New Landlords! All you Need to Know
Whether you’re looking to rent to a family, setting up some students with good ‘digs’ for the start of their educational journey or easing a couple into retirement, there’s plenty to think about when taking on your first buy-to-let home as a landlord. You need to cover many different aspects of renting a property so when the first tenant moves in, there will be less stress involved and a seamless transition to start running your business.
First of all, you have to make sure your property is safe for the tenant(s) who wish to live in the house, by doing a number of health and safety checks; including checking all gas and electrical equipment is safely installed and maintained, providing an energy performance certificate for the property, fit and test smoke and carbon monoxide alarms, make sure any furnishing is fire safe and cover all exit routes should there be one (getting adequate landlord insurance should be your next step).
Next you have to go through certain legal measures to check whether your prospective tenant can rent in the UK, which is called ‘tenants right to rent’ and you could face a fine up to £3000 if you fail to do so (full details here – https://www.gov.uk/check-tenant-right-to-rent-documents). Protecting your tenants deposit in a government approved scheme is also expected, while you need to understand the laws surrounding when you can enter the property (must give minimum 24 hours notice and have valid reasons to do so).
How you set up your lease agreement with the tenant depends on how long you wish to rent for. Most landlords prefer a long-term lease with a fixed period of one year, but some like monthly rolling contracts or short-term tenancies of six months. While you may be the freeholder and have the rights to enforce obligations made by the tenants, extensions can still be made for the contract past the set period if you come to a joint agreement. Managing your property in an efficient and correct manner will be important, so most landlords (particularly those with their first property), usually employ an agency to deal with all the necessary paperwork and any issues that arise with tenants during the length of the contract.
There’s a whole host of costs you have to consider before a tenants moving in day. Remember to factor in maintenance costs, with plumbing and electrical issues a common occurrence. Next you have to think about refurbishments i.e how often to do them, how much will it cost and odd jobs around the house like whether the walls need repainting (as a landlord you have to cover all of this). As a landlord, you will be running a business so it’s your responsibility to pay income tax on any profits you make.
Now the big question – how do you market your property to the world? It’s typically done through an estate agency, but to save money on excess fees and be in control of your first tenant(s) based on preference, many landlords now opt for online marketplaces as the best way to advertise the investment. There’s so many services out there that can offer packages tailored to meet your needs and preferences as a client, but for true value and high visibility, YouRent’s affordable deals mean you can market on multiple websites for much lower fees. You have to consider your budget and the area/type of tenant you seek.
If you are struggling for cash after such a large investment, YouRent’s ‘Free’ package is great for advertising to a large community of technology savvy tenants. You get all the benefits of the paid packages such as a personalised dashboard and a dedicated lettings executive, but you could miss out on your ideal first tenant. After sorting out a buy-to-let property, you want a smooth advertising process that covers all possibilities and reaches not just your local area. With the ‘Per Property’ package, for only £29 a month, you can market on huge marketplaces like Rightmove and Zoopla to thousands daily. It might cost a small amount but you will be able to get results quicker and starting earning right away, preventing void periods which will affect mortgage payments.
Becoming a landlord is a big responsibility and investment, which requires hard work, patience, organisation and an ability to manage costs. When done right it can be highly valuable long-term investment which will reap dividends, but there’s plenty of elbow grease needed to make it a success. If you cover these important steps and do your homework on the risks involved, ensuring you get the right tenants by marketing in a diligent way, there’s not many better businesses to invest in.