If you’re thinking of becoming a landlord for the first time, or have acquired a property that you want to let out, follow these useful top 10 tips to help you on your way.
1. Do your research…
…before renting out your property. Assess the suitability of the property. It might be located near a university; so would be most suited to students, or it may be located in a semi-rural location near a good school; in which case it would be best to let out to a family.
Check out websites such as RightMove, and review local newspapers to get an indication of the value of rental prices that are being asked for at similar properties.
A landlord who is renting a property with more than four tenants will also need to get in touch with their local council to check if they need to register for multi-occupancy.
2. Take out suitable insurance
Many landlords are unaware that specialist landlords insurance is needed to cover rented properties. General home buildings and contents policies are not adequate to cover third party risks. Having specialist landlord insurance ensures that you limit your exposure to risk and therefore protects your financial wellbeing.
3. Advertise for a suitable tenant
Look for tenants on reputable websites. If the landlord is looking for student tenants, it’s best to contact the student union who will often provide students with a list of suitable accommodation. Another alternative is to ask around at your place of work, once word gets around a landlord may quickly find himself or herself inundated with calls.
4. Choose and check the suitability of the tenant
In the current rental market, the landlord may find that he/she has to choose from at least five tenants. In this instance the landlord may resort to what is becoming an increasingly popular option; the sealed bid. Once the tenant has been chosen the landlord should check their suitability through a tenant reference.
5. Agreeing on Terms of Tenancy
Before the tenant moves in, the landlord needs to agree with the tenant the terms of tenancy. The tenancy can be fixed or left open-ended. It’s best to have a written tenancy agreement setting out the terms and conditions of the rental agreement.
6. Have photographic evidence
Whether the landlord decides to let out the house furnished or unfurnished, it’s important to have a record of the state of the property when pre-let. One way of recording information is by taking photos, which can be supplied to the tenant to help avoid disputes.
7. Place tenants’ deposits in a reputable deposit scheme
Under the 2004 Housing Act, all deposits have to be paid into a deposit protection scheme within 14 calendar days of receipt by the landlord.
8. Agree on property maintenance with the tenant
Before the tenant moves in, the landlord should discuss any property maintenance, for example; if the property has a garden, have arrangements been discussed? It’s also useful to discuss with the tenant the arrangement for emergencies, for example; a water leakage.
9. Improve the property’s energy efficient rating
Take advantage of government funding to make the property more energy efficient. This will make your property more attractive to tenants. To find out if you’re eligible for the Landlord’s Energy Saving Allowance (LESA), check on directgov.
10. Take out Rental Guarantee Insurance
To protect themselves against their tenant de-faulting, it’s recommended that a landlord takes out rental guarantee on the tenant; these are usually for 6 or 12 months.