A Guide To Becoming A Landlord
7th October 2019 posted in Landlords
With a prominent level of demand for rental property, it is understandable many people are considering becoming a landlord. Whether your focus is on generating short-term income, creating a new role for yourself, or safeguarding your long-term financial future, there is a lot to be said for being a landlord. However, landlords face many challenges, and you must know what the role entails. Also, you’ll find the support of skilled and experienced agents is vital when acting as a landlord.
At Hunters Forest Hill, one of our hub offices in South East London, we are pleased to say we have assisted landlords in New Cross, Peckham, Dulwich, Brockley, Forest Hill, Sydenham and surrounding towns, and we are here to help you. Here is a guide for landlords.
Researching where to buy rental accommodation
Not every landlord follows the same path. You may have inherited property which you don’t want to use, but you don’t want to sell. You may be trying, and not succeeding, to sell property, and have decided that letting property is a suitable option. There may be a million and one personal reasons why you choose to let a property you already own.
If this is the case, you have the property, and your first step is to consider the local market and the local rental audience.
However, if you don’t yet have a rental property, you should research your options. If you want to buy rental accommodation close to where you currently live or work, your options may be limited. If you are intent on maximising your rental income, you should consider the entire country.
Expected rental yield of an area is essential, and if you are solely thinking about your return, this should be your starting point. The higher the rental yield, the better, as it is a measure of the return on property investment.
If you are unsure of where or how to start in calculating rental yield, contact Hunters and we’ll be happy to assist you.
Who is my ideal tenant?
Your ideal tenant depends on several things, although ultimately, it is a tenant who pays on time and who treats your rental property with respect. Your property or location may dictate the type of tenant who is more likely to be interested in letting from you.
A city-centre flat will appeal to young professionals while a terraced or semi-detached property with a garden is more likely to appeal to families. If you already have a property, target prospective tenants who are likely to rent from you. If you want to have a specific type of tenant in your rental, buy a property, or position your property, to reach this audience.
You can focus on a range of demographics including age, employment status, expected income or any other factor that you believe will help you reach your audience.
The following table shows the breakdown of private tenants, by age, in 2007 and 2017 in the UK, with the figures taken from the Governments UK private rented sector: 2018 information, published in January 2019.
How to set a rental fee when letting property
It is understandable landlords want to know which rental price to set when letting rental property, mainly if you are new to the industry. The average rental rates in the market are a good starting point, but is your property an average property, and do you offer an average service?
If your rental property is better than the average property, and you provide a high-quality service, you will do yourself a disservice by charging the average price. Tenants won’t be willing to pay too much to rent your property, but many tenants are happy to pay for a good standard of service.
Some features which justify a higher rental fee include high-speed broadband, a garden, guaranteed parking, a rooftop area, rooms with en-suite bathrooms. Take time to review the market, focusing on homes which are similar to yours, and comparable landlord services.
Information provided by FarawayFurniture.com, analysing findings from LSL Property Services plc uncovered the leading features tenants are happy to pay more for, and the most common responses are shown below:
Can you be confident of the tenant paying their rental fee?
One of the biggest concerns a landlord has is wondering whether the tenant will pay their rental fee. If the tenant fails to pay rent each month, you may struggle to meet your bills and requirements. It makes sense to have some protection, and Hunters offers a comprehensive range of rent protection products. If you want peace of mind, opt for Hunters Infinity, and be confident of always receiving rent.
Key issues to remember before you let property
If you have undertaken any research into the letting industry, you will know there are many regulations for landlords to adhere to. We are more than happy to talk you through all the rules and regulations, but the following issues are all key factors to consider:
Gas Safety Certificate
If there are gas appliances in the property, you must obtain a Gas Safety Certificate. This certificate must be renewed annually, and the test must be undertaken by a Gas Safe registered gas engineer. The tenant should receive a copy of the document before they move into the property, and the tenant should receive all further certificates within 28 days of the inspection.
Energy Performance Certificate (EPC)
Before you let property, the rental accommodation must have an Energy Performance Certificate, an EPC, in place, and the rating must be E or higher. If your rental property has an F or G rating, it is not eligible to be used as rental accommodation.
Once an EPC has been issued, it is valid for ten years, unless there has been a significant change to the property. There is no need to obtain a new EPC when there is a change of tenancy, as long as the EPC is valid, it remains suitable for a new tenant.
Right To Rent check
Landlords in England must carry out the immigration Right To Rent check on a tenant within 28 days of the tenancy agreement. Any landlord who fails to do this, and an issue arises, can face a fine, so it is best to undertake this step when letting to tenants.
How can you make sure you comply with regulations?
The regulations mentioned above are critical, but they are just some of the regulation’s landlords must comply with. Did you know landlords must comply with 145 laws and 400 regulations? Landlords need help in running their business, and Hunters provides an extensive range of services ensuring you are fully compliant with laws and regulations.
With Hunters Fully Managed Lettings, you can relax, knowing you are fully covered and protected in your activities.
Having the right tenant in place is vital, so it is essential landlords vet tenants and carry out financial and character checks before letting a tenant into their property. If you are uncomfortable vetting a tenant personally, hire a professional to do this work for you, because it is a vital component of letting property.
Steps to include when vetting tenants:
· Undertake a credit check
· Liaise with the applicant’s employer
· Obtain a reference from a previous tenant
· Meet with the tenant and form an opinion of them
· Check the applicant’s social media accounts
You want to ascertain if the applicant can pay the rent each month and whether they will treat your home with respect. This is difficult to determine using previous information, but doing so enhances your chances of selecting the most suitable tenant for your property.
If you follow these steps, you will be in a position to find your ideal location and property, and also find a suitable tenant. There is a lot of work to do after this stage, which we will cover in greater detail, but for anyone considering being a landlord, this guide will help you get started.
You need help being a landlord
Being a landlord is rewarding, but it is challenging, and you need assistance to be the best landlord you can be.
With Hunters support, you can minimise the risk of rent arrears and landlord voids, and you get help and extra protection for any damages beyond the new five-week maximum deposit rule imposed by the Government. Hunters offer thousands of pounds in legal expenses for many situations, as well as guaranteeing rent is paid on time and in full each month, regardless of whether the tenant pays it or not.
For peace of mind, confidence, and having the ability to provide the best service, contact Hunters for fully managed letting services.
At Hunters Forest Hill we cover a wide part of South East London, we know letting your home is hard, but we are here to assist you in the process. If you aim to buy, sell, let your home or rent property, we are active in New Cross, Peckham, Dulwich and Brockley (and many of the adjoining towns), in addition to Forest Hill, so get in touch with one of the top three agents in London, and we will be happy to assist you.