Many people become a landlord with their eyes wide open. Investing in property is their chosen business. Others don’t set out to become a landlord at all, but circumstances prevail, and they find themselves contemplating renting out a surplus property. Circumstances like inheriting a property or moving in with a partner can leave you pondering what to do with an extra home. Rather than sell, many prefer to keep the property as an additional source of income.
These people are what is generally known as accidental landlords.
Renting out a property is not a decision to take lightly. You will inherit responsibilities and legal requirements as a landlord and it’s not as simple as putting a quick ad online and popping any old tenant into the property.
Talk to the Right People
The first thing you will need to do as a new landlord is sort out the property insurance and inform the insurance provider that you are intending to rent the property. If you don’t and you need to make a claim, you may find that you aren’t covered.
If you have a mortgage on the property, you also need to contact the provider and make sure they are okay with you renting the property. What happens will depend on the type of mortgage you have. You may have to switch mortgage type in order to act as a landlord.
If you are a leaseholder, you might also have to clear things with the freeholder. This isn’t generally a problem but it’s worth checking before you start the process to avoid any complications.
Once the above is organised and you have the green light, you will need to understand your legal obligations and decide whether you are going to manage your property yourself or instruct an agent to look after your interests.
Understand Your Legal Obligations
As a landlord, you will be taking on certain legal obligations and you need to be aware of these. They include ensuring the safety of your tenant, for example, by installing appropriate smoke alarms. You will need to get an energy performance property certificate and ensure the property is fit to live in. You also have the responsibility for checking that tenants are allowed to live in the UK and rent here.
The Government has a complete guide to landlord responsibilities here.
Do You Need to Register?
In Wales, Scotland and Northern Ireland, you need to register as a landlord if you want to rent out your property. In England, it depends on where you live. Some areas require registration, others don’t. It’s a good idea to check with your local council.
Using a Letting or Estate Agent
There are plenty of advantages for landlords when using an experienced letting or estate agent. An important aspect is compliance with the legalities and arranging tenant checks. A good letting agent will aim to make your landlord life as hassle free as possible. Deciding how involved you will want to be is key, once you know this you can then select the service you will need from your agent. Northwood have a variety of different services for landlords: for those who have little time to manage their property we have a Fully Managed Service and for complete peace of mind we have our very popular Guaranteed Rent option, which offers landlords the benefit of a guaranteed fixed income, regardless of whether or not it is let or if the tenant stops paying. For landlords who only need some select support we have our Rent Collection or Tenant Find Services. Click here to see an overview of each landlord service and what each entails.
Becoming a DIY Landlord
Should you decide you want to do everything yourself, you will need to secure a tenant. Assuming your property is now ready to occupy, you will have to advertise it for rental. A good idea is to take a look at similar properties offered online and see what sort of rent they are asking for.
You will also need to interview prospective tenants, request references, put together a tenancy agreement as well as an inventory of the property and its contents (it’s a good idea to take pictures). Once the tenants are in place, you will need to arrange for the deposit to be registered with a Deposit Scheme, be available for maintenance if something goes wrong, handle tenant queries and make sure that health and safety standards are maintained. You may also need to be prepared to consider what happens if the tenant stops paying the rent. We have a host of helpful landlord resources available here.
Decisions to make and Preparing your Property
You will need to decide whether you are going to provide furnished or unfurnished accommodation. You will also need to decide if you want to let the property on a short or long term basis. There may be work that needs to be done such as adding mandatory smoke alarms, you may need to replace carpets, paint rooms or install new appliances. Before deciding what needs to be done to the property it is worth chatting to a Northwood local property expert. They can advise you on the local market, discuss what type of tenant you are looking to attract and give helpful advice based upon your circumstances.
This article is intended to give an overview of information prospective landlords need to consider and whilst we have done our best to cover the more basic elements, we recommend you seek specific advice before you dive in.