Top 10 tips for landlords
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.
1. Get the right landlord insurance
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.
2. Do you need a House of Multiple Occupants (HMO) license?
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.
3. Finalise your tenancy agreement
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.
4. Carry out ‘right to rent’ checks
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.
5. Protect your tenants’ deposits
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.
6. Know where you stand with tax
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:
- Letting agent fees.
- Landlord insurance
- Maintenance and repair costs.
- Solicitor’s fees.
- Mortgage interest.
- Cost of replacing furnishings.
7. Get the right Energy Performance Certificate (EPC)
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:
- Individual house/dwelling (i.e. a self contained property with its own kitchen/bathroom facilities) - one EPC for the dwelling.
- Self contained flats (i.e. each behind its own front door with its own kitchen/bathroom facilities) - one EPC per flat.
- Bedsits or room lets where there is a shared kitchen, toilet and/or bathroom (e.g. a property where each room has its own tenancy agreement) - No EPC is required.
- Shared flats/houses (e.g. a letting of a whole flat or house to students/young professionals etc. on a single tenancy agreement) - one EPC for the whole house.
- Mixed self contained and non self contained accommodation - one EPC for each self contained flat/unit but no EPC for the remainder of the property.
- A room in a hall of residence or hostel - no EPC is required.
8. Understand Fire Safety Regulations
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).
9. Make your property secure
To enhance the security of your property for your tenants, you could think about installing a number of security measures. They could include:
- Five lever mortice lock for external timber doors or a three multi-point locking system for PVC-u external doors.
- Window locks.
- Door chains.
- Burglar alarms, defender alarms and security, night lights and spy-holes.
10. Maintain the property
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.
Important legal information
Lloyds Bank plc. Registered office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales No. 2065. Lloyds Bank plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 119278.
Eligible deposits with us are protected by the Financial Services Compensation Scheme (FSCS). We are covered by the Financial Ombudsman Service (FOS).
Telephone calls may be monitored or recorded in case we need to check we have carried out your instructions correctly and to help us improve our quality of service.
Insurance covers are subject to the individual terms, conditions and exclusions of the insurer providing them. Always review the policy documentation supplied during the quote process to ensure you have the cover you need.