As the housing market slows, more and more people are being driven to rent property and rents are reaching record highs this year. Many people are also becoming landlords for the first time as they can’t sell their property and decide to rent it out instead.
Demand for rental property has never been so high and it’s a great time to generate extra income as a landlord.
But what are your obligations as a landlord and how do you get ready for tenants? Here are our top tips on what you need to think about when renting out a property and what you need to do to protect yourself, your property and maximise your rental income.
Before potential tenants view the property, make sure that it’s clean and that you have finished any DIY. Will you let the property out as furnished or unfurnished? Remember that if you’re providing ‘contents’, then you need wider insurance cover.
It’s vital that you comply with fire, gas, electric and furniture regulations. These obligations are discussed in detail in our book The Complete Guide to Residential Lettings, written by a solicitor specialising in landlord and tenant law.
You must make regular safety checks and keep records to protect your tenants. Safety checks also help to ensure that your insurance is valid. Our Fire Risk Assessment Kit can help you to meet your fire safety obligations.
Letting agents are useful if you don’t have time to manage your rental property, but they take between 8-15% of the rental income profit. Although they help you to find tenants, do still get involved with the tenant interviews as it’s important that you’re comfortable with the person moving in. Also, do make sure that you’re getting the most competitive deal from your letting agent.
If you’re letting out the property without using a letting agent, then you need to reference the tenants yourself. Websites, such as RentCheck’s Tenant Checking Service, can do it for you at a fixed price. It's vital for you to find out if your tenant is able to pay the rent with a credit check.
When renting out a property it’s important that you know your obligations as a landlord. If you want to enter the tenant’s home, for example, then you must give the tenant at least 24 hours’ notice. Lawpack's The Complete Guide to Residential Lettings provides landlords with information on their legal obligations and our book Landlord’s Letters provides you with all the template letters you need to help you easily liaise with your tenant.
A tenancy agreement is a great way of protecting your rights and the property. Lawpack’s tenancy agreements are all solicitor-approved and include a long list of terms and conditions, which outline, among others, whose responsibility it is to upkeep the property. A tenancy agreement outlines in writing how long the tenancy will last and the notice period needed to evict the tenant.
Find out more on the dangers of not making a tenancy agreement.
Getting a deposit is a good way of protecting against any damage and since April 2007, all landlords must register a tenant’s deposit with an approved Tenancy Deposit Protection (TDP) scheme. It’s usual for the deposit to be 4-6 weeks’ rent.
Making a detailed and accurate property inventory is vital if you want to protect your rental property, particularly if it’s furnished. A property inventory proves how the property looked and what was provided the day the tenant moved in and is proof of evidence should there be a dispute over the deposit or any damage to the property.
It’s important that you get landlord insurance cover, as most standard house insurance policies don’t provide the level of protection landlords need. A good insurance policy should cover professional tenants, students and DSS tenants, loss of rent, unoccupied periods, alternative accommodation, tracing and accessing leaks, accidental damage, legal expenses and liabilities, plus rent protection.
Most tenancy agreements end at the end of the term of the tenancy agreement, without any problems. You can serve notice for a tenant to leave at the end of the fixed term easily by using Lawpack’s Section 21 Notice. But if your tenants are becoming a nuisance and you need them to leave before the end of the term of the tenancy, then you need proof that the tenants have broken the terms of their tenancy agreement. If the tenants are in rent arrears of more than eight weeks, you can start eviction proceedings with Lawpack’s Section 8 Notice.
Find out more on the eviction process with Lawpack’s Tenant Eviction Kit.
Published on: July 28, 2011