Taking the first steps to become a landlord is exciting, but the hard work is just beginning. Being a landlord is a business, and like any business, there are no guarantees of success. With proper research, effort, and perseverance you can greatly increase your chances of creating a thriving business. Whether a new landlord or one with prior experience, it is good to be up to date on what will be involved and what your responsibilities are. This will greatly increase your chance of success.
Getting Started
Fortunately, renting is becoming the norm in the UK. This is predicted to continue in the future. This article will take you through the process of being a landlord from beginning to end, including the legal side, getting tenants, and finding proper support.
After choosing to lease property, the next step is getting your property up to code and being aware of the local property demand. It would then be necessary to register for self-assessment with HMRC to avoid any difficulties with taxes.
Costs
Although rental income will cover the majority of your costs, it is important to have money set aside in case something happens.
Repairs and Maintenance
If something goes wrong or something breaks on the property, it is a landlord’s responsibility to pay for these repairs. This includes the costs of someone to fix leaks or broken appliances. It is important to keep the receipts because fortunately, they can be tax-deductible.
You will also be required to keep the property up to code, including fire safety, electrical and more. You will also need to consider refurbishing costs and costs of furniture if you decide to rent out a furnished property.
If you decide to use an agency, you will have to pay agency fees as well. Going through an agency means you do not always have to be on-call for your tenants.
Mortgage
If you do not completely own the property, you will still be responsible for mortgage payments.
Landlord Support
You do not have to go through this process alone, which is a relief in the beginning. There is help out there including letting agencies, landlords associations and more.
Letting Agencies
Letting agencies help you manage your property. They do everything from advertising and finding a tenant to being on-call for repairs and maintenance. They can also handle inspections for you. This option may not be preferable if you like to have more control and want to be able to communicate directly with your tenants. However, they are useful in handling the complex details.
Besides letting agencies, you could use commercial credit control services like you can find here. These services create an easy payment structure that everyone is aware of and ensure timely payments of rent.
Landlord Associations
Landlord associations cost a fee to join, but they help to build your reputation as a landlord and make you more attractive to possible tenants.
Legal Responsibilities
The laws and regulations can sometimes vary based on the country and type of let, such as single-let or house of multiple occupations. These are the important steps to get started.
Getting the Property Up to Code
Before renting a property, you will be required to make sure it is in an acceptable condition. This includes:
- Making sure the property has smoke detectors, carbon monoxide detectors and fire extinguishers.
- Getting an electrician to make sure your electrical items are safe
- Make sure the property is wind and watertight
- Make sure furniture meets fire regulations
- List everything in the property with photos of their condition
- Making repairs to appliances (sinks, toilets, baths etc.)
- Making structural repairs
Energy Performance Certificates
It is necessary to have an Energy Performance Certificate when renting out a property. This will let tenants know how energy efficient the space is and if there are any potential saving opportunities. You will need to get an energy assessor who then inspects heating systems and controls and takes photographs. A visual inspection is all that is needed.
The certificate contains typical energy costs and any recommendation that can reduce usage and save money. They are valid for 10 years.
There are also other certificates you are required to get, such as a gas certificate for each gas appliance on the property and a properly working water supply with a Legionella Risk Assessment. It is important to look up the requirements of your specific area and get all the documents needed.
Deposits
Before your tenant moves in, they will need to give you a deposit and first month’s rent. You must put the deposit in one of the approved Tenancy Deposit Schemes within 30 days. You must then give the tenant the amount and date the deposit was received, as well as a statement confirming you are a landlord and the information of the tenancy deposit scheme provider.
Inspections and Maintenance
Doing inspections periodically is important in regards to maintaining the property. The tenant needs to be given at least 24 hours notice of any inspection. The other maintenance tasks would be to make sure you are paid on time and to take care of any problems or repairs that arise.
Tenants
After taking good quality photographs and advertising your property, you are ready to look for prospective tenants. Make sure to know who you are trying to target your property towards and research appropriately. Once you have an interested tenant, remember to run a proper background check to ensure you are renting to a reputable person who can pay on time.
When you find the right tenant, you are required to give them a Tenancy Agreement packet. This will include all the information on the requirements of both parties. If you and your tenant are both happy and agree, they will sign the lease. Double-check the property to make sure it is clean and not in need of any repair before the agreed move-in day.
There is so much more information available to help you through everything. With the right tools and effort, you will become a successful landlord in no time.
