So, you’re becoming a landlord. Now what?
You may want to become a landlord intentionally, you might not even think you’re a landlord, but if you own a property and someone else pays you to live there, then you’re a landlord – even if your tenant is a friend or a relative! So, if you’re letting your property, what do you need to think about?
Finding tenants:
- Have all prospective tenants complete an application form. This needs to include personal details, National Insurance Number and also previous addresses dating back three years. This also needs to include a check for immigration status of the prospective tenants as it is the responsibility of the landlord to ensure the tenant’s “right to rent”.
- Take up references and carry out credit checks to make sure they’re likely to be able to pay the rent.
- Ask the tenants for a guarantor. A home owner in stable employment is usually a good person to guarantee rent payments, but credit check the guarantor as well, just to be sure.
- Always take a deposit and protect the deposit in a relevant scheme. Give copies of all relevant documents to the tenant and their guarantor – and get a signature to say they have received them.
- Always have a tenancy agreement in place before you hand over the keys.
- Make sure you see photo identification too – passport or driving licence is sufficient.
Safety and energy
- You MUST get any gas appliances checked by a qualified engineer and a Gas Safety Certificate will be issued. Give this to the tenant.
- You must install a smoke alarm on each floor of the property.
- You must also install a carbon monoxide detector in every room with a solid fuel source.
- You must make sure these are working at the start of the tenancy.
- You must also give your tenant an Energy Performance Certificate and a copy of ‘How to rent: the checklist for renting in England’.
Moving in
- Complete an inventory and condition schedule. Agree this with the tenant and get it signed by them. It’s a good idea to include photos (with date) to show the condition of the property and contents.
- Both you and the tenant will want to read and agree the meters when they move in.
Using an agent
Using an agent can take a lot of hassle out of the process, but will of course reduce the income that you receive from the property. If you do decide to use an agent, choose carefully! Your property is probably your most valuable asset and so you need a reliable agent to manage it properly for you.
Insuring your property
Don’t be tempted to skimp on landlords’ buildings and contents insurance. Standard home insurance doesn’t cover many of the risks of letting that are covered by full landlord insurance, so claims may be invalid. You will also need to let the insurer know the type of tenant that is in your property as risk (and premiums) will vary. Even if you are letting your property unfurnished, it is worth having a minimal amount of landlord contents insurance to cover items such as carpets and fixtures.
For more information on the best landlord insurance to fully protect your property and its contents, call us on 01702 533 400 or arrange a call back.
Purchasing additional properties
There is now an extra hurdle to think about, following new lending regulations introduced on 30th September 2017. If you have four or more properties you’ll need to present your entire portfolio to your bank or building society, to be assessed for viability, in order to get a mortgage approved. Before now, this only applied to the property in question.
Limited companies
More landlords are setting up limited companies to mitigate tax changes. This is however a complex area and will not be appropriate for every landlord so professional advice should always be sought.
Here to help
Get in touch with our team of Mortgage and Protection Brokers to discuss the most cost-effective buy to let mortgage and landlord insurance products to meet your needs. Call us on 01702 533 400 or arrange a call back.
This article was produced in partnership with Assurant.
Assurant Intermediary Ltd offers Mortgage Advisers in the UK a quoting platform (Quoforma+) to source home insurance products from across the market.
Part of Assurant (NYSE:AIZ), a global provider of risk management solutions, helping protect where people live and the goods they buy.
With approximately $32 billion in assets as of December 31, 2017 and $6 billion in 2017 revenue, Assurant operates in 16 countries, while its Assurant Foundation works to support and improve communities.
References
Available to download here:
https://www.rla.org.uk/landlord/documents/how-to-rent.shtml
Further information:
https://www.rla.org.uk/landlord/guides/recruiting-a-letting-agent.shtml
https://www.gov.uk/check-tenant-right-to-rent-documents