There has not been a better time to be a landlord. The average monthly rent in the UK is now at a record high of £1,007, so there is potential for landlords to make more money than they ever have previously.
If you’re interested in taking advantage of this boom by renting out property, here are a few things to bear in mind before doing so.
View it as a business
Being a landlord is not as simple as sitting back and watching the money roll in for letting someone else live in your property.
You will have expenses in the form of repairs that could crop up at any point, insurance premiums, legal fees and accounting fees. Owning multiple properties also means you will pay more tax.
It won’t be an easy ride, so treat it with the seriousness it deserves.
Learn the law
There are certain standards and regulations you must adhere to when renting out a property. These include:
- Keeping the property safe and free from health hazards
- The safe installation and maintenance of all gas and electrical equipment
- Providing an Energy Performance Certificate (EPC)
- Placing your tenant’s deposit in a government-approved protection scheme
- Ensuring your tenant is legally allowed to rent your property (if in England)
- Giving your tenant a copy of the ‘How to rent’ checklist when a contract is signed
You could maximise your income by letting out your property to multiple tenants who are not members of the same family. This is known as a house in multiple occupation (HMO).
If you have at least three tenants (forming more than one household) and shared toilet, bathroom and kitchen facilities, your property is an HMO. You’ll need a licence if your HMO property is occupied by five or more people.
Choose how to deal with tenants
You can either deal with the tenants yourself or use a letting agency, which will likely charge you a set-up fee and take a portion of the rent paid to you (typically ranging from 5-15%) each month as its fee.
It may sound like a lot, but you can rely on them to ensure any required repairs are carried out swiftly. It also saves a lot of hassle if your permanent residence is a long distance from the rental property or you have an extensive portfolio.
When you’re starting out, bringing an agency on board could afford you more time to get to work on your next renovation project.
Make your property safe
You’ll need to make sure your property complies with the safety regulations placed upon all rentals, but you might want to provide your tenants with some additional security features.
Code locks can be useful if your property is an HMO or if you want to offer to help residents feel their valuables are secure should they go away for a long weekend.
Smoke and carbon monoxide detectors, a first aid kit and a fire extinguisher are some other useful safety items to have in the house for your tenants.
