How to Let a Property (Video)

As a landlord you want to know the best way to let a property. Being a landlord doesn’t need to be a minefield. Whether you let your property privately or through a letting agent, as a landlord there are a number of key steps you must follow to make sure you are protected.
  • You have a choice between using a letting agent and doing it all yourself – however, if you do choose to go it alone make sure you get support from organisations like the National Landlord’s Association
  • Make sure you have your mortgage lenders consent to rent your property, as you could be in breach of your terms and conditions
  • Get your insurance right – both in terms of Landlord Insurance and tenancy deposit protection through an authorised scheme like my|deposits

Transcription

An increasing number of people are letting out their properties - there are a number of reasons for this, including not being able to sell due to the state of the housing market, making the move as an investment opportunity, or inheriting a property. This makes you a landlord and there are a number of steps you must follow.

Step 1 - Do you need a letting agent?

You can let your property privately or you can use a letting agent. Letting agents will market your property for you, organise viewings, get references from your tenants and draw up a tenancy agreement for you. They can also manage the property and take care of any maintenance issues, dealing directly with the tenant on your behalf. They will also organise rent payments and of course levy their fee. It's a good idea to make sure the agent is a member of a recognised body - members of the Association of Residential Letting Agents, the National Association of Estate Agents and the Royal Institution of Chartered Surveyors are all bound by a strict code of conduct. If you choose not to use a letting agent, you must make sure that you do your research and turn to organisations such as the National Landlords Association for support and advice.

Step 2 - Furnishing your property.

It's important to know your market. Trips to Ikea may not be necessary for a property at the lower end of the market. Landlords should always search for the most cost effective options. However, if you're targeting professionals, neutral interiors such as white walls and laminate floors can have a significant impact on the rent you charge and your success in letting your property.

Step 3 - Your mortgage.

Get your mortgage lenders consent to let your property, otherwise you could be in breach of the terms and conditions of your home loan. If you want to keep your mortgage as it is so that you can rent out your property on a short term basis then a lot of lenders may allow you to do so. If you are planning to let out your property to buy another one however, you may experience greater barriers as you will be taking on 2 loans, regardless of the fact that you intend to have your tenants pay off 1 of them. If this is the case, you may need to take out a buy-to-let mortgage.

Step 4 - Get the right insurance.

It is important to have adequate insurance cover. Your regular house insurance will not suffice. Landlords insurance offers you specialist cover designed to protect you financially for a range of eventualities. As with home insurance, there are 2 types of landlords insurance - buildings and contents. Landlords building insurance helps to protect the actual bricks and mortar of your rental property from things like fire and flooding. If you have furnished the property you may also want to consider contents insurance. You can also take out rent guarantee insurance, another important component when letting your property.

Step 5 - How much rent to charge.

It's important to do your research and make sure that you pitch the rent that you're asking for at the right level. Websites such as findaproperty.com or rightmove.co.uk are a good place to start. If you are using a letting agent they will give you an estimate for the amount of rent you can expect to charge. Bear in mind that tenants may try to negotiate a lower price so if your mortgage payments are sizeable and your margins close, you need to be careful, and when the market is flooded with rental properties, be aware that just like house sale prices, rental prices can fall.

Step 6 - Tenancy deposit protection.

The law states that your tenant's deposit must be protected by a government-authorised tenancy deposit protection scheme such as MyDeposits.

"I've always gone fully managed so you'd have managing agents (letting agents) who would do the job for you - I would certainly get involved a lot more so I understood it even if I then had a letting agent do it because you're handing basically your property over to someone else, you expect it's all being done for you, and it's only after a year or maybe 18 months that something happens and you find it's not all being done for you".

"It's all very well having lots of people come and say yes they want your property but they've got to be the right one and it doesn't necessarily mean that they're not DSS - they could be DSS, they could be anybody and it's the kind of person they are and it's doing the background checks, making sure that they have the references in place. If they have lived somewhere before, go to that landlord and ask were they a good tenant?".

"The tenants and yourself is a working relationship - work with your tenants, treat it like a client but build up a good relationship, and there's give and take - work with the guys and you'll get a much more successful tenancy as a result of it".