7 steps to take you from zero to hero in the private rented sector
Over the last couple of years, there has been one UK property trend that has slowly gathered momentum: the rise of the accidental landlord. If you are in this situation, the steps we outline in this article will help you maximise your property’s rental potential.
Are you an accidental landlord?
If you have unexpectedly found yourself in the position of letting a property, then you’re an accidental landlord. The most common reasons for becoming an accidental landlord are:
- You have inherited a property and can’t sell it
- You have moved home and can’t sell your original property
Whatever the reason, the private rented sector is new to you. You haven’t planned to be a landlord. You aren’t prepared to be a landlord. But you don’t want to let your property sit empty and idle. While waiting for demand from homebuyers to pick up, letting your property is a wise decision. Whether you have a mortgage on the property or not, the rental income is a welcome bonus.
The question is, how do you maximise the potential of your new status as a landlord?
Step 1: Understand your responsibilities
When you let a property, you take on a range of responsibilities. This includes being responsible for the safety and well-being of your tenants in your property. You should be ready to accept calls for ‘emergencies’ on a 24/7 basis – you never know when that boiler is going to blow.
You should also consider the financial side of the equation. The extra income is great, but, depending on your individual tax position, you may have to pay tax. Read our article “Tips to help you avoid screwing up your buy-to-let tax return” for some pointers and advice.
Also, if your mortgage is a homeowner’s mortgage, it may preclude you from letting the property. Check if you are allowed to let the home under the terms of the mortgage before you break the rules.
Finally, you will be responsible for all maintenance and repairs. It’s best to make regular property inspections to ensure that your tenants are treating your property well and that there are no small maintenance issues to attend to before they become expensive repairs.
Step 2: Prepare your property for the rental market
When you let a property, you take on a lot of responsibility. It must be fit for habitation, and getting it ready for tenants means that you will need to:
- Ensure it has a gas safety certificate
- Undertake a SWOT analysis of the minimum energy efficiency standards (MEES)
- Make sure that the property is in good decorative order
- Undertake any repairs that are needed
You will need to consider whether to let the property furnished – and this may depend upon your ideal tenant, as well as what other landlords in the area are offering.
Step 3: Know how much to let the property for
You will need to do some market research to ensure you are asking for the right rent. Charge too much and your property will remain unlet. Charge too little and you will attract the wrong sort of tenant. Maximising rental potential is a balancing act in which you must find the sweet spot of rental prices – the prices point at which it will let quickly and to the best tenants.
This is especially difficult if you don’t live in the same area as the property you are letting. If you are in any doubt about how to price your property for the rental market, contact one of the teams at Ezytrac.
Step 4: Vet your tenants
This is a must. Don’t take anything a tenant says at face value. Check their employment history, their previous rental history, and their credit rating. Vet the tenant properly, and you will avoid the five types of tenant that all landlords should avoid.
Step 5: Remember these two words: Tenancy Agreement
Never, ever let your property without a comprehensive tenancy agreement that stipulates all the terms and conditions that apply to the tenancy:
- This will set out your tenant’s responsibilities as well as your own
- It is the most important document in the arrangement
- Don’t be tempted to use an ‘off-the-shelf’ version that can be bought from many high street stationers – landlord laws are constantly changing, and yours must be up to date
Step 6: Pay for landlord insurance
You may be the best driver in the world, but you still have car insurance. You ensure your own house and its contents. Don’t skimp on landlord insurance. It could cover you for damage to your property as well as unpaid rent. It’s worth every penny for the added peace of mind.
Step 7: Hire an investment property manager to manage your property for you
You weren’t expecting to become a landlord. You don’t need to take on all those day-to-day landlord responsibilities that will disrupt your life. There are seven benefits of hiring an investment property manager:
- You’re less likely to suffer from a tenant from hell
- Tenancy turnover rates are lower
- Void periods should be shorter
- Rent is more likely to be paid on time
- You can get on with your life
- Maintenance and repair bills are likely to be lower
- You should suffer fewer expensive legal issues
If you’re an accidental landlord and don’t know where to turn, call one of the Ezytrac team today on +44 01522 503 717. The sooner you do, the sooner you could benefit from rental income and effortless property management.
Live with passion,