Top Tips for New Landlords
High deposits and difficulties securing mortgages have resulted in a rise in ‘accidental landlords’, who, unable to sell or secure a decent price in the current climate, have decided to rent out their property instead. Combined with the effects of the continuing buy-to-let property boom, an increasing number of people are finding themselves in the position of being a landlord for the first time.
Becoming a landlord brings with it huge responsibility, requiring market knowledge, careful planning and frequent property maintenance. The best landlords consider the safety and well-being of tenants, whilst also keeping their own interests in mind. Our top tips help advise new landlords on important aspects to consider.
Keep the property clean and well maintained to impress prospective tenants.
Take the time to research the local rental market, and take note of what other landlords are charging and offering, to ensure you remain competitive and attract your target tenant. Attend Property Investor Networking meetings, where you can engage with experienced landlords, ask questions and absorb valuable knowledge.
Insure the property with a specialist landlord insurance provider. Total Landlord Insurance offers two distinct buy-to-let landlord insurance policies, Essential and Premier. For more information, and to discover which policy suits your specific needs, visit: Landlord Insurance Comparison.
Advertise through a property portal, online letting agent or traditional letting agent.
Letting agents reduce the workload by sourcing and credit referencing tenants; however they charge between 8-15 per cent of the rental income profit, so shop around for the best deal. Check that your lettings agent is covered by Client Money Protection Insurance. More information and advice can be found at CM Protect.
Be aware of recent legislation for landlords, for instance rules regarding Houses of Multiple Occupancy(HMO); and tenant deposit schemes required to safeguard tenants’ deposits within thirty days of receipt. my|deposits is a government-authorised tenancy deposit protection scheme designed to enable landlords and letting agents to take and hold a deposit for the duration of the tenancy.
Understand your obligations regarding gas safety and energy performance certificates; and keep up-to-date on fire and health and safety regulations.
If you have a mortgage, you will require written permission from your mortgage provider prior to letting the property to prevent breech of conditions. Those with a long leasehold will also need written consent from their freeholder.
It is crucial to choose the right tenant. Nightmare tenants can result in costly repairs, problems with neighbours, and in some cases, long drawn-out legal battles and evictions. Use qualifiers in for-rent advertising; specifying ‘no pets’ or ‘good credit required’ reduces the applicant screening process.
Ensure sufficient information is gathered, including employment and tenancy history, credit checks and valid references from employers and previous landlords. Interview prospective tenants, and consider investing in specialist tenant referencing, such as Total Tenant Referencing. Ask for a guarantor who will legally take responsibility for missed payments if the tenant experiences financial difficulties.
Maintain a good relationship with tenants, respecting their privacy and always notifying them prior to visits. Communicate with tenants regularly and keep copies of any correspondence. Happy tenants are more likely to pay on time, and less likely to cause damages at the end of the tenancy.
Inform your tenants that your landlord insurance does not cover their contents. They will need to take out their own tenant’s contents insurance policy.
Draw up a rental agreement, making sure all relevant details and terms are included, such as notice periods and dates, and methods of collection of rent. It should encompass your obligations for property repair, and what the tenant is responsible for fixing. Consider purchasing legal and rent guarantee insurance, which could save time and money in the long term, should any issues arise. Total Landlord Insurance offers comprehensive Rent Guarantee Insurance for peace of mind.
Safety and Maintenance
Gas safety checks must be carried out every twelve months by a CORGI registered engineer, with records kept for two years. Ensure fire and security alarms are in sound working order.
As a landlord, you are responsible for repairing or replacing items which naturally break through wear and tear, and maintaining the structure of the property.
Put electrical appliances and boilers under a service contract so that tenants can call an emergency engineer directly. Consider taking out a landlord emergency policy, allowing your tenant to contact a reputable contractor in the event of a domestic emergency. Landlord Emergency Cover from Total Landlord offers twenty-four hour protection 365 days a year.
Other helpful hints
• Invest in professional photographs for the property. These will attract better tenants and be useful time and again.
• Keep a detailed and accurate inventory, preferably including photographs; and note the condition of the property. Ensure the tenant signs the document and understands that money will be deducted from their deposit for any damages.
• Remember to submit a self-assessment tax return to HMRC detailing rental income. Keep receipts and claim for allowable expenses, such as accountancy, legal and other professional costs.
• Be realistic with rent expectations.
• Perform regular property inspections.
• Never hand over keys to the tenant until contracts are signed, references are checked, and you have received the deposit and first month’s rent. Always keep spare sets of keys to all doors and windows.
About the authorEddie Hooker has been involved in the insurance industry since 1985. He worked with many large insurers such as Legal & General and AXA Insurance prior to setting up his own insurance business, Hamilton Fraser, in 1996. Hamilton Fraser now employs over 130 staff out of their North London office, dealing with various insurance products for the buy-to-let property market such landlord insurance, rent guarantee insurance, emergency cover and tenancy deposit protection.
Eddie and Hamilton Fraser Insurance first started to provide landlord insurance as early as 1996 when they became involved with the Small Landlord Association, which later became the National Landlords Association.
By working closely with the industry’s leading companies Eddie and his team have built up a detailed understanding of the landlord market ensuring that the customer experience is founded on knowledge and support. This has been highlighted in a recent customer survey that found that 95% of Hamilton Fraser customers were either satisfied or more than satisfied with the service provided by the company.
View more posts by Eddie Hooker
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