Five things every first time Landlord should know
So, whether planned or accidental, you find yourself about to become a Landlord. What you imagine will, by and large, be predicated by your experiences garnered as a Tenant. Maybe you recently rented or still are a Tenant- in which case the memories are quite fresh but, more than likely, you have been out of the 'renting game' for some time. Either way, the likelihood is you have a lot to learn.
Here are our top 5 tips for newbie Landlords:
1. Finance- Mortgages & Insurance
Make sure that you have these in place for a let. If you have a mortgage on the property, and it's not specifically a 'buy to let' product, then you will need to liaisie with your lender and/or broker to make sure you are permitted to let out your property. You should also think about insurance- the vital ones being:
- Buildings & Contents Insurance
- Public liability insurance
- Rent & Legal expenses warranty/insurance
2. Alone, online, hybrid or full-service agency
You have an almost unlimited array of options however you wish to go about letting out your property- from doing everything yourself, to low-cost cut-back online offerings, to hybrids to the full service of a quality professional agent. There is no right or wrong as everyone's circumstances are different. Key things for you to consider here are:
- How much spare time do you have for the property?
- What rent do you expect?
- What services can you afford?
- Do you understand all the legislation of being a landlord?
- What would you do if the boiler broke down whilst on holiday?
- What would happen if the Tenat couldn't pay the rent?
3. Legislative & Regulatory compliance
Renting has changed and, if you haven't been a Tenant of late, you'd be forgiven for missing this. Landlords are now required to comply with over 100 peices of legilsation (with some advising this is closer to 150)- many of which carry hefty fines or even jail time for non-complaince. The information is out there, however, if you intend to 'go it alone' or use a cut-back service it is your responsibility to make sure you understand all the laws and that you are fully compliant. Key pieces of legislation to look at (but by no means an exhaustive list) are:
- gas & electrical safety
- Right to Rent checks
- AML (Anti Money Laundering) checks
- Legioannaires checks
- Smoke & CO alarms
- Tenancy Deposot reg's
- HMO (Houses in Multiple Occupnacy) license
- Mandatory property licensing
4. Understand your target tenant
It is always good to understand the target market your property is aimed at. Customsing the way the property is fitted out, decorated and (if applicable) furnished can have a huge impact on the level of rent you acheive, the void (empty) periods you encounter and the calibre of tenants you attract (and their attitiude towards the property). Like most things in life, you are better going for mid-range solutions of better quality than the cheapest solutions you can find. Don't let your personal taste rule these decisions- you're a Landlord now it head over heart time.
We recommend regularly reviewing your tax status with a suitable accounting professional. You are best including your accountant or FA in all of your property plans as they will be best placed to ensure you can minimise your tax liability. With a recent array of tax changes for Landlords it has never been more important for you to understand and plan your finances accordingly. A landlord looking to keep a property for life and then pass on will have very dfferent planning from a Landlord looking to build a sizeable portfolio over 10-25 years which will be different from a Landlord looking to sell up after 5-10 years. Figure out what you want to acheieve and then start planning the best way to go about acheiving that.
The value of the modern letting agent....
We feel strongly that Landlords get better value than ever before from full-service, quality letting agents. You can read more about our thoughts on this topc on our last blog here. Of course our friendly and helpful team welcome a call or email to dicuss your needs any time! Call our offices 1000-1830 M-F or email us.