The prospect of renting out to tenants for a healthy extra income can be a very attractive and enticing one. Becoming a landlord is a great way to boost your finances or provide your main income stream but it is important to be aware of just how many rules and regulations there are in place on both sides of the equation.
There are plenty of rules that tenants must follow in order to keep themselves in a property, but keep in mind that there are just as many, if not more, rules for landlords to abide by to run a legal, above board business.
It’s not as simple as naming a price and taking the money from someone each month. Keeping to the UK laws and regulations is an essential factor in a successful property rental business.
Here is a handy checklist for landlords to consider before renting a property out to tenants.
- Get Consent to Let
To rent your property, you need consent from your mortgage provider (if you have one, of course). Depending on the personal circumstances of your situation, you may also need to secure the consent from the head lessee of the property freehold, along with any co-owner that there might be. Failure to get consent could result in you being in breach of the contract that you signed to get the mortgage in the first place.
Another vital step is to make sure that have the relevant insurance. Anyone renting out a property needs to have the correct landlord insurance; it provides covers for the various financial risks that go hand in hand with renting out a property to relative strangers. Each property is different, which means that each insurance policy will stand to be different. You need to abide by the rules of your own situation to avoid getting in to trouble.
- Get An EPC
It is a legal obligation for a landlord to supply something called a domestic energy performance certificate to every property that they are renting out. This lets your tenants know how costly the building is going to be to light and heat, and can be procured from a certified energy survey supplier. This is really important because landlords that do not abide by the EPC rules are subject to a penalty fine of £200 for residential buildings. The fines are much higher for landlords of commercial premises.
- Research Letting Agents
You can choose to manage the rental of the property yourself, or you can select a letting agent to take on the bulk of the responsibilities. The main advantage of doing it yourself is that you can oversee absolutely everything, but the disadvantage is if you just simply don’t have the time, as managing tenants and propertties can be very time-consuming. it is worth doing the background research to select the best letting agent for you. It is important to put your trust in someone reputable and well respected in the business, ask around friends and colleagues and then look at online reviews. An easy way to do this is to check that they are a member of a redress scheme like ARLA Agent or Ombudsman Services.
- Be Compliant
There are a number of small tasks that you need to make sure you are on top of before renting your property out to anyone. The most important of these include things like:
Installing smoke and carbon monoxide alarms in keeping with the 2015 regulations
- Ensuring gas safety.
- Ensuring electrical safety.
- Making sure that all relevant furniture and furnishings are fire-safe.
- Checking over the general safety of the property, fixing trip hazards and similar.
- Achieving a high standard of cleanliness in every single area of the property.
- Finding Tenants
The last step before seeing that income start to come in is finding tenants. The days of finding ads in the newspapers are almost entirely behind us, with the internet unsurprisingly taking the mantle as best way to both find and attract good potential rental tenants.
One you have had interest in your property from a number of potential tenants, you need to do a few different things:
Check their references from previous landlords to see if they appear to be satisfactory tenant material.
- Conduct a right to rent check to make sure they have the appropriate legal standing within the country.
- Have a frank discussion about personal terms with between yourself and the interested party to ensure that you are all on the same page with no hidden surprised to come later down the line.
This is not an exhaustive checklist for landlords but it contains the basic and most important elements that you should not ignore.
Guest blog by Ella Hendrix for Bristol Property Centre.