For many, becoming a landlord is an attractive prospect. Not only is investing in property generally great in the long-term, but it’s a fantastic source of residual income. However, you shouldn’t be blinded by the prospect of profits. Becoming a landlord is hard work! There is a tonne of regulations you need to follow, alongside some risks that you need to consider before throwing your hat into the private renting ring.
That’s where this article comes in. Becoming a landlord for the first time is confusing, so we’re here to provide helpful information to give you your best start in the private rent sector.
So, if you:
Then stick with us!
As you can imagine, landlords can reap incredible profits from their rental properties if they know what they’re doing. Depending on the location and type of housing, you can ask for higher rent prices. For example, if your property is based in London, then lucky you! Take a look at Homelet and compare London average rent costs to the national average. You’ll notice rents are much higher in London, due to its dense population and highly competitive market of private rents.
Investing in property is usually a very safe long-term investment too! This becomes especially true if you’re planning on renting them out. House prices, particularly around our largest cities, have been increasing at an incredibly fast rate. So much so, that for a person on an average wage, owning property can seem almost unattainable. This is why privately letting a property has become ever more popular in recent years. And it doesn’t seem to be slowing down anytime soon.
Prior to the homes act of 2018, the only properties that required you to hold a licence were HMOs. However, the homes act gave further power to councils to give them more control over the quality of private rented accommodations. This means that licensing conditions can change from one council to another drastically.
The best thing to do is check with your local council website. They usually have dedicated pages detailing the requirements and processes for licences, along with pricing (usually between £500-£700).
Acquiring a licence means agreeing to a number of conditions. This includes some safety regulations for your property while ensuring the comfort of your tenants. Now, the conditions can differ from council to council, but generally, there are some common one’s you should look out for:
Now, while we’ve gone over some of the regulations you might face, there are still a number of them that you should be familiar with. These usually come under the forms of human habitability, fire regulations, electrical and gas safety etc, which we’ll cover below. However, this is specifically for single-let properties. If you’re looking to explore the more lucrative HMOs, check our article on what HMO is.
It’s important to keep up to date with any new legislation on landlords. You can check the latest changes here.
Regardless of what type of property you’ll be letting, it is important to follow these regulations to the word. Not doing so could result in the loss of your licence! Not to mention, tenants can take you to court if they feel you haven’t delivered on your responsibilities as a landlord. All the more incentive to do things properly.
Fire regulations are important, as your tenants need to be warned if a fire breaks out, but also have the means of escape. This means putting an alarm on every level of your property and making sure the exits are kept clear so residents can leave quickly.
Carbon monoxide alarms are also a must in rooms that have a useable fuel or charcoal burner. We also recommend placing a carbon monoxide alarm in your kitchen if you use gas burners.
You will need a gas safety check every year, but they don’t cost much in comparison to the amount you could be making. This is to make sure that all gas appliances, pipes and flues are in proper working order and safe for tenants.
EPCs are used to measure the energy efficiency rating of your property. You should preferably get this done before looking for potential tenants. This is because tenants are required to be shown the EPC before they can begin renting.
It’s important to note that as of April 2020, all tenancies need to at least have an ‘E’ rating or above. The ratings go from A to G, A being the highest, so there is no need to ensure your property is completely efficient. We also perform an EPC service, so you can check with us if you haven’t got one already!
If you need to improve your property’s efficiency, you can do this by installing double glazing, putting in loft insulation or replacing your boiler with a more efficient one.
You need to make sure the electrical installations and appliances are completely safe to use. Strangely, there isn’t any regulated inspection requirement for this, so it is entirely up to you. We do recommend it, however, as if someone does get hurt because of a dangerous installation, you could be held liable.
If you require a deposit from your tenants, you need to put this deposit into one of three tenancy deposit protection schemes, which have been sanctioned by the government. This ensures that it’s handled fairly for both parties. For instance, at the end of a tenancy agreement, your tenants will get their deposit back. Alternatively, if there is any damage to the property, you can refuse to return the deposit and use it for repairs. You can also withhold deposits for cleaning if tenants have left your property in a state.
You must ensure that every tenant has the right to rent a property in the UK. As you can imagine, this has become doubly important since the advent of Brexit. Now every EU citizen must be checked thoroughly, to ensure that they are able to reside in the UK.
Every tenant must be checked for identification and any other documentation that is required if they aren’t a UK citizen. You need to be thorough, as if you rent out to someone who can’t legally live here, you could be liable for some heavy fines.
Responsibilities for repairs usually come in the form of maintaining the structure of the property and ensuring the property abides by health and safety regulations. For instance, if the boiler goes on the fritz, or if there are sunken floorboards that tenants can trip on, you must fix it.
There are exceptions though. Like if your tenant has been negligent and caused damage to the property. They will have to carry out any replacements or repairs of the items damaged. This is why it’s important to take an inventory of your property before a tenant moves in. You can also get a check-out report for the end of the tenancy.
If you need more information, we have a guide on landlord responsibilities for repairs, which goes into the subject much more extensively.
This can be answered in a few ways and it can depend on how hands-on you want to be as a landlord. So, let’s take a look at some options:
If you are looking for full property management, or just an agent to find you some tenants, they are easily found on the web and the high street. It’s up to you to find the best deal!
Keep in mind, if you are managing a property, you are must take care of any maintenance around the property. You are responsible for blocked drains, damage to the infrastructure, problems with the boiler etc.
For those of you who might still have some questions, or need some advice on what type of property you should invest in, have a look at our podcast! Julie Hogbin is our expert of the hour, an author and business management extraordinaire, who goes over some useful tips for those new to property investment. All of which can be very helpful for the new landlords on the block. Have a look!
At Fantastic Services, we provide a variety of services that are crucial for landlords. The professionals we work with are fully vetted, regardless of the job you need to be done. We can help with:
You can leave your rental property woes to us and focus on chasing those profits!
Find a professional to perform a gas safety check.
Disclaimer: Every piece of information here is meant for informational and educational purposes only. So please, do not use this as a definitive legal advice. Fantastic Services encourages you to seek authority professional counsel before you decide to act upon what you have read. For more information, check our disclaimer.
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We hope you found our article useful. If you have any experience in the rental sector or have some tips of your own, please, leave a comment with us below!
Image source: Shutterstock/ Jeanette Teare
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