Top ten tips for new landlords
A month after new pension laws were introduced to allow people aged over 55 to withdraw their money in one go and spend or invest it as they wish, the lettings industry has seen a boom in ‘silver landlords’, keen to invest their money in property as they reach retirement. If you are thinking about becoming a landlord for the first time, Jon Barker, Associate Partner at Fenn Wright provides his top ten tips to help you get on your way.
1. Do your research
It’s important to work out who your target audience is going to be and ascertain how suitable your property is for that market. For example, if your property is located near a good school in the countryside, then it would suit a family. If it’s near a university it might suit students or if close to a main line station with direct access to London, you would attract interest from commuters. This will help you prepare your home for let in the best way possible to maximise rental potential and avoid lengthy void periods.
Where the property to be let is subject to a mortgage, the landlord must always get the lenders written consent before a tenancy starts.
3. Take out insurance
As a landlord, you will need specialist landlords insurance to limit your exposure to risk and your financial wellbeing. It is essential you insure your property and your contents (if relevant) adequately, both while the property is empty and while it is let. Your insurers must be told that the property is to be let as failure to do so may invalidate your cover. Fenn Wright can recommend a professional insurance company with a full range of landlord insurance policies.
We also recommend that our landlords take out Rental Guarantee Insurance to protect themselves against a tenant de-faulting on their rent.
4. Choose a trustworthy letting agent
There are still many rogue letting agents out there, despite new rules and regulations to help protect landlords and tenants. Look out for accreditations such as ARLA, Property Ombudsman and Memberships of professional bodies.
5. Unfurnished or furnished?
Tenant demand is greater for properties that are let unfurnished, which traditionally includes just carpets, curtains and a cooker as a minimum. This works well for landlords, who avoid becoming responsible for furniture and the annual testing and maintenance of electrical appliances.
6. Tenancy deposits
By law, tenants’ deposits must be put in a reputable deposit scheme. This comes under the 2004 Housing Act, which states that all deposits must be placed into a protection scheme within 14 calendar days of receipt.
7. Ensure the property is looking its best for marketing
To maximise rental potential, it’s important that the property is prepared for let. This includes its curb appeal as well as the interior. First impressions count and be it on a letting agent’s website, on a property portal such as Rightmove or even in a brochure, a potential tenant will initially judge a property based on photographs, and an untidy property looking shabby will just put somebody off. We can certainly give some advice on how best to present your property to maximise the projected rental income and interest.
8. Energy Performance Certificates (EPC)
EPC’s are needed whenever a property is rented and must be ordered before the property is marketed. An EPC contains information about a property’s energy use and typical energy costs. Your property will also be given an energy efficiency rating from A to G and is valid for 10 years. It’s worth improving the rating if you can with A-D considered the best. Find out about taking advantage of government funding to make the property more energy efficient by visiting the official website. Tenants expectations are still very high, and will only pay the premium for good quality homes that don’t cost the earth to live in. Remember, you are going to be competing with other properties on the market so make sure you are doing everything you can to make yours stand out from the crowd.
9. Landlord gas safety
If you have any gas appliances within your property, a 12 monthly gas safety check must be carried out on all gas appliances by a Gas Safe registered engineer. A record of the safety certificate must be forwarded to your existing tenant within 28 days of the inspection or to new tenants before they move in.
10. Electrical safety
It is also important to ensure that the electrical system and all electrical appliances/fitting within the rental property are safe and in good working order. Unlike gas regulations, there is no law that says you must have a landlord electrical safety certificate. However, should the electrical system, or any fitting cause harm to a tenant you could be held liable.
For more information about how Fenn Wright can help you let your property, have a look at our service options online.