What is a landlord?
A landlord is someone who owns residential properties and lets them out to tenants. There are typically two types of landlords: accidental and professional.
Accidental landlords usually only become a landlord if they inherit a property or if they move home and keep their original property.
Professional landlords usually have multiple properties and see being a landlord as a business as opposed to an additional income stream.
If you are considering becoming a landlord, you may wish to consider whether you will be a landlord who manages the property and the tenants solely, or if you employ the services of a local letting agent to help manage the properties on your behalf.
Why become a landlord?
Since 2000 the private rental sector has been on a steady incline. Currently, there are over four million privately rented households in England alone, which amounts to around 20% of the total number of households. This makes owning and renting property a viable revenue stream.
Not only does being a landlord provide a passive income, but it's also a clever way to protect your assets. Usually, the returns for bricks and mortar are greater than traditional saving streams.
However, being a landlord is a commitment – but with the help of a letting agent it can be easily managed.
How to become a landlord?
Becoming a landlord in the UK isn't as easy as just buying a property and then finding tenants. There are a number of rules and regulations, as well as tax implications involved when you become a landlord.
By law, you need to register as a landlord if you're renting out a property in Scotland, Northern Ireland and Wales.
Depending on your location in England, you may need to register there too, so it's worth checking with your local council to find out if it's required in your area or contact your nearest Hunters’ branch and our local letting agents will be able to give you more information.
What are the costs involved in being a landlord?
Being a landlord comes with some costs that you may have factored into your rental amount, but there might be some additional ones you hadn't considered. Knowing what the costs involved are can help you create a budget and to help decide whether it's more cost and time effective for you to opt for our Fully Managed landlord package.
Repairs – If something goes wrong or breaks in the property that wasn’t caused by the negligence of the tenants, then you might have to repair or replace it. When paying for any repair or replacement costs for the property, it's important to keep all receipts regarding items bought or professional services you've paid for, as these are classed as business costs and can be tax deductible.
Mortgage repayments – If you took out a mortgage to pay for the rental property, you'll need to continue to pay the mortgage.
Insurance – You'll need to have proper landlord insurance to help cover your investment. This will help protect you, your property and your tenants should an unpredictable event like vandalism, fire or flood occur. Having adequate insurance will also help protect you should your tenants injure themselves on your property if the injury was caused as a result of your negligence.
Agency fees – Choosing to hire a letting agent to handle any problems or general correspondence with your tenants takes the hassle away – as well as some of the admin tasks – and is a worthwhile investment for most landlords, regardless of whether they have one property or a whole portfolio.
Solicitor's fees – When drawing up a tenancy agreement, having a solicitor check it beforehand will help ensure you are complying with the law and that it is legally binding and watertight.
Ensure your property is fit for purpose – A rental property doesn’t need top-of-the-range fixtures and fittings, but you should be aware you'll need to spend money on any areas of refurbishment. There are also the costs involved in ensuring the property is fit for purpose and legally habitable. This includes ensuring all fire safety precautions are in place, the electrics have been looked at and signed off and much more.
Furniture – If you're planning on letting your property 'furnished', you might need to replace any old and tired furniture and ensure furniture like sofas have a fire safety label attached.
Energy Performance Certificate (EPC) – These are a legal requirement for all properties, whether they're being sold or let. EPCs last for ten years, so you don't require a new certificate for every tenancy.
Landlord Association membership – Although not a legal requirement, joining a landlord association brings many benefits, including accreditation, networking events, and plenty of additional and invaluable free advice.
Things to consider about your rental properties
There are some important considerations you should make before renting out your property, as they will have an impact on the type of tenancy agreement you need, as well as the type of landlord services you require from your local letting agent.
- Letting the property furnished or furnished: A furnished property may attract a higher rental value, but the costs involved in replacing and repairing damaged furniture could soon add up.
- Allowing pets: With more and more people having pets it widens the pool of tenants, however, they could cause damage to property and furniture.
- Allowing smoking: Smoking is not only a fire hazard, but the smell of someone who smokes – even if they don't smoke in the property – can cause the property to smell, which increases cleaning costs between each tenancy.
- Hiring a letting agency: A letting agent may be an extra expense, but they can take on a lot of the day-to-day running of your property, including arranging workmen to carry out repairs, chasing outstanding rental payments, and ensuring all certificates are up to date. If you're unsure about hiring a letting agent and the level of landlord services you require, you can call any of our offices and we'll be able to talk you through your options.
Can landlords change letting agents?
If you're a landlord and are unhappy with your current letting agent, there's a misconception that you need to stay with them until the end of your agreement. Many people also think it will be a hassle switching, but landlords changing letting agents is really quite simple.
If you're worried about losing your tenants if you switch letting agents, you shouldn't. When you sign a Tenancy Agreement it is between you, the landlord and your tenants, not between you and the letting agent. When you hire a letting agent, they are simply working on your behalf.
If you're ready to change letting agents and allow Hunters to take over, there are a few simple steps you need to follow to ensure the switch is smooth and efficient.
1. Check your notice period – You'll find your notice period in your Terms of Business document.
2. Give your notice – This needs to be done in writing – an email will suffice, and make sure you ask for a confirmation of receipt and understanding.
3. Ask for your tenants’ details – Make sure the letting agents give you the correct details for your tenants. And don’t forget to check you have the right bank details too.
4. Find a new agent – Appoint a new letting agent as soon as possible. Ideally, you'll want to choose one who knows the local area and who has experience in helping landlords move letting agents.
If you're unsure what your next steps are, call us on 0800 008 6906 and one of our helpful property experts will talk you through the process.
Why choose Hunters to help with your rental properties?
We have letting experts throughout the country, helping you to protect your property and your investment. You can rest assured when you choose us to be your letting agents that your bricks and mortar are in good hands.
Our dedicated landlord portal helps you keep track of your let so you know exactly what's going on and when. We also have a variety of landlord services to suit your needs. Whether you just want us to find the right tenants for your property or you want us to fully manage your portfolio, we can find the right solution for you.
Ready to see how we can help? Call us on 0800 008 6906 or find your local branch.