Being a landlord can be far more complex than just running your own home, with so many other things to consider. We’ve pulled together this list of 10 tips which we hope will help you on your way to becoming a successful landlord.
Once you’ve bought your rental property make sure it’s insured. Regular home insurance policies often do not cover rental properties, so make sure you research your insurance requirements properly. See our useful overview of landlord insurance for more information.
If the house you are renting out is three or more stories high and/or has five or more people from two or more households, then you’re required to get a HMO license from your local council.
When you’ve chosen your tenants, you need to ensure you have some form of tenant agreement in place. Assured Short Hold tenancy agreements are the most common and set out the rules for both you and your tenant. It will set out the terms of the tenancy and include important details about each party’s responsibilities in a clear, concise and transparent way.
When you set up a new tenancy agreement, you’re now required to carry out ‘right to rent’ checks to ensure that your tenants can legally live in the UK. You can do this by checking and making copies of any passports or other form of immigration documents. If you’re using a letting agent to rent out your property then they will perform these checks for you.
Once you have tenants in place you’ll start collecting rent and deposits. You are now required to protect the tenant’s deposits in a government approved deposit scheme. This is known as Tenancy Deposit Protection (TDP) Scheme. If you don’t use this, you could end up paying a fine of three times the amount of the tenant's deposit.
The schemes work by either paying an insurance premium, or holding the tenant's deposits and in turn offering a dispute resolution service should there be any issues at the end of the tenancy agreement.
It’s important to ensure that the tenant is made aware of which scheme their money is held in by letter, 14 days after the deposit has been paid. You must use a TDP scheme even if the deposit is paid by someone else, e.g. a rent deposit scheme or their parents.
As a landlord, the rent you collect will be classed as income, which means you may be liable to pay tax depending on how much profit you make and your own personal circumstances.
Your profit is calculated by adding together all rental income and deducting any expenses or allowances that you can claim. Examples of what counts as an expenses and allowances include:
All landlords need to be able to provide an Energy Performance Certificate to new tenants except for a couple of circumstances. Here’s a guide on what type of property will need them:
It’s important to ensure that all furniture and furnishings follow the guidelines set under the Furniture and Furnishings (Fire Safety) Regulations 1988 (Amended 1989, 1993 and 2010).
To enhance the security of your property for your tenants, you could think about installing a number of security measures. They could include:
It’s inevitable that your property will receive some wear and tear, such as warn carpets or walls in need of painting. It’s your duty to maintain the property at the standard you first let it, so make sure you keep on top of small problems now as this could help you save money in the long run.