. The best towns and cities for finding such houses and apartments are those where there is always a demand for professionals.  This is where the commuter towns really shine. There you will always have a fresh supply of new potential tenants, and the professionals (and students too, since plenty of them are moving to NY for college), are probably the easiest tenants to deal with.