A Beginners Guide to Becoming a Landlord
With many first time buyers finding it difficult obtain a mortgage; and a shortage of social housing nationwide more people are looking to private rented accommodation as a long term housing solution than ever before.
With the shortage in affordable housing, an ever growing population and a fragile economy, landlords are certainly in a good position to offer rented accommodation and opens up new possibilities for property-owners nationwide.
Before becoming a landlord there are a few essential steps you need to take:
Protect your property from fire
Your property is required to have fire alarms fitted and a means of escape in the event of a fire.
Ensure you check the gas and electric supply
As the landlord responsibility lies with you to provide a copy of the property’s gas safety certificate which will be renewed annually by a registered Gas Safe (previously CORGI) Engineer. It is also recommended that an annual electrical inspection is carried out so electrical appliances are checked to ensure maximum safety.
Get an energy performance certificate (EPC)
You will need to provide your tenants with an Energy Performance Certificate, or EPC, which will usually cost you around £100. This will show the property’s energy efficiency- without this you could be fined.
If you plan to let your property with shared facilities, you may need a license
If you are considering renting your property to more than one household who will share facilities e.g bathroom or kitchen, it may be classed as a house in multiple occupation (HMO).
If so, you may need to register and get a license with your local council. Failure to obtain this licence could result in a fine of up to £20,000.
Any income for tax and benefit purposes
Remember to declare the income you receive from renting you may be required to pay tax on this.
Protect the deposit
It is important to get a deposit from any potential tenant to cover against any damage or unpaid rent. The deposit must be placed in Government-approved tenancy deposit scheme. Failure to comply could result in a fine.
Ensure that you have correct Landlords Insurance
As a landlord it is your responsibility to insure your let properties.
These let properties carry a unique risk significantly different to an owner occupied property. Your exact insurance requirements may vary depending on the types and number of properties you own.
Constructaquote.com can provide you will have access to an experienced panel Commercial Insurance Advisors who can construct a competitive Landlords insurance policy tailored to your landlord needs.
Once the above steps are completed, the next step is to find a tenant:
Get references before you take on any tenants
When looking for potential tenants it is important to approach with caution Obtain references from previous landlords or employers. Arrange to meet the potential tenant before offering any tenancy and, if you can, obtain a credit check. This should help ensure you tenant is responsible and trustworthy and more likely to be good tenants.
Tenancy Agreement
Tenancy agreement’s can be purchased online or through a solicitor alternatively if an agency is managing your tenancy they may provide the agreement.
As the landlord it will be your responsibility to understand the contents and recognise the requirements outlined in the agreement, it must include:
• Names of the tenant/s
• Tenants/landlords responsibilities for repairs/maintenance
• Deposits and fees payable
• Cost of rent & breakdown
• The length of the contract
Once you have found a suitable tenant ensure to carry out:
Pre-tenancy & post-tenancy Property Inspections
This will make the tenant and landlord mutually aware of condition of property when the tenancy is agreed.
If the property is part furnished Landlord contents insurance –will cover these items in the event of accidental damage.
Before the end of the tenancy re-inspect- this will highlight areas of the house that need work. Accidental damage cover can be purchased as part of your Landlords Insurance to provide cover for any damage caused.
Should any damage occur during the tenancy such as burst pipes, flood, fire or theft by purchasing Landlords’ buildings cover as part of your Landlords Insurance you will be insured against such events.
