Becoming a landlord for the first time is a big undertaking for anyone irrespective of their background or experience. There are plenty of areas that you need to consider, with a good understanding of regulations and keeping on top of your costs, both key parts to grasp.
We have produced five points that will assist you in getting off to the best start as a landlord. You can not avoid financial considerations and letting-laws, both of which can seem a little scary when you first look into them. By crossing off our check-list one by one, you will gain the confidence of your tenant and soon get used to the processes that you need to become an expert in. At the same time, you will be protected financially should anything go wrong and your knowledge of the sector will develop.
1. Don’t avoid background checks on your tenant
This is non-negotiable as you need to ensure they will pay on time as well as treat your property with due care and attention. Often evidence is required that you did make background checks on a tenant, if you ever need to claim on rent guarantee insurance.
2. Don’t allow lettings law to bypass you
We are not saying you need to get yourself a law degree in property management before you become a landlord, but it is vitally important that you are au fait with your rights and those of your tenant.
The Housing Act 2004 which applies to England and Wales, requires landlords to recognise legal standards for the private rental sector (PRS) regarding conditions. The UK Government’s Housing Health and Safety Rating System is useful for anticipating potentially serious problems.
HMOs (Houses in Multiple Occupation) have their own suite of regulations. These are enforceable irrespective of the property being a house or flat. They apply if three or more are not from one household (for example a family), and share facilities like a kitchen or bathroom.
Laws over evictions are also worth getting a handle on with a variety of options to understand. You may need a Section 8 or Section 21 notice for England and Wales depending on the circumstances. Certain legal criteria must be met if you require a repossession case to be successful. For example, to issue a Section 21 notice, occupants with an assured tenancy (AST) must be in receipt of:
- The leaflet “How to rent – the checklist for renting in England”
- A gas safety certificate
An EPC – energy performance certificate
The tenant’s initial deposit must be placed in a government-approved tenancy deposit scheme (TDP).
3. Don’t overlook contact details
This sounds simple, but if overlooked can lead to delays and a breakdown in trust between you and the tenant. Have multiple ways of contacting each other, for example exchange email addresses and phone numbers before the tenancy begins. It is always worth checking that these are still correct, particularly if your tenant uses a work email or work phone number. There are a good number of reasons why the tenant would want to contact you and vice-versa. Sometimes it will be time critical so correct details are imperative.
4. Don’t allow your property to deteriorate
It is vitally important that you don’t neglect your property. This will ensure that any issues are identified early. It will also mean there is communication between yourself and the tenant and should lead to a good level of mutual confidence. When you do want to schedule an inspection, don’t forget that you must give at least twenty-four hours notice in writing (see the Landlord and Tenant Act 1985).
5. Don’t ignore insurance
Rental property insurance cover will be different to any you may have had previously and will not be the same as the building content policy on your own home. We recommend you take out a specialist Landlord Insurance policy. Many mortgage agreements require you to have specialist Landlord Insurance policy so you must ensure you are not breaking that contract. You will want your policy to cover occurrences such as malicious or accidental damage, and theft by a tenant.
James Collins, Managing Director of Just Landlords, who specialise in insuring landlords, highlights that there are many responsibilities from letting a property. He picks out the most important responsibility as being able to offer important safe and comfortable housing. Being a landlord is a business but you must never ignore the effect this may have on the lives and conditions of your tenants. He echoes our five point plan and is a big advocate of following the legislation and having an accountable attitude toward tenants. Your reputation is at stake and it’s essential you build a strong one!