There’s more to becoming a landlord than simply buying a property and renting it out to tenants. Landlords must adhere to a strict set of legal requirements and responsibilities, and if they fail to do so, they could face severe penalties.
Being a landlord in the UK can be very financially rewarding, but it’s not as easy as you might think and especially for first-time landlords, there’s a lot to get your head around. If you’re considering becoming a landlord, it’s essential that you understand exactly what you’re getting into before you commit.
In this article, we take a close look at the steps new landlords must take and things you should consider so you can make a more informed decision about whether it’s a good fit for you.
Understand your responsibilities
Before you financially invest in a property or find tenants, it’s important that you understand what being a landlord involves. Working with a property management company can help ensure that you comply with all the landlord’s legal requirements, including:
- Energy Performance Certificate
- Electrical Safety for Appliances
- Electrical Installation Condition Report (EICR)
- Plug and Socket Safety
- Gas Safety Check
- Smoke and Carbon Monoxide Alarms
- Furniture and Furnishings Regulations
- Tenancy Deposit Management (must be held in either The Deposit Protection Service, mydeposits or the Tenancy Deposit Scheme)
- Landlord Selective Licences
- Right to Rent Checks
- Maintaining the property, both internally and externally
- Dealing with repairs (sometimes in an emergency)
If you don’t meet these obligations, then it could result in a fine or legal action.
Find the right property
Once you’re set on becoming a landlord, it’s time to explore property options. Ideally, you should find a property in a desirable location that will rent quickly. Consider the local amenities, transport links and the types of tenants you want – whether they are students, professionals or families.
It’s also important to make sure that if you have a mortgage on the property, it’s a buy-to-let mortgage.
Some standard mortgages have clauses that prevent you from letting the property. If you have a standard mortgage, you’ll need to switch it before you can start renting it out.
Secure a buy-to-let mortgage
If you’re becoming a landlord with a mortgage on the property, then you’ll need to secure a ‘buy-to-let’ mortgage. These often mean you’ll have to put a larger deposit down and come with a higher interest rate.
Note, if you’re a cash buyer, who won’t require a mortgage on the property, then don’t forget to budget for the likes of stamp duty, legal fees, insurance and any refurbishment costs.
Register and certify the property
Before letting the property, make sure you:
- Register with your local council or a relevant scheme (this isn’t always a necessity, but it is required in some regions, so it is worth checking)
- Get an Energy Performance Certificate (EPC) – you must have a rating of E or above (this is set to change to a rating of C)
- Arrange a Gas Safety Certificate (renewed annually)
- Install smoke and carbon monoxide alarms
- Carry out an Electrical Installation Condition Report (EICR) – this is required every five years
Find the right tenants
It can be hard to know if you’ve chosen the right tenants, but as a landlord, there are some steps you can take to ensure you have taken the right measures for screening them. Be sure to:
- Check that the tenant has the ‘Right to Rent’ in the UK
- Carry out credit checks
- Verify employment and income
- Ask for landlord references
Carrying out these checks can give you peace of mind that, legally and financially, your tenants are in a position to rent your property.
Are you thinking about becoming a landlord?
If you are considering renting out a property but would like Shortland Horne to manage it for you, please get in touch to discuss your requirements.