Being a landlord

There are various circumstances in which letting out your property, or part of it, will suit your current circumstances, for example, you may have inherited a property which you do want to sell immediately or maybe you have a second home that is not being fully utilised and could possibly make you some money.

If any of these scenarios are relevant, than here is what you need to do to become a landlord;

Getting Started

Before you sign up with a lettings agent, you should find out about the financial, legal and regulatory matters involved in becoming a landlord.

Finance

It is imperative that you check with your mortgage lender before letting your property. Write and tell them that you want to let your property. If you do not get their written permission then you could be in breach of your mortgage.

Check your lease

If you live in a leasehold property, you will need to check your lease to make sure that you are not breaching any terms by letting your property. This could result in fees for granting consents, any special conditions may be involved and it will be up to you to make sure that your tenant and letting agent are aware of these conditions.

Insurance

Your current building and contents policy will probably not be suitable for application in the lettings market. Tenants are perceived to be more careless than an owner/occupier so you will probably be facing an increase in your premium to cover damage, or we can provide insurance services. for you.

Letting agents

When and if all the above items are in order, you can then sign up with a lettings agency. Using an experienced agent will save you time and money in the long run. The agent will have a list of clients looking for a property like yours; they will make contacts, arrange appointments and show people around your property, check references and draw up tenancy agreements.

Choosing an agent

You may wish to pick an agent which is bonded to a professional body such as the Property Ombudsman, of which we are members.

If you are not comfortable with an agent, its premises, staff and practices, just walk away without committing yourself to anything.

Don’t base your choice just on what the agent says it can get for you in terms of rental income. The reality may be lower than at first suggested by the agent. If you are unrealistic and too greedy, your property will remain vacant for some time and you may lose potential rent.

Shop around for an agent; find out what your local agents charge and what is included within the fee. Don’t always go for the cheapest option, but look at the range of services available, these can include items such as tenant's insurance or emergency repair insurance .

Does the agent have an acceptable level of professionalism? Look for well maintained premises, clear advice and literature.

The landlord agrees to provide the property in a good and lettable condition and that the property, beds, sofas and all other soft furnishings conform to the current fire safety regulations.

Legal responsibilities

As a landlord of a property, you would be responsible for the safety and maintenance of a rented property and their contents so that no injury or damage is caused to the occupants, neighbours or the public. Fulfilling these responsibilities as a landlord during a tenancy can be time consuming, so you could consider using the services of a property management company such as Arron James Karis to fulfil these duties on your behalf.

Under the Landlord and Tenant Act 1985, there are 3 main areas of responsibility when you have property to rent under an assured tenancy:

Structure

As a landlord you are obligated to keep the structure and exterior of the property in good repair. Tenants will not be charged separately for this work, although a provision for these works can be incorporated in the rental price. As a landlord, you are responsible for making sure that the following items and areas are safe and fit for use, as well as making repairs when necessary.

The structure and exterior of the property.

Hot water installations, as well as the supply of water itself.
Basins, sinks, baths and other sanitary or drainage installations.
Ensuring an adequate provision of lighting, heating and ventilation.
The treatment of any health-threatening damp.
Anything else that you mutually agree with the tenant in the tenancy agreement.

Landlord’s Rights

As a landlord, you or your agent are allowed access to the property for two main purposes, both of which are usually detailed in the tenancy agreement.

These are to conduct visual reports in order to monitor its condition and ensure that tenants are abiding by the terms of their agreement and to show the property to prospective tenants when the current tenants are moving out. In both cases, you are required to give the tenants 24 hours’ notice.

Under the Rent Act 1977, you have the right to seek possession of your property under any of 17 assorted legal grounds. You cannot evict the tenant without a possession order from the court.

Room to Let

There are hundreds of households around the country where a single room in a property is rented out to a lodger. Under these circumstances, the government has special rules regarding the taxation of income under the rent a room scheme.

This allows you to let part of your home and can currently generate a tax free income of up to £4,250 per year, this equates to a monthly rent of just over £350, If you generate more than this level of income you are currently taxed on the gross rent you receive in excess of £4,250. If you are within a rent a room scheme, you lose the right to deduct expenses from your rental income, as it is not considered a commercial venture.

Income for ancillary services such as providing meals or washing can be added to your rental income and incorporated into the rent a room scheme. However, you should check with your accountant that this does not qualify as carrying on as a trade, as this would put you outside the bounds of the rent a room scheme.

Letting your property

There are many reasons why you may find yourself letting your home to tenants, if you are letting your home and eventually want to move back into it, make sure:

It is essential you have a professional inventory carried out, to document the condition and contents of the property.
You sign a legally binding agreement that allows you to regain possession of your home should the tenant decide not to leave.
You take a large deposit from the tenant to cover any damage or loss that may have occurred.
Tell your mortgage lender and household insurance provider what you are doing; even with a short term let you still have much the same obligations as a normal landlord as regards fire safety, gas appliances and so on.

Buy to let

This is an increasingly popular investment where you buy a property specifically to let it to other people such as students, key workers and people who either don’t want the responsibility of owning their own home or who cannot afford it.

Buy to let requires a special knowledge of the marketplace, mortgage products and insurance options that are open to you. A property investment adviser can help you arrange your mortgage, explain and discuss the different choices you face and how suitable they are for you.

If you decide to invest in a property for letting purposes, you should consider the following points which will help you maximise your income:

Transport – is the area well served by a variety of local and national transport networks? If not, is there something panned for the future?
Safety – is it a crime hotspot and is there a neighbourhood watch scheme?
Amenities – is the property within easy reach of shops, schools, colleges, sports facilities, restaurants, pubs and cafes? Is this balanced with public parks and other green spaces?
Environment – does the exterior of the property look good and fit with others in the street? Is it near an airport or sewerage farm? Does it back onto a railway line? Is it overlooked by pylons or mobile phone masts?
Neighbours – no one wants to live next door to noisy neighbours and barking dogs, find out what people who live locally are like and make sure they fit the same profile of the people you want to rent your house to – professionals, families, and students.