Becoming a landlord for the first time is an exciting adventure. Letting a property is an excellent way to earn extra income from rent payments while seeing the value of your investment property increase over time. And it seems that demand for rented accommodation is increasing. According to Government statistics, 4.4 million households live in rented properties, a rise of 45 per cent since 2009.
However, new landlords are often unaware of their rights and responsibilities. Therefore, for your letting business to be profitable and successful, it’s crucial to know what being a landlord entails. This includes ensuring the property is safe to live in and holding the deposit in an approved tenancy deposit scheme (TDP).
To help new landlords, we’ve compiled a list of the top tips for becoming a new landlord.
Top Tips for First-Time Landlords
If you are thinking about becoming a landlord, there are some things you should know before getting started. These include advice on how to be a responsible landlord and your rights. Here are our top tips for first-time landlords.
1. Treat your rental property like a business
For many new landlords, renting a property isn’t their primary source of income. It may be a new venture to earn extra money while developing a rental portfolio. Or you may have become an accidental landlord. However, it’s still vital to remain professional with your tenants. Additionally, you should keep your accounts in order, pay the relevant taxes, and ensure the building meets safety requirements.
2. Carry out checks and get references on prospective tenants
Getting tenant references is one of the most important jobs of being a good landlord. Screening potential tenants help to ensure they can afford rent, are in steady employment, and have a trustworthy reputation.
Remember, rental income pays your mortgage on your buy-to-let property, and you don’t want a rogue tenant living there. According to some figures, it costs an average of £3,000 to evict a tenant and £35,558 in lost income.
Your responsibility is also to carry out a ‘right to rent’ check. This is a legal requirement where you must check the immigration status of tenants and anyone else living on the property.
Many new landlords use a trusted letting agency to carry out tenant checks and references from previous landlords and employers. This helps to protect your rental income and ensure you get the most suitable tenant for your rental.
3. Always have a tenancy agreement
The tenancy agreement is one of the most important documents you have. It’s a legal contract between you and the tenant. It sets out how long someone wants to rent a property, what conditions apply during the rental period, and what happens if there are disputes.
4. Place tenants’ deposits in a government-approved tenancy deposit protection (TDP) scheme
Changes to legislation in 2004 now require landlords to safeguard tenancy deposits in an approved deposit protection scheme. This requires you to pay the deposit into a TDP within 14 days of receiving the money. Failure to do so could result in a fine of up to three times the original deposit.
5. Ensure the rental meets safety standards
Before letting a property, ensure electrical and gas installations meet safety codes. It is also crucial to have smoke and carbon monoxide detectors installed and working properly. Here are some things to keep in mind:
• Annual gas safety check: You must provide tenants with a gas safety check when they move in or withing 28 days. Additionally, you should have gas appliances inspected annually.
• Electrical inspection: A qualified electrician should inspect the electrical items every five years and before the start of a new tenancy.
• Fire safety: Every storey of the property must have a smoke alarm. Additionally, carbon monoxide alarms should be in rooms with a solid fuel-burning appliance.
6. Take out landlord insurance
It’s vital to remember that you need landlord insurance if you let a property. General building and contents insurance does not cover this type of loss caused by tenants. Therefore, insurance for rental properties minimises your exposure to financial loss.
7. Keep the rental property well-maintained
Always be in the habit of making repairs promptly. Not only will you protect your reputation as a responsible landlord and keep tenants happy, but you will ensure your property doesn’t fall below safety standards. This way, you keep the property in a habitable condition with essential services like heating, hot water and basic utilities.
8. Know your rights as a landlord
Your tenants also have responsibilities. Therefore, you have the right to receive rent on time and evict a tenant if they fall into arrears. The tenant should keep the property in good condition and not deliberately break or destroy anything. And at the end of the lease, they should leave the property in good condition, allowing for reasonable wear and tear.
If the tenant fails to adhere to the tenancy agreement, you have the right to withhold part or all the rent.
9. Use a trusted property management agency
If you are a new private landlord, you should consider using a letting agent. A property management company is contractually obliged to put your best interests first. Therefore, good letting agents make your life easier by taking care of things like rent collection, property inspections, property viewings and resolving tenant disputes.
Hastings International — A Trusted Property Management Agency
Being a new landlord can be stressful. However, there are ways to reduce the stress and make the rental process more manageable.
At Hastings International, we aim to provide unrivalled property management services in London. So, if you are thinking about letting your first property, please get in touch with a member of our team today. We can assist in all aspects of property rentals.
