How to become a Landlord..
There are plenty of reasons why you might be considering becoming a landlord in 2021. Maybe the government’s stamp duty holiday encouraged you to invest in buy to let? Or perhaps the UK’s seismic shift to home working has encouraged you to enter into property management.
While the past year has brought its challenges to the private rented sector, there are still plenty of good reasons to become a landlord. With interest rates hovering around zero, property offers a good rate of return both in the long and short term. Plus, demand for good, well-located rented properties is likely to remain strong for the foreseeable future, as job insecurity and uncertainty in the housing market encourage people to rent rather than buy.
Whatever your motivation, the most successful landlords are the ones who do their research; getting on top of all the legal and financial implications of the role. To explain we answer some of the questions new landlords often ask:
Why do people become landlords?
Some people become buy to let landlords to increase their income or to supplement a pension. For others, it’s more accidental – people who’ve acquired property through inheritance or after moving in with a partner or relocating abroad.
What does being a property landlord actually entail?
If you’re thinking of becoming a UK landlord, it’s important to understand more about the role. Do plenty of research, getting up to speed with right to rent checks, gas safety inspections, security deposits and the latest position on a tenant who falls behind with their rent.
How can I be a successful buy to let landlord?
Successful buy to let landlords know that renting out property is a business not a hobby and approach it in a serious and meticulous way.
This means being organised with your paperwork and records, learning how to market your property at the right target audience and taking clear decisions, based on the best business case.
You should also take a professional approach to dealing with your tenants, maintaining open communication at all times, while remembering that yours is a business relationship not a friendship.
What should I check before I decide?
If you’re thinking of renting out a property you already own, first make sure you are able to do so. If you have a normal residential mortgage, it is likely that you’ll need to move to a buy to let product, which could cost you more and involve redemption fees.
Your buildings insurance may be invalid too, and there could be terms in your lease which prohibit you from renting your home to tenants. Make sure you check all of this out.
Should I rent out my property furnished or unfurnished?
Furnished properties often attract higher rents, but you may need to spend money up-front to fit them out and you will need to insure and maintain the items you include. Your decision should be influenced by the type of property you have. Small, city centre flats are more likely to attract young people with fewer possessions who prefer furnished. Larger houses will attract families who may wish to bring their existing furniture with them. There is plenty of advice about this online.
Do I have to allow pets?
Landlords tend not to like tenants having pets, because of fears about smells, damage and allergies. Yet there’s a growing movement to encourage more pet-friendly rentals. Being open to well-behaved pets may increase your pool of potential tenants and allow you to charge a higher rent. Even if you’re not keen, be aware that the government is looking at legislation to prevent pet bans, so keep on top of the news on this issue.
Can I ban tenants from smoking in the property?
You can include a no-smoking clause in your tenancy agreement and advertise the place as being for non-smokers – although in reality, it may be difficult to police and evicting someone because they smoke could be tricky. But if you definitely don’t want smokers, make sure you say so early on.
What are the costs involved in being a landlord?
Factor in all the costs of becoming a landlord, to work out whether it is right for you – particularly if you are considering buy to let. Be realistic in calculating your outgoings and the rent you are likely to achieve, remembering to account for any void periods.
Take into consideration all of the costs you will face including your buy to-let mortgage, which is likely to cost more than a residential mortgage, landlord insurance and letting agent fees, plus the cost of furnishing the home and carrying out maintenance and repairs.
What are my responsibilities as a landlord?
As a professional landlord you must fulfil certain legal and health and safety obligations and comply with a range of regulations.
- Landlords are responsible for most repairs and maintenance in a rental home. This includes the electrical wiring, plumbing and sanitation, heating and hot water and the external structure of the building.
- You must ensure that the property is fit to live in throughout the tenancy. If the tenant believes you haven’t fulfilled your responsibilities, they can take you to court. Issues, which might make the property unfit for habitation, include damp and rodent infestation.
- You need to make sure that the gas supply and all gas appliances in the property are in a safe condition. They should be fitted, repaired and checked every year by a GasSafe-registered engineer. This applies to gas pipework, cookers, boilers, fires and water heaters.
- You need to make sure that all electrical wiring and plug sockets are safe. You should organise an inspection by a qualified electrician, followed by regular basic safety checks.
- There should be working smoke alarms on each floor and carbon monoxide detectors in any room heated by solid fuel.
- Your tenants must be provided with certain documents including an energy performance certificate and a copy of the government’s How to rent checklist.
- You are required to protect your tenant’s deposit in a government-approved scheme.
- If renting out property in England, you must check your tenant has the right to rent your property.
For further advise on becoming a landlord or indeed successfully growing your existing portfolio contact James Allen directly on 07773 412300 or email james@allen-residential.co.uk
