Top 10 Tips for new first-time landlords
- 9th July 2008
- Landlord Property News
Unlike buy-to-let investors new 'circumstantial' landlords may be unclear about legal obligations or attracting tenants.
Stephen Ludlow, Director of ludlowthompson.com, explains: “Virtually overnight people who never anticipated becoming landlords are letting their properties because they are unwilling to accept lower prices and circumstances mean they are unable to live in the property themselves.”
“For example, they may have inherited property, work commitments mean they need to relocate or they need to accommodate a growing family.”
“Unlike buy-to-let investors new landlords may not have had time to research the market beforehand and may not be clear on how to attract the best tenants or their legal obligations as landlords.”
1 Be aware of recent legislation for landlords, such as rules regarding Houses of Multiple Occupancy (Properties let to three or more tenants who form more than two households and share a bathroom and kitchen) and tenant deposit schemes required to safeguard tenants’ deposits.
2 Ensure that you are letting your property to a reliable tenant by asking a reputable lettings agent to run a comprehensive reference and credit check before the lease is signed. You should also ask your agent to compile an inventory or a schedule of condition and take a damage deposit equivalent to six weeks rent.
3 Check that your lettings agent is a member of the Association of Residential Lettings Agents (ARLA), The National Association of Estate Agents (NAEA) or The Estate Agents Ombudsman Scheme (OEA).
4 Don’t make the mistake of including bills in the rent. With energy costs rising rapidly landlords will find that their rental income could be significantly lower by the time the tenancy agreement comes to an end.
5 Don’t over-furnish the property. The trend for tenants to rent for longer before buying their own property means that they are now more likely to own at least some of their own furniture. Try to keep the décor neutral and don’t personalise the property with paintings or ornaments as tenants may hide these in cupboards where they are more likely to get broken.
6 Put electrical appliances and boilers under a service contract so that the tenant can call an emergency engineer directly. You should provide details of emergency phone numbers in a tenant’s handbook which could also give details on how to use the household appliances, how the boiler and the heating is operated and details regarding the local authority, such as the amount of council tax payable, car parking, and when refuse and recycling is collected.
7 You must submit a self-assessment tax return to HMRC giving details of your rental income. Remember to claim for any allowable expenses such as accountancy, legal and other professional costs such as agents’ fees. You can claim for mortgage interest but not capital repayments on the amount borrowed, and for the cost of repairs as long as they cannot be considered to be improvements to the property.
8 If you have a mortgage you must obtain written permission to let your property from your mortgage provider as failing to inform your lender may put you in breech of your mortgage conditions. If you own a long leasehold you will also need the written consent of your freeholder or their managing agent, who may ask you to write covenants from the head lease into the tenancy agreement.
9 You will also need to tell your buildings and contents insurance provider. Even if you are letting an unfurnished property it is a good idea to take out contents insurance as this will provide you with a level of public liability insurance.
10 Gas safety checks must be carried out every 12 months by a CORGI registered engineer and a record of the checks must be kept for 2 years. A copy of the record will need to be issued to each tenant within 28 days of the check being carried out and a copy issued to any new tenants before they move in. You should also ensure that all fire and security alarms are in good working order.
Unlike buy-to-let investors new landlords may not have had time to research the market beforehand.
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