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| Photo by Maria Ziegler on Unsplash |
{This is a collaborative post}
Like me, you might never have considered becoming a landlord, but what I now know is that it is far easier than I feared. I have a couple of local friends who are in the same situation as me, where we get our houses provided with our husband's jobs and whilst they both went for the renting option, we decided to sell our old house. Well, now they are quids in and we are £130K down! Yep, you read that right, in the last 7 years, the house we sold has risen by £130,000 without any works having been done on it, as we did all those before we moved out.
I think because our move was quite a quick one, it just felt far too scary to rent our house out and to live over 100 miles away from it, but I need not have feared as I now know that is what a good Lettings Agent does for you. If you're in the position of thinking about renting your property out because you're heading abroad for a bit, been given a house with your job or for another reason entirely, read on to see what you need to consider when you rent out your property and become a landlord -
1. Do your Preparation and Research
Have a look at sites like Zoopla and Rightmove and see what kind of rents people are achieving in your area. Think about what kind of people you think your home might suit best - a professional couple, a small family, roommates? Each different demographic comes with their own pros and cons, so have a think about this and who you think it might be best to let your property to. Do you want to let your house furnished or not?
Also, work out your budget, how much does it cost to pay the outgoings for your property each month, add on the cost of the letting agent and any profit you with to make and you have an idea of what you need to be charging. Hopefully, it will fall in line with what you have discovered others are charging for similar properties.
2. Engage a Reliable Letting Agent
Chat to friends or use a platform like Facebook to ask which letting agents local people would recommend. Even in the smallest town, there will be lots of people offering this service and they'll have a variety of options, like finding your tenants, collecting the rent or a full management service for you to choose from. Of course, the fee will also depend on the level of service you want and Which say you should expect to pay from 10% to 20% depending on your needs.
Make sure you chat to at least three different agents to see who you take to and what fees they are offering you. It is a very competitive market so you most definitely can negotiate with them on fee, but make sure they get a fair deal, as well as you otherwise they won't be motivated to look after your house as well as you want them to.
Also, check out that your preferred Letting Agent is registered with one of the three main bodies - ARLA (Association of Residential Letting Agents), UKALA (UK Association of Accredited Letting Agents) and NALS (National Approved Lettings Scheme). This will also mean they have Client Money Protection (CMP) in place, so in the event, your agent goes bust, the scheme would cover your losses.
3. Get good Landlord Insurance
Anything can happen when you have strangers living in your house, so it is really important to get good landlord insurance. Don't just assume that the building and contents insurance that you have in place will be OK, it won't. The minimum you need to do is contact your insurers and talk through the changes, but purpose-made landlord insurance is a really good bet as it will cover any financial losses connected with your rental property.
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| Photo by David T on Unsplash |
4. Find out the Legalities that Apply
If you have a mortgage on the property, you need to speak to your lender and see if the terms of your loan allow you to move from owner/occupier to landlord. Once you know this is OK you then need to make yourself aware of the responsibilities and legalities that apply when you are a Landlord. Of course, some of these will be taken care of by your letting agent, but ignorance is never a defence in the eyes of the law, so best to be at least a little clued up.
A great place to start is on the Gov.uk website where there is loads of guidance for landlords, including how to put together a rental information pack, the safety obligations upon you, doing an energy performance check and getting your Energy Performance Certificate, checking that your new tenants have the rights to rent in the UK and your financial responsibilities in terms of your income.
5. Get your Property Ready
It's time to give your property an MOT and check the state of it. Are there any works that need to be done before it is fit for the tenant to move in? Are the electrics up to scratch, does the boiler meet the standard, have you got smoke alarms, a carbon monoxide detector and are there any rooms in need of redecoration as they are looking a bit tired? You also need to consider the white goods that you'll be letting the property with and ensuring they are up to the job.
It's probably worth getting in professional cleaners to give the house a thorough once-over and they'll do all those jobs that get forgotten, like cleaning inside the cooker, behind the radiators and under the sink.
Make sure you have removed your valuables and personal items so that your new tenant is moving into a blank canvas and can put their own stamp on it.
I hope you've found this helpful and these five points give you a good starting place for letting your home and becoming a landlord.
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