In the UK, private renting is becoming the norm for a rising number of people. The rental sector has more than doubled since 2001, and this trend is predicted to continue as more and more individuals opt for renting over trying to purchase a home. The number of individuals who own their own home with a mortgage has fallen by around two million in less than ten years. With so many current and future tenants waiting in the wings, there is no better time to get into the business of becoming a landlord. Here we outline the beginner steps of starting this process:
Researching What’s Involved
Becoming a landlord is a great way to make a passive income, but it will require a lot of work, especially at the start. There are a lot of elements involved in being a landlord that you may not have considered, and something that you should before purchasing a property. As a landlord, legally you need to meet certain standards in ensuring the property is up to code, so you need to establish the state of the property you plan to buy. You will also be required to make decisions such as whether you rent unfurnished or furnished, allowing or disallowing pets or whether tenants can smoke inside the property.
Before committing to becoming a landlord, it’s advisable that you fully research what’s involved in the process from start to finish. If you have ever rented from a landlord, or know someone who rents out property, consider contacting them for advice. Alternatively, you will be able to find information online such as on GOV.UK about the rules and regulations of renting out property in the UK.
Being a Landlord
Becoming a landlord is a lot easier than you might think. All you need to do is start obtaining rental income from a property you own, and suddenly you’re a landlord. However, being a professional and credible landlord carries an awful lot of responsibility and duty of care.
If you have inherited or purchased an old property you wish to rent out, chances are it will need some renovation work to bring it up to scratch. You will be responsible for sorting out insurance to protect your property from accidental damage, such as fire and flooding. If you opt to supply furniture for the property, you need to keep it in good condition and ensure that all electrical items have been tested and are safe for use.
The property needs to be brought up to code with things like fitting smoke alarms and carbon monoxide detectors. The paperwork you will need to fill out will ensure these things are in place; there are documents you need before you take on your first tenant, such as an energy performance certificate, a tenancy agreement, an inventory (if your property is furnished), and a gas certificate.
You will need to decide how much to charge your tenants, and this should be carefully thought out based on your costs and the local housing market. Research letting websites for similar properties in the area to get an idea of what people are charging, look at how they compare to your property and check back frequently to see how quickly certain properties are snapped up by tenants.
Remember, your obligation as a landlord is to provide your tenants with a safe and habitable environment to live in. There is a lot involved that you need to consider before renting out a property. Other key obligations include:
- If you are providing your tenant with gas appliances within the home, you must provide copies of operating guides and manuals for these products.
- Only installing electrical appliances carrying the European CE certification mark.
- If you are providing a furnished property, furnishings such as mattresses and some other items will need to meet fire regulations.
- Your entire property must have a full gas safety survey annually conducted by a registered Gas Safe engineer.
- If renting to three or more people you will need to apply for an HMO license.
Another route you could take to becoming a landlord would be to use a letting agent; this could take out a lot of the time and hassle spent managing the property. Northwood has over 20 years of experience with letting properties, we are a well-established company and one of very few offering a letting service that aims to be risk-free. It’s an ideal solution for people who want to let their property with an assured income. You also get the reassurance of your property management being taken care of by professionals.
We offer a range of letting management options: Fully Managed, Rent Collection and Tenant Find. With over 85 offices across the country, our local experts have an intimate knowledge of the current market locations; all of our staff are trained locally, so they have the skills to successfully manage our landlord’s properties.
With a centralised hub of specialist departments, all Northwood offices can access the support of the experts:
- IT – ensuring the instant uploading of property details.
- Marketing – enabling properties to be marketed to the highest professional standard.
- Compliance – giving you peace of mind that your property is being let legally and doesn’t leave you exposed.
- Buy-to-let specialists to support investors.
Northwood operates under strict codes of practice and all of our offices belong to one of three Government-approved money protection schemes. We deliver an award-winning service and carefully select tenants for every property. We ensure all tenants are fully referenced, credit checked and confirmed that they have a legal right to rent in the UK.