Top 10 things all new landlords should know
Whether you’ve just inherited property or are looking to rent out your current home while you move onto pastures new, the whole business of becoming a landlord can seem daunting at first.
Of course, there are guides to renting your home that you can read – many of them on our very own website – but sometimes you just need an at-a-glance list of the most important things to remember when renting out property.
Luckily, we’re on hand to shed some light on the ten things all new landlords should know before dipping their toe into property letting.
Remember, if you’re thinking about becoming a landlord, check in with your local Wards branch first. We can help you through the entire process, from finding tenants to collecting rent. You can rest assured that whatever you need, Wards will have it covered.
1. Make sure your rental property is up to scratch
What is the current state of the house or flat you’re renting out? It’s a given that you’ll have certain landlord obligations – some of which will concern the property in question. Is it a turn-key property or does work need to be done to make it a liveable space? If the latter, you have an obligation to do all of the necessary work before your tenants move in.
Bear in mind that your home must also comply with specific requirements in order to make it a legally compliant home for your new tenant. These can include everything from wheelchair ramps to smoke alarms.
2. Tender loving care goes a long way
It goes without saying that houses or flats that have benefited from generous investment can demand higher rent. If you’re looking to turn a profit, then you’ll need to make this a home that tenants will want to live in.
Budget for any renovation or general TLC to bring it up to scratch. A lick of paint in the lounge, a new carpet in the bedroom, regrouting the bathroom or a new sink in the kitchen can all breathe new life into the respective room. In our experience, properties that look and feel great from day one are better looked after by tenants.
3. Assess the current housing market
Any good landlord should make it his or her obligation to know their competition and recognise what your potential new tenant will look like.
Will you be a student landlord, or will you provide rental properties to young professionals? Both are very different tenants and will have different expectations from their landlord and what they want out of their potential new home. For example, should you convert that 4-bedroom family home that’s near a good primary school but little else into 4 single-occupancy flats? Probably not. Focus on your property’s strengths and position it correctly.
4. Manage your property with a letting agent
So, the property is up-to-scratch and you know who you want to target. Now you need to decide if you want to go at it alone or have a letting agent help you manage your property…
You can enlist a letting agent to manage all or part of your let. So, if you’re not comfortable with collecting rent every month, you can arrange for a letting agent such as Wards to do this on your behalf. If you currently work full time, you may decide to go for a fully managed let – so if the boiler goes or if a window is broken, you’re not called upon to fix it; your agent will organise this for you.
For free, impartial advice about becoming a landlord for the first time, get in touch with our lettings team, who will be happy to share unbiased and professional expertise and knowledge with you.
5. Register with HMRC
All good landlord blogs will tell you that you need to register with HMRC so you’re taxed accordingly. The first £1,000 of your income from property rental is tax-free but chances are, you’ll bring in an income well-above that through the course of a year.
There are different tax rules for residential properties, furnished holiday lettings, and commercial properties so it’s important to look into this before deciding how best to market your rental property.
If you do not usually send a tax return, it’s important to register by the 5th October following the tax year you had rental income.
6. Keep to a budget
Budget accordingly and rental income should cover the majority of your costs. It's always wise to put aside a contingency budget in case things unexpectedly go wrong, like if the roof springs a leak or the property is empty for a long period of time.
Furthermore, any sound businessman or businesswoman will want to not only protect their property and investment but also their tenants. Spending the extra money to improve health and safety will pay back in dividends and bring you good karma. Also, it’s the law.
In becoming a landlord, you’ll need to get your property and business up to code, such as making sure smoke alarms are fitted on all floors and carbon monoxide alarms are installed where required.
Furthermore, as of 2018, properties need to meet a minimum energy performance standard in order to make the property compliant. You tenant will be grateful for cheaper bills and it’s also good for the environment.
Other landlord obligations also require you to consider accessibility needs for disabled tenants under the ‘duty to make reasonable adjustments’ section of the 2010 Equality Act or keeping tenant’s deposits in a Tenancy Deposit Protection Scheme.
With all of the points above, if you’re still unsure, a letting agency can deal with this on your behalf.
7. Choose the right insurance
When it comes to insurance, landlords need to have building insurance which covers accidental damage like fire and flooding, whereas the tenant should get contents’ insurance if they want to protect their belongings.
8. Join the Landlord Association
Budding landlords may want to invest in a Landlord Association membership – especially if you think this might be something you will eventually do as a career. As a Landlord Association member, you’ll build up your professional reputation and have access to a wealth of knowledge and resources to help run your investment.
9. Consider your new tenant
You’ve done the background checks, carried out the necessary requirements and are now fully compliant. Next, you’ve agreed the rent and finalised the tenancy agreement and your tenant moves in… and that’s it.
Or is it?
Although you own the house or flat, don’t expect to waltz in unannounced. The law states that you have to give at least 24 hours’ notice before stopping by your tenant’s house. At this stage though, you’ve been well-prepared and neither you or your tenant should hear from each other unless something goes wrong or either one of you have an inquiry.
Keep your relationship professional and courteous. Respond to your tenant’s messages right away and be proactive with any fixes or repairs you’re responsible for. It also pays to be lenient with regards to pets or wanting to decorate – let’s face it – magnolia paint isn’t the most exciting colour to adorn your walls.
Also, don't be afraid to go that extra mile by sending cards or a gift at Christmas or their birthday. Your tenant will appreciate the gesture and you’ll seem exactly like the considerate and thoughtful landlord you are.
10. Giving notice to tenants
Finally, as a landlord, giving notice to tenants may be something you’re likely to contend with.
Notice can be served in line with your Tenancy Agreement unless the break clause indicates otherwise. Under ordinary circumstances to evict a tenant you have to allow a minimum of three months, though if there are issues your letting agency can advise you otherwise.
Follow this advice and you should be prepared to deal with anything that life as a landlord should bring. Good luck!
To find out more about using our expert managed letting service, get in touch.