The pros and cons of renting out your garden cottage / flatlet
Category Investing
Renting out a garden cottage on your property can be an enticing prospect for many homeowners. It offers the opportunity to earn extra income. However, like any decision, there are advantages and disadvantages to consider before taking the plunge into becoming a landlord on your property.
Balancing financial benefits and lifestyle changes
Renting out a garden cottage or separate section of your home is not just about earning extra income; it's about unlocking the hidden potential within your property. Especially with high-interest rates, the additional income can make it much easier to repay your home loan.
However, before proceeding, homeowners should carefully consider the downsides. Sharing a property with a tenant might compromise privacy and lifestyle changes. While renting out a portion of your home can have many financial benefits, homeowners must ensure they are also okay with the lifestyle changes this decision might bring.
Privacy vs. Security
Sharing the same garden space with a tenant inevitably means sacrificing some degree of privacy. Homeowners may find maintaining boundaries and personal space challenging, especially if the tenant is overly intrusive or disruptive. Adding fences and shrubbery can help create greater separation, but it's essential to recognise that some level of compromise on one's privacy may be necessary.
On the upside, having someone else living on the same property can enhance security. A tenant's presence can deter burglars and provide peace of mind, particularly for homeowners who frequently travel or leave the property unoccupied for extended periods. However, it's essential that security concerns are in alignment; some tenants may be a security liability.
Pros of renting out your garden cottage
- Extra Income: Renting out a garden cottage provides homeowners with additional income, which can help them afford home loan repayments and other expenses.
- Utilisation of Space: It allows homeowners to use unused space on their property, maximising its potential and increasing its value.
- Enhanced Security: Having a tenant on the property can improve security, deter burglars, and provide peace of mind, especially for homeowners who travel frequently.
Cons of renting out your garden cottage
- Privacy Compromises: Sharing the property with a tenant may compromise privacy and personal space, which can be challenging for homeowners.
- Dealing with Problematic Tenants: Issues such as late rent payments, property damage, or conflicts with disruptive behaviours can strain the relationship between the homeowner and tenant, leading to headaches for the landlord.
- Maintenance Challenges: Regular maintenance and ongoing inspections are necessary to keep the property in good condition. Surprise maintenance issues can cause financial difficulty for landlords if not managed proactively.
- Rising Costs: Rising council and municipal charges can make rentals and ownership unaffordable, potentially impacting landlords and tenants.
Tips for tenants
Prospective tenants should ensure their credit record is in good shape and provide references from previous landlords. Having all necessary paperwork ready for rental applications, including bank account details, ID documents, employer information, and recent payslips, can make the process smoother.
It's also essential for tenants to have funds immediately available to pay a deposit and any connection fees required. Being clear about must-haves in a rental home while remaining flexible on other criteria can help tenants make quick decisions when necessary.
Allowing pets
Landlords must clearly specify the terms and conditions regarding pet allowances on their property, whether it's a pet-friendly sectional title unit or a freestanding home.
It's equally important for tenants to be transparent about their pets with their landlord. Provide as much information as possible, including confirmation of sterilisation and vaccination and details about breed and temperament. Obtaining written permission before moving in is essential to ensure you comply and to avoid any issues for your pets.
All rental agreements must clearly state that pet owners or tenants are responsible for always keeping their pets under control and ensuring that their pets do not cause any nuisance or damage. If these conditions are not met, the tenancy may be terminated, or the pet may need to be rehomed.
Addressing rising costs and maintenance challenges
Rising council and municipal charges can make rentals and ownership unaffordable. Agents and landlords need to be strategic in handling these costs, especially considering their impact on tenants' ability to pay rent or landlords' profit margins.
Regular maintenance and ongoing inspections are crucial to prevent surprise maintenance issues and keep the property in good condition. Landlords should be proactive rather than reactive in addressing maintenance needs to avoid financial strain.
Weighing the pros and cons and taking proactive measures to address potential challenges will help homeowners decide whether renting out their garden cottages is the right choice.
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Author: Bryce Anderson
