If you are thinking of renting out a property, or even if you are an established landlord, then there are certain boxes that need to be ticked before you can put the property on the market to let.
If not done correctly then you may find the house causing issues for you over the longer term.
Preparation is key to ensure a successful rental period for a landlord.
At James Kristian we have plenty of experience in handling properties for landlords, so we’ve put together a list to help you as a prospective landlord to make sure you get going on the right footing.
1. Make sure the property is competitively priced.
You must do your research when it comes to pricing your property for the rental market, everyone wants to maximise the rental profit you make every month.
However, if the property is overpriced it will sit empty as you lose tenants to more competitively priced properties.
The last thing you want is for a property to be sitting vacant for months.
The best way to research is to look at properties in your street, or the local area and see what they rent out at.
You can even book viewings to see how your property compares to others in terms of price and décor, this will help you to set your monthly rental price.
Then once you know the average prices for rent in your area, you can price accordingly and put the house on the market.
2. Plan for uncertain outcomes with the correct landlord insurance.
Landlord insurance is different from regular insurance, so make sure you have the correct insurance in place when you rent out your property.
If you don’t and something goes wrong, then you may be in serious trouble, both from a legal and financial standpoint.
A good landlord policy can cover you for rent protection, or if there are any legal disputes with your tenants.
But mostly it will cover you if there is any significant damage to the property, if you have a break in, or if there is damage to the property from a sitting tenant, the piece of mind that comes from having good robust policy in place is worth its weigh in gold.
3. Account for unseen expenses
One thing for sure if you’re a landlord, you will at some point have to pay out money you never accounted for. This may be from a broken window repair to having to replace a boiler.
Its very important that you have a reserve if money that you can tap into in an emergency. This is so important, and one of the main points new landlords overlook.
A pot of money is needed to pay the rent in times of void periods to see you through and pay the mortgage. Ideally you need at least six months’ worth of mortgage payments in reserve for void periods.
When the winter comes calling, this is generally when your expenses increase, especially when it comes to boiler repairs and leaks.
So its vital you have your emergency repair fund in place, a happy tenant tends to be a long term tenant, and fixing repairs quickly is one way to make sure your relationship and reputation as a landlord is well respected.
4. Pay attention to the law
If you’re a landlord with only one rental property, it is still a business, and as such needs to be treated as one.
You must be fully versed in the legal requirements for UK landlords, indeed you have to know any regional laws dictated by your local councils for tenancy requirements.
This is a heavily regulated industry and you need to make sure you stay on the right side of the law, you don’t want your own ignorance to cost you money, or wind you up in court because you don’t know the laws associated with being a landlord.
5. Know your tax obligations in relation to section 24.
The tax laws are not so friendly anymore for private landlords, and with the introduction of Section 24, and the phased reduction in tax relief for mortgage payments. It means you have to really crunch your numbers when it comes to making a profit from your rental income.
If you are looking into becoming a landlord for the first time, then you need to look into the advantages of setting up a limited company for property acquisition.
The moral of the story when in comes to property tax, do your homework on the operational costs for you, speak to an accountant who specialises in property to make sure it’s a viable option for you.
6. Consider a Gas Repair Policy
If there is one thing you can guarantee as a landlord, at some point you will have to fix or replace a broken boiler. And boilers have a tendency to break at the most inconvenient times.
Leaving you to receive a late night call from a cold and disgruntled tenant, one way you can remedy this is to take out a gas/boiler repair policy.
This will give you access to a 24hr call out and repair service, this can really be lifesaver for a landlord.
Private contractors can be very expensive to call out at 2am to repair a boiler, so if you don’t have any good friends that fix boilers, make sure you plan ahead with a policy.
Factor the cost into your rental income and sleep easier knowing when that late night call comes you’re prepared.
7. Find reliable tradesman for your maintenance team.
When it comes to getting work done on your property, it’s important to find tradesman who are good at what they do, and are reliable.
Particularly with gas and electrics, these two areas are probably the ones you will deal with most, and it’s very important to use registered tradesman for your yearly gas certificate.
There are websites to help you find trusted tradesman, and also ask for referrals from people who have had work carried out recently.
8. Don’t skimp when it comes to paying for work.
The old saying goes ‘ You get what you pay for ‘ and this is certainly true when it comes to hiring tradesman.
Cheapest is definitely not the best option.
If you choose to fix and Refurb at the cheapest possible cost, then it won’t be long before you are paying out again as the cheap work and cheap materials cost you more in the long run.
It’s worth paying out for quality work, as it will save you more over time.
Plus if your tenant knows you won’t pay out for decent work, they will not be as inclined to look after your property.
9. Carry out thorough tenant checks and know your tenancy agreement
There are ways and means to run checks on potential tenants from various online sources, and it always helps to get references off previous landlords or employers.
A guarantor for the deposit and any repairs is also an extra reassurance for you as the landlord, in the event of any uncertainty.
And make sure you know exactly the terms on the tenancy agreement, how long is the agreement for, and any other stipulations that make it appropriate for your property.
If you are renting privately, when you meet the tenant ask them any important questions you need to feel they are right for your property.
10. Choose a reliable letting agent carefully
If renting out your property is not something you want to do privately, then the next option is to use a letting agent.
But like finding a good tradesman, make sure you do your homework; don’t be afraid to ask questions to your potential agent.
How long have they been operating?
What professional bodies do they belong to?
Can they provide any testimonials from other landlords?
Above all choose an agent with professionalism and experience to help you rent out your property. One you can have a mutually beneficial working relationship with.
If you need any further advice on renting out your property, why not give James Kristian a call, and we will be only to glad to help you.