Top Tips to Becoming a Successful Landlord
So, you want to be a landlord? Some would say that’s a brave move but there are many people that believe investing in property in some form is still a worthwhile way of building your asset portfolio. But being a landlord is not always an easy option and can be fraught with ups and downs. We’ve put together our Top Tips guide to help you on your way to becoming a successful landlord.
Whether you’re renting out a property that you already own, or you are planning on purchasing a buy-to-let property, there are several important tasks that you need to complete before a tenant can move in.
Do the maths!
First and foremost, make sure that renting out your property is going to be financially viable. Don’t look at the potential rental income and think great, I’m going to earn this amount of money; you’re not. Any rental income you receive is initially taxed and it will depend on your tax bracket. Sadly, deductible expenses are not as extensive as they once were so it’s worth taking the necessary advice. You also need to be wary of additional stamp duty if you are purchasing a buy-to-Let property.
If the property has a mortgage on it, renting it out without getting consent from your lender may well put you in breach of your mortgage terms and conditions. Talk to your mortgage provider and get a ‘consent for lease’ before renting out your property.
Arrange landlord’s insurance
As well as advising your existing buildings and contents insurance providers that you are renting out you property (this is a must as it may change your policy details), arrange for landlord’s insurance which will protect you, your tenants and your investment. Some policies may also cover rental payments if your tenant hasn’t paid their rent.
The right certificates
Before you can rent out your property, there are certain legally required certificates that need to be obtained which protect your property and the tenants. Firstly, arrange for an Energy Performance Certificate (EPC) to be produced on your property’s energy performance; anything below Band E cannot be let out. You can either source an independent provider, or your chosen letting agent will be able to help you arrange this. You will also need to arrange for the property’s electrical items, gas boiler and electric heaters to be tested and certified; for example, a gas safety certificate, Portable Appliance Test (PAT) testing and an Electrical Certificate Installation Report (ECIR). Again, your agent can help you with these.
Make an inventory
Whether you’ve decided to let the property as furnished, part furnished or unfurnished, there will still be items in the property that need to noted down on an inventory, i.e. white goods in the kitchen/utility room, carpets, any blinds or curtains, bathroom cabinets and mirrors. An inventory will ensure that should there be any disagreements over damage at the end of the tenancy, it can be resolved quickly and easily. Also detail any defects at the property or any blemishes, i.e. on paintwork. Take a photo of each room before the tenant moves in, as well as meter readings so that you have a record. Your letting agent will be arrange this to be done for you if needed.
Instruct a lettings agent
Not every landlord chooses to go through a lettings agent to rent out their property. However, with all the new legal legislation it is recommended that you use an agent who is able to advise you on the rental value, assist in making sure that you are compliant on the certifications and regulations, as well as preparing the correct tenancy agreements, vetting prospective tenants, holding the deposit correctly, never mind the ongoing property management once the property is let. An agent isn’t just about the viewing, it’s the expertise and advice they can give you once terms are agreed.
Being a landlord isn’t a 9 to 5 job and it can be stressful, but with the right team in place and plenty of support from your lettings agent and suppliers, it can be very worthwhile. At Elizabeth Hunt & Associates, we work hard to ensure all of our landlords and tenants are kept informed every step of the way, and are happy.