Top 10 Tips for Landlords
1. Work out whether letting your property really is a financially viable proposition. If you are renting just one property, and have a full-time job, it can be a lot of work to deal with tenants on the top of that. When you make your financial plan, take into account the cost of renting the property out, including any changes that will have to be made to the property. Also bear in mind that there will be ‘void periods’, where no-one is in your property, in your calculations.
2. Work out the tax implications of renting out your property. The rent you receive will be treated as income and taxed in line with your basic or higher-rate tax bands. However, there are certain things that can be offset against the tax. These include mortgage interest payments, letting agency costs and maintenance expenses against the taxable rental income. If you are living abroad there are further implications so you will need to check on these too.
3. Spend enough to make your property a tempting proposition - particularly if it is a family home. Parents with children will be more concerned about shabbiness and safety issues than young sharers. Be flexible with your requirements and don’t put in unnecessary restrictions on children and pets unless you have a real reason to do so.
4. Make sure you inform your mortgage company, In some cases, your mortgage company will not force you to change your mortgage, but they all have different criteria. You may find that your lender forces you to change to a buy-to-let mortgage with a higher interest rate. Do not be tempted to leave your lender in the dark about your tenants. If you don’t inform them, you will be in breach of your mortgage conditions, and your insurance would be invalid should anything happen.
5. Talk to your insurer. If you are renting your property out, you are still responsible for buildings insurance on the property, as well as your own contents, fixtures and fittings. The insurer will need to know that the property is being rented out. A specific landlord’s insurance policy will cover you for things like loss of rent and landlord liability.
6. Use an Agent! They are there to guide you not just to find your tenants. There are over 400 pieces of regulations in letting and agents will do the hard work and make sure you know your responsibilities on safety, deposits, contracts etc. Use one who is a member of a regulatory body such as ARLA or Safe Agent. Those agents displaying a Safe Agent logo will not only be part of a regulatory body but will also have Client Protection Insurance which means your money is safe.
7. Make sure your home is safe to be rented out. Plenty of things that you may be prepared to live with will not be suitable if someone else is coming to live in your property and may even be against the legislation.
You will need to obtain a gas safety certificate from an engineer registered with gas safety body. You will also need to get the wiring checked by a qualified electrician and smoke detectors installed.
8. Presentation – the market is competitive so make yours stand out, with so many BTL investors using furnishing companies make sure yours looks just as nice. But remove personal or expensive items of furniture as not all tenants will care about them as much as you would!
9. Good information folders - You should provide details of emergency phone numbers in a tenant’s handbook (if you manage the property yourself) which could also give details on how to use the household appliances, how the boiler and heating is operated and details regarding the local authority, such as the amount of council tax payable, car parking, and when refuse and recycling is collected.
10. Start Right the beginning of your tenancy is very important so make sure you have a good inventory, prepared by a third party and not you the landlord is best in case there are any disputes later on and also get a good Tenancy Agreement for the tenants to sign. Good will gestures and verbal agreements should be avoided at all costs, think of this as a business.