A simples guide

How to become a landlord

It might seem easy being a landlord – how hard can it be? You find some tenants and just sit back and let the rent roll in, right? Well, not strictly true, there’s a whole load of responsibilities that you’ll have to face up to, but there’s no doubt it can be a lucrative and secure long term way of making money. So if you’re thinking about starting up your own property empire, here are the basics to get you started.

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1. I want to become a landlord

If this sounds like you and you’ve taken the decision to rent out a property to tenants, you’ll need to make sure that you do your research. This means making sure the area and property you want to rent out will appeal to the audience you want to target. If you’re pitching a 3 bed house to a family, there’s no point it being somewhere miles away from any schools, parks, shops or play areas.

2. Contingency plan

Having a back-up plan doesn’t mean you’re setting yourself up for failure, it just means you’ve got arrangements in place for any void periods (when your property’s empty). This could be as simple as knowing you’ve got a couple of months’ mortgage payment in a savings account somewhere just in case you find yourself in-between tenants (or if a tenant fails to pay).

3. Check your tenants right to rent

You’ll need to make sure that whoever you’re renting to has the right to rent your property and lives in the UK. If you don’t check and it turns out your tenant isn’t supposed to be renting, then you could be fined up to £3,000. For more advice, visit Gov.UK, check your tenant’s right to rent.

4. Make sure you have a tenancy agreement

Sounds basic – but the essentials are often overlooked. So make sure you don’t get caught out, put a tenancy agreement in place which clearly states when the tenancy starts, how long it lasts and how much rent needs to be paid and when. You might also want to include any notice periods and if you include any services such as cleaning or laundry in the arrangement.

5. Inventory

Make sure you know exactly what state your property’s in when you rent it out and also what’s included. As nit-picky as it sounds, don’t forget to include the little things – toilet seats, curtain poles and curtains, light fittings. If you’re providing furniture – make sure every item is itemised and described, if you can, take a photo so you know exactly what state everything was in at the start of a tenancy. Soft furnishings will all have to meet current safety regulations too, so always check.

6. Your legal obligations

You’re legally obliged to have any gas appliances checked by a registered gas engineer annually. If you don’t you could face fines of up to £25,000 or even end up in prison.

Similarly, you’ll need to make sure that any electrical appliances are in good working order before you start renting your property – make you get someone qualified to check – your dad having a once over doesn’t count (unless he’s a registered electrician).

Something else you’ll need to have by law, is an EPC (energy performance certificate). It takes into consideration the energy efficiency of a property and you’ll need to make this available to any potential tenants.

You’ll need to install smoke detectors and carbon monoxide alarms; you’ll also be responsible for checking that they work. If your property is an HMO (house in multiple occupation), flats or bedsits, you’ll need to have a proper risk assessment to make sure you comply with fire safety regulations.

7. Maintenance and repairs

Try and make sure you respond and resolve queries and faults as soon as is reasonably possible. It’ll show that you’re a concerned landlord and reinforce a good relationship between you and your tenants (an absolute necessity). Plus, ensuring a speedy response could mean you nip potential problems in the bud and save yourself a few bob in the long run.

8. Don’t make surprise visits

Your tenants have a right to privacy and the last thing they want is to find you’ve let yourself in and made a cup of tea. You do of course have access rights, but you need to give reasonable notice (usually 24 hours).

9. Tax

Make sure you tell the taxman about your rental as any income will need to be declared. If you don’t you’ll be fined. You can find out more at Gov.UK, renting out your property.

10. Insurance

Perhaps the most important one of all – making sure you have the correct insurance is imperative. Standard home insurance won’t provide the right cover if you rent out your property and may mean that you could find your policy is invalid. This means that if you do need to make a claim, your insurance provider may refuse to pay all or part of the claim.

If you’re a landlord, you should have landlord’s insurance, which means you’ll be covered for a raft of landlord-y type problems such as:

  • Costs for alternative accommodation for your tenants if your property is damaged by fire, storms or floods
  • Loss of rent against an insured reason
  • Malicious damage by tenants
  • Buildings and landlord’s contents insurance (tenants will be responsible for insuring their own stuff)
  • Liability – in case your tenants or a third party has an accident caused by your property

You could look for optional extras such as accidental damage insurance, or legal cover which will cough up for any legal expenses if you end up having to haul tenants through the courts.

Still want to be a landlord?

Then good for you, you’re clearly not shy of a challenge, but like all challenges the rewards and benefits are well worth the effort in the long run. And to make sure someone’s got your back, why not start comparing the market for landlord’s insurance today?

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