Becoming a landlord is a massively rewarding experience, and the moment you hand the keys over to your new tenants is a truly amazing experience. You might think I’m overexaggerating a little, but there really is nothing better than seeing the big cheesy grin on a tenant’s face when they realise they’re about to start a whole new chapter of their life.
Being a landlord has a lot of upsides, but it’s important not to rush into things. At the end of the day, letting properties is still a business just like any other. Therefore, you need to think carefully about the decisions you make, as they affect not only you but your tenants as well.
To set you off on the right foot, we put together this guide for those letting a property for the first time. Follow our simple steps, and you’ll be on the way to landlord success!
Find The Right Tenant
The rental market has boomed over the last few years and there are still no signs of it slowing down. This means you’ll have plenty of people interested in your property, but not all of them will be ideal for you.
Before renting out your property, you need to thoroughly assess your prospective tenant’s background. This includes conducting credit, income and identity checks, as well as checking they have the right to rent property.
After this, you’ll want to make sure the prospect is an easy person to get along with. Naturally, the best way to succeed as a landlord is for you and your tenant to have mutual respect for one another. No one wants to have arguments over the smallest issues (or the big ones, for that matter), so a good rapport is vital. To get a better idea of the person looking to rent from you, ask for references from their old landlord(s).
Finally, it’s worth thinking about whether you’d be happy letting to a smoker or someone with pets. You’d widen your appeal by allowing cigarettes and doggies in your property, but the smell of tobacco and wet dog isn’t something every landlord is willing to budge on.
Every property is different and can attract people from all walks of life. If you’re not sure who to market yours at, ask a lettings agent for advice.
Keep Your Finances In Mind
Sorry to have to tell you this, but your outgoings will play a bigger part in your landlord career than you might have thought. That’s not to say you’ll be forking out a small fortune, though, and you could reduce your overall spend even further with some careful planning.
First thing’s first, you’ll need to establish how much rent you’re being paid by your tenant. From there, it’s easier to work out your net profit. If you’re not sure what rate you should set, take a look at what other landlords in the area are charging for similar properties. You can also ask a lettings agent for their opinion.
Factoring in maintenance costs, landlord insurance, any work or appliances that are tax-deductible and the possibility of void periods, you can get a better idea of how profitable this venture will be for you.
There are several ways toreduce the costs of being a landlord without sacrificing quality service to your tenants. All you have to do is think carefully and plan ahead.
Alternatively, you can consolidate as many as these costs as possible by hiring an expert lettings agent to make things more manageable.
Know The Law
For anyone looking to rent out their property, they have to be fully up to scratch with the law. The only real problem is that the law tends to be updated a lot, meaning you have to constantly keep on top of it.
To begin with, you need to make sure your property is suitable to live in, and you’ll need the following items to prove this:
- A valid Gas Safety Certificate;
- A valid Energy Performance Certificate (EPC);
- Consent to let the property (from the legal owner, your insurance company or your mortgage lender);
- Proof the property complies with building regulations (for insurance purposes).
Your property will also have to be fit for human habitation as outlined in theFitness for Human Habitation Act 2018.
And just for good measure, you’ll need to brush up on the Tenant Fees Act that was introduced in June this year that banned landlords from charging fees for admin duties or end of tenancy cleaning services.
It can be difficult to stay ahead of the legal minefield, so consider bringing in the expertise of a lettings agent for the best advice.
While many laws are for the protection of tenants, there are laws out there for landlords, too. As such, you have the following rights:
- To be paid rent on time and in full (the amount and date needs to be included in the tenancy agreement so both parties are fully aware of what’s expected);
- To prohibit any permanent alterations to your property (your tenants can still put in a request as long as they do it in writing);
- To be informed of any damages to the property;
- To enter the property to complete inspections and repairs (you must give tenants 24 hours notice before doing so).
What’s the Easiest Way to Let a Property for the First Time?
There’s no doubt about it, being a landlord can be a little tough at times, especially if you’re letting a property for the first time and you’re still getting your head around the whole process.
However, renting properties can be a great way of bringing in passive income if you’re looking to make some extra money without any hassle. If this sounds more appealing than the idea of vetting potential renters, keeping track of the books and becoming a legal eagle, then a lettings agent is probably what you’re looking for.
At Philip Ellis, we pride ourselves on our expertise as lettings agents in Prestwich and Whitefield, helping our clients and their tenants with everything they need.
If you’re about to rent out your property, we’ll provide you with a free property valuation so you can ask for a fair rental price.