A beginner's guide to being a landlord
PUBLISHED: 12:06 19 March 2018 | UPDATED: 12:07 19 March 2018
Considering renting out a property? Make sure you do some groundwork first...
From getting a property ship-shape, to understanding your new legal responsibilities, becoming a landlord for the first time can feel like a daunting prospect.
Whether you’re an ‘accidental’ landlord after deciding to rent your house in a sluggish selling market, or you’re planning to start a property empire, getting to grips with the basics of letting out a home could save you some grief further down the line.
If you are looking to invest, you’ll want to choose your property wisely. Rising mortgage rates, as well as recent tax changes for landlords, may be leaving some seeing their profit margins squeezed, making choosing a property in the right location even more vital for maximising returns. Research from TotallyMoney suggests university cities could be worth considering, with parts of Liverpool, Plymouth, Preston, Nottingham, Bradford, Manchester, Sheffield, Leeds, Cardiff, Glasgow and Aberdeen identified as buy-to-let property hotspots. Consumer group Which? also says, generally, it’s a good idea to choose a property that will be easy and cost-effective to maintain.
With the property taken care of, as David Cox, chief executive of letting agents’ body Arla Propertymark, points out: “Whether you’re a first-time landlord or have let properties before, there are some things every landlord should know.”
Here are Arla Propertymark’s top tips for budding landlords...
1. Prepare your property
As a first step, you should undertake any maintenance which needs to be done. Your property will be more attractive to prospective tenants if it’s had a fresh lick of paint, all repairs are done and, if necessary, new flooring has been installed. Next, you should decide whether to let the property furnished or unfurnished. If possible, consider offering both options, so that it can be marketed to a wider audience.
2. Do your homework
Research similar properties in the local area and find out how much they are being let for per month. If your rent is set too high, or too low, prospective tenants will steer clear. It’s also worth considering what type of renter the property will appeal to, such as young professionals, families or students. Once you’ve done your homework, set a competitive price and aim to keep it filled at all times to minimise rental voids.
3. Know your responsibilities
With your new status comes great responsibility. In the first instance, check that your mortgage allows you to let out your property, as some agreements include caveats to prevent homes from being rented. If you are unsure, speak to your mortgage lender and they will be able to advise you accordingly.
Being a landlord is a 24/7 job, so you may also need to be prepared to receive calls from your tenant at night as well as during the day, as some issues will need immediate attention, such as if there is a gas leak or broken boiler. Be prepared to be accountable when required, unless you agree for your letting agent to manage the property - in which case they will deal with the minor issues.
4. Ensure you’re properly insured
Your existing buildings and contents insurer must be made aware of your intention to let your property, as it’s likely your policy will need to be amended. Specific landlord insurance policies can protect the building, your tenants and your investment as a whole - some policies will also pay out if your tenant misses their rent payments.
5. Vet prospective tenants
You may wish to meet potential tenants before agreeing to let them your property, or you may prefer to leave it to your letting agent, if you use one. An agent can perform reference and credit checks on potentials tenants to ensure everything is reliable.
6. Know your legal requirements
When it comes to being a landlord, there are more regulations to comply with than you can shake a stick at. A written tenancy agreement will help both you and your tenant understand rights and responsibilities and make sure you understand your responsibilities to make sure the property is safe.
7. Choose the right agent
If you do decide to use a letting agent, a good one can take away the stress of finding suitable tenants and also ensure your property complies with any regulatory changes. You will need to factor this into your budget though.