If you’ve been looking into how to become a landlord, look no further. Our experienced team of Ilford estate agents at RE/MAX Star has put together this complete guide to becoming a landlord with easy steps you can follow to ensure you are not left venturing into the unknown and guarantee your success.
Here are the steps you need to take and the elements you need to consider when you want to become a landlord:
The first item on your list should be the state of the property. This element will weigh in most when determining the amount of rent you can charge for your home.
If the home is in complete disrepair, you will, of course, have to invest in renovation works that will bring the property up to code and make it appealing to potential tenants. This means you will incur costs before you will be collecting money.
On the other hand, if your property is in tip-top shape and fully renovated with top-quality materials, this probably means you can charge more rent for your property than the average of the area.
The other elements you should consider before letting your property include:
Next, you will need to make sure you have set yourself up as a business owner before you start letting out the property. To do this, register with the HMRC for self-assessment.
The income you collect from letting the property should be included in a tax return that needs to be registered by 5 October of the following year.
Some landlords prefer a more hands-on approach to letting their properties, while others find hiring a letting agency more convenient. A professional agent or agency will charge a fee, but they will also take on much of the work described in this landlord’s guide on your behalf, such as:
A letting agent or agency will also be able to advise you as regards the rent you can charge for your property and how you can make the home more appealing or increase its value so that you can charge more rent.
You also have the option of choosing a property management company that will also handle:
If having more free time and less hassle when letting your property sounds better for you, a property management agency may make more sense.
The decision is up to you based on your specific preferences and conditions.
The Local Council is allowed to perform Housing Health and Safety Rating System (HHSRS) inspections on rental properties at any time they choose. The property must also be up to standard according to the Homes (Fitness for Human Habitation) Act, namely, to be comfortable and safe for the tenants to live in.
If the property does not meet the Homes (Fitness for Human Habitation) Act requirements, your tenant may take legal action against you.
Therefore, as a landlord, you will have to ensure your property meets health and safety requirements such as:
You are, as a landlord, responsible for repairs relating to:
You should also take into account that, unless it’s an emergency, you will need to notify the tenant 24 hours in advance when you need to come in to make any repairs. Otherwise, you are liable to a rent abatement, which is a rent reduction your tenant can claim when you are being disruptive.
As you probably well know, letting a property also comes with some costs. You will most likely be able to cover these costs with the rent you collect from the tenant. In addition, you may also consider setting up a fund for unexpected costs.
The costs of being a landlord include:
Your main responsibilities as a landlord relate to protecting your property as well as your tenants.
Property and Equipment/Appliance Maintenance
As previously mentioned, you will be responsible for bringing the property up to code, as well as for property and equipment repairs. If you are using the services of a property management company, they will be managing the repairs on your behalf and bill you for them.
The deposit paid by your tenant must be kept in a Tenancy Deposit Protection Scheme. You can either do this by yourself or let your letting agency handle the tenant deposit for you.
You are only allowed to increase the amount of rent you charge for your property in certain situations. These include:
You will still be allowed to see and access your property after you rent it out, provided that you notify your tenants 24 hours in advance. You will also need a reason for your visits, such as making repairs or scheduled checks.
It is, of course, your right as a landlord to collect rent each month on the date agreed with your tenant in the tenancy agreement. The tenancy agreement should also include the circumstances in which you can evict the tenant if they fail to pay the rent on time.
We need to know if you require a Sales or Lettings valuation to provide you with the right local expertise.