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20 Things Every New Landlord Should Know
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Introduction Perhaps you have inherited a
property, are looking to rent out your home while you move with work or leisure or to new pastures, or
perhaps you have invested in a
property. Whatever your reasons, becoming a Landlord can seem daunting.
To help you, we have compiled a handy list of the most important things you need to know when renting out your property.
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1. Register with HMRC
Before accepting any rental income, contact HMRC if your income from your property rental is likely to be between £1,000 and £2,500 a year. You must report it on a Self-Assessment tax return if it's £2,500 to £9,999 after allowable expenses or £10,000 or more before allowable expenses.
2. Screen Tenants Thoroughly
Screening tenants will involve credit checks, past landlord references, and checking employment documents.
Carrying out a thorough screening is one of
the most important steps in the rental process to ensure you get the right tenant.
We will do this for you as part of our service.
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3. Hire Professional Cleaners Handing over the keys to an immaculate property sets the
correct tone for your ongoing relationship with your tenant. It also gives the distinct impression that you expect to find the property as it was left when the tenant leaves.
4. Rental Properties Require Ongoing Maintenance Regularly carrying out pre-emptive maintenance work on your property can help prevent any large bills from cropping up unexpectedly. It also gives you and your tenants peace of mind.
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5. Ensure You Have a Pet Clause in the Contract If you allow pets, ensure you have a clause in the contract which states tenants must disclose any animals which will live in the property.
If you do not permit pets or want to make a judgement on a case by
case basis depending on the nature of the pet, make this explicitly clear in the contract.
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6. Consider Hiring a Property Manager Even if you have a small property portfolio, managing rentals can quickly turn into a full-time job.
If you would prefer not to have the hassle or don’t like the
idea of being on call constantly, then hiring a professional agency like us to manage your property will help you.
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7. Budget for Void Periods Even the best kept properties could fall empty for short periods. Be sure to budget for potential rent-free periods when calculating your finances.
8. Be Extremely Organised
Being a landlord requires dealing with a huge amount of paperwork and documentation. Create a digital paper trail for your
documents but ensure everything is GDPR compliant.
You may want to consider hiring an
accountant as your portfolio grows.
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9. Protect the Deposit - Legally All tenancy deposits must be placed into a government-
backed scheme within 30 days of the tenancy commencing. This money can then be easily released at the end of the tenancy, providing everything is in order.
10. Ensure Your Fees are Legal The law around fees has seen a huge overhaul in the last few years. Deposits are now capped at 5 weeks rent, and ‘lettings fees’ are banned so it's important you ensure you are up to speed on your legal obligations.
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11. Always Have a Written Rental Agreement Although it may sound obvious, a written rental agreement is essential.
Verbal agreements cannot be relied upon, and there are
many intricacies involved with rental properties, so it is only right to contain them within one concise document.
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12. HMO’s Require Different Licences
If you’re planning to rent out rooms in your property separately, which is particularly common in bigger cities and among students, you will require an extra licence for your house of multiple occupation (HMO). There are a variety of rules and regulations which are attached to HMO’s, so be sure you are renting it legally and ethically before you advertise.
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13. Make Sure You Have Suitable Landlord Insurance Rental properties require completely different insurance to the home you live in. Ensure you have the correct cover in place in case of an emergency.
14. You Must Give Tenants Notice
To carry out inspections on the property,
even though you are the owner, you must
give your tenants at least 24 hours’ notice, as well as arranging the visit at a ‘reasonable’ time.
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15. Regular Inspections are Necessary Regularly inspecting your rental property is great for keeping tenants happy as well as preventing unnecessary bills. It enables any minor issues to be dealt with before they become a major, and undoubtedly expensive, problem.
16. Work to Keep Good Tenants
Keeping good tenants in your property can
be a challenge in an extremely competitive rental market.
Consider throwing in incentives for longer
tenancies or annual renewals. The benefits
of holding onto a reliable tenant cannot be overstated.
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17. You are Responsible for Safety 18. Change the Locks Between Every Tenant
From secure windows to gas and electrical safety certificates, you must provide your tenants with a safe property to live in.
Changing the locks between tenancies may feel arbitrary when the tenants have handed you their keys. However, it is a small price to pay for the safety of the property, your next tenants and your peace of mind.
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19. Always Conduct an Inventory Check Before every new tenancy, conduct a thorough inventory check, signed by both yourself and the tenant. This helps prevent any disputes arising at the end of the tenancy.
20. Check Your Tenants ‘Right to Rent’
This is a government scheme that requires all landlords to check their tenants have a legal right to live in the UK.
This is generally a straightforward passport
check, but there can be huge repercussions if you fail to do so.
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© David James