As lettings agents we come across every kind of landlord. New ones, experienced ones and even accidental ones! We know that starting out as a landlord can be a daunting experience and if you’re not careful it can be easy to make a mistake. So we thought it would be a good idea to provide a quick checklist of what you need to know before becoming a landlord.
Find the right property
It’s really important that before purchasing a buy to let property that you do plenty of research in to finding the right location and property type. Of course a letting agent such as The Personal Property Shop can help, but you can find lots of helpful information online. The main thing to check is how popular that particular property type is in the area you’re buying – you want something that can be let easily and that there is demand for. Also work out the kind of rental yield you can expect (here’s a helpful calculator here – http://www.thisismoney.co.uk/money/buytolet/article-2991821/Buy-let-yield-calculator.html ) as many mortgage companies will stipulate a minimum rental yield before they will lend on a buy to let property.
To use an agent or not to use an agent?
Finding a good tenant without access to Rightmove and Zoopla can be tricky (although not impossible). There are sites such as Gumtree where you can advertise your property free of charge, but beware of poor quality tenants! 99% of all tenants now look for properties on Rightmove and Zoopla so it’s normally a good idea to use a local letting agent to help you market the property. In terms of managing the property, well that’s really down to you and your individual circumstances. Consider how busy you are, do you have time to be dealing with tenant related issues? How local are you to the property?
Legislation and landlord requirements
There are numerous legal requirements of landlords in the UK so it’s important that if you’re not using a letting agent, that you research thoroughly before letting your property. EPCs, gas safety certificates, tenancy agreements, electrical safety, deposit schemes, fire and safety regulations are just a few things to consider.
Landlord Tax Requirements
Remember that when you start renting your property you must inform HMRC and you may have to pay tax and if you don’t you could be charged a penalty. You can find more information here – https://www.gov.uk/renting-out-a-property/paying-tax
Landlord Insurance
You may want to consider various types of landlord insurance. From rent guarantee to accidental damage, insurance can “save your bacon” if things go wrong later down the line. It’s weighing up if you have the capital to cover gaps in rent or damage to the property or whether insurance may be a safer option. It’s always a good idea to approach a broker who can shop around for you and get you the best deal. A bit like http://www.larksway.co.uk/ based in Hatfield Heath.
Buy to Let Mortgage
Once again when taking out a new buy to let mortgage it’s always best to use an independent mortgage advisor to make sure you get the best option for you and the best deal. If you’re renting out an existing property then you’ll need to notify your lender that you plan to rent the property and obtain their permission first. If you don’t notify them in advance then the penalties can be severe.
Prepare your property
Once everything is in place it’s time to find yourself a good tenant. Before you do that though, it’s worth spending the time to prepare the property. Make sure everything is in good working order and that the property is well presented. If the property looks pristine then your tenant is far more likely to look after the place and keep it in good order. If the property is shabby then they may not bother! Not to mention the fact that a well presented property will attract a high calibre of tenant and mean you can let it quicker. Sometimes it’s worth the investment of repainting before you let the property for the sake of a few hundred pounds.
Hopefully that covers what you need to know before becoming a landlord. For more advice or information then we are always happy to help. As letting agents in Bishop’s Stortford we know the area well and can provide advice on the right kind of property to invest in and the kind of rental income you can expect from various property types. To get in touch either call us on 01279 719193 or email info@thepersonalpropertyshop.co.uk.
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