We enjoy working with landlords and helping them manage their property and portfolios. When you’re looking to let out a property for the first time, it can feel like a minefield. It’s our aim to ensure your rental property is let to reliable tenants quickly and hassle-free.
Letting out your property involves meeting certain legal responsibilities and carrying out regular safety checks. It is not possible to provide you with a guide listing every legal point or potential pitfall, so we have provided the most common steps.
If you have any questions, then please give us a call - 01455 360048.
1. Costs vs returns
There are many costs associated with renting out a property, so you need to make sure you will make enough money to create a viable income stream. Your rental yield needs to exceed your outgoings, and you need to be prepared for when the property is vacant. Factor in agent’s fees, insurance, mortgage payments, costs for maintenance and safety checks.
If you are purchasing a property for rental purposes, you will need to factor in stamp duty, property surveys, legal costs, mortgage fees and income tax. You may also need to pay Class 2 National Insurance if your rental property is being run as a business.
2. Prepare your property
Your property needs to be fit for human habitation, which includes removal of any hazards and being in a good state of repair. You will need to deep clean properties at the end of tenancies, and you will need to redecorate from time to time to keep the property up to standard. You will also need to prepare a full inventory of the property for your tenants.
3. Carry out checks
It is a legal requirement to carry out certain safety checks, and these would be at your own expense. Gas safety certificates and electrical safety reports are required, including any appliances. You will need to install smoke alarms and carbon monoxide alarms throughout the property. If you are letting a HMO (house in multiple occupation), there are specific regulations that will apply. Some local authorities require additional licences for HMOs.
4. Engage an agent
There are so many factors to consider that many landlords pass on the management and tenant sourcing to a lettings agent, and they will run through all the legal checks with you. Always ensure they’re reputable, get good reviews, and are a member of a professional body. We are members of propertymark, so your money and property are always protected.
5. Find a tenant
If you have taken the step above, then your lettings agent will help you find a suitable tenant. Decide if you’re happy for your tenants to have pets, bearing in mind that 45% of the UK population own one (Statista, Nov 2020). Check your property deeds to see if you can offer short or long term lets, as in some cases, there can be restrictions.
You are no longer allowed to charge tenancy fees, so you will need to carry out reference checks at your own expense. You will also need to carry out “right to rent” checks, which involves checking a tenant is over 18 years and legally allowed to rent in the UK. If the tenant does not have ID and you need to check their legal status, contact the Home Office.
6. Tenancy agreements
Before you create your tenancy agreement, think about whether you want your tenant to pay bills for gas, electricity, water and council tax. The agreement needs to state the tenancy period, usually this is 6 or 12 months. It needs to confirm the amount of rent to be charged and the deposit, which you are legally obliged to protect in a deposit protection scheme.
By law, you must provide your tenant with your name and address – any rent will not be “lawfully due” until this is done. Also, include a phone number, so they can contact you in an emergency. Once the tenancy starts, you’re obliged to give them the government ‘How to Rent’ guide, which will give you added protection as a landlord should any issues arise.
7. Maintaining the tenancy
As the landlord you have a legal right to carry out property checks, but you need to agree a mutually suitable time with your tenant to do these. Make sure safety certifications are up to date and check any hazards that could harm your tenant. Carry out repairs and maintenance in a timely manner – after all, you’ll want to keep a good tenant for as long as possible.
Hopefully, your tenant will renew their contract and stay with you for as long as you want to rent out your property. But if they do want to end their tenancy, then they will need to give notice, and you will need to return their deposit. You can withhold part of the deposit to compensate for damage but not for general wear and tear; this will involve an inspection.
For more information on letting your property or if you have any queries, please get in touch – call 01455 360048.