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How to Become a Landlord – The Complete Guide [2023/24]

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    Learn More About Becoming a Landlord

    Being a landlord is no doubt an attractive option for many. For some, it’s a way to earn some extra income alongside working a full-time career, while for others, becoming a landlord can be a career in itself.

    If you’re just starting out, there’s certainly a lot to think about on how to become a landlord, which is why reading up on tips for becoming a landlord is so essential.

    If you’re looking for tips on becoming a landlord in the UK, then this in-depth guide with 12 helpful tips on what to know about being a landlord is for you.

    Here, you’ll find advice on all things to know about being a landlord, including any financial and legal requirements to be a landlord and advice on how to get the most out of your venture.

    If this all sounds useful, be sure to keep reading our guide to being a landlord.

    What you’ll find in this guide to being a landlord: 

    • Information on the costs and taxes involved with becoming a landlord in the UK.
    • Tips on how to become a landlord successfully by selecting the right property.
    • Insight on how to be a landlord without managing the property yourself.
    • Details on how to conduct due diligence when becoming a landlord.

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      1. Understand What Being a Landlord Means

      Before you begin any new project or investment, you need to fully understand what’s involved.

      Before you start exploring how to become a landlord, there are a few things to keep in mind.

      One of the most important things to understand is that to succeed, you should think of being a landlord as a business venture.

      When you become a landlord, you make regular income, pay taxes, and have expenses and responsibilities. Just like you would with any other business.

      You need to be aware of the rules you should stick to and the research that must be done to make your business venture as a landlord successful.

      Spend as much time as possible reading up on landlord duties, costs, and potential income. Basically, before you get started, you need to fully understand what being a landlord entails.

      You need to realise that being a landlord isn’t as simple as it may sometimes seem, and the more prepared you are, the higher the likelihood that your landlord venture will be profitable.

      So what exactly is a landlord? What do landlords need to know before they get started? And how do you register as a landlord? We’ll cover all the essentials of being a landlord in the first of our tips.

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      Becoming a Landlord: Things to Know

      The landlord of a property is the person who owns a property that is being rented out to a tenant or multiple tenants.

      A landlord may have either purchased a property for the sole purpose of renting it out, which is referred to as buy to let, or they could have already owned the property they’re letting out.

      If you want to find out who the landlord of a property is, you would need to be a tenant of the property.

      Tenants can request these details from the letting agent of the property or the person managing the property if this isn’t the landlord.

      Registering as a landlord is a simple process. Once you have your property ready for tenancy, you can sign up using your local landlord registration services.

      If you live in England, it may not be compulsory for you to register, depending on the area your property is based in. Landlords in Wales, Scotland, and Northern Ireland, however, are required to register by law.

      There are some circumstances in which you may not be able to rent out property as a landlord.

      This applies to those who are planning on renting out a house or flat that they already pay for with the help of a residential mortgage.

      Landlords can only use a buy-to-let mortgage for rental properties, so you would need to make the switch from residential.

      Another circumstance that could prevent you from being a landlord is if you own a property through a shared ownership scheme, in which case you would need to speak to all parties involved, including the housing association, to find out what you can do.

      Becoming a landlord isn’t always an easy ride. While buy-to-let investment is undoubtedly one of the best ways to invest your money and build wealth, there are still some risks involved with being a landlord and owning a rental property.

      One of the most common risks of being a landlord is experiencing void periods wherein your property is left without a tenant for an extended period, causing you to lose rental income.

      Other risks include property market fluctuations lowering the rental value or price value of your property. Of course, with the proper research, insight, and planning, you can minimise the chances of encountering these risks with your landlord venture.

      We’ll cover some essential tips on how to increase your chances of success throughout this guide to becoming a landlord in the UK.

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      2. Know Your Rights as a Landlord

      Sometimes becoming a landlord isn’t all smooth sailing, and you may need to take certain action to protect yourself and your property.

      This is where your rights as a landlord come in. There are several landlord rights for UK-based landlords to be aware of.

      These rights revolve around ensuring your tenant is abiding by the rules set out in their tenancy agreement, as breaking these may cause you to lose income. If the tenant breaks the contract before the term is over, the landlord has the right to collect the rent for the term.

      The Right to Have Your Rent Paid

      One of the most important landlord rights in the UK is the right to have your rent paid. If a tenant doesn’t pay their rent by at least eight weeks, you can send written requests to both the tenant and their guarantor if they have one.

      If the tenant still refuses to pay, you have the right to take further action to claim possession of your property under the 1988 Housing Act.

      Access to the Property

      As a landlord, you will only have the right to access your rental property after giving the tenant at least 24 hours’ notice.

      Vice versa, if your tenant decides they no longer want to live in the property, you have the right to receive an agreed amount of notice from your tenant, depending on the contract.

      Evicting Tenants

      Being a landlord also means you have the right to request that a tenant leave the property.

      Reasons for evicting tenants can involve the tenant not having paid their rent or breaking their tenancy agreement in some way, such as antisocial behaviour and causing disruptions to neighbours.

      If you want to evict your tenant from the property, you need to give them at least two months’ notice. It is usually best to seek advice from experts such as the National Landlords Association to ensure you’re complying with all the legal measures of this process.

      What Support Is Available to Landlords?

      Landlord associations provide support to landlords in the UK. Examples include the National Landlords Association (NLA), the UK’s largest landlord organisation, which you’ll need to pay a membership fee to join, and the British Landlord Association, which is free to join.

      Perks of joining a landlord association include having access to online forums and networking events to meet other landlords, access to training events, advice from other professionals, and more.

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        3. Understand UK Landlord Responsibilities

        One of the most essential things to research if you’re looking into how to become a landlord is to get to grips with your legal responsibilities.

        There are many legal requirements for letting a property that landlords need to adhere to. From safety to tenant rights, here are the most crucial landlord legal requirements to know about.

        Every landlord wants to keep their tenants safe at all times. This is why it goes without saying that one of the most essential requirements to be a landlord is to carry out all the necessary safety checks.

        Fire Safety

        One of the most crucial safety requirements to think about is fire safety. Whether you’re an experienced or first-time landlord, complying with fire safety laws should be at the top of the landlord checklist for UK investors.

        You need to ensure that the property features a smoke alarm (one on each floor if you’re renting out a house).

        There should also be a carbon monoxide alarm in rooms featuring a solid fuel-burning appliance, such as a coal fire or wood-burning stove.

        Also, landlords need to provide adequate fire escape routes in the building and be mindful of furniture and furnishings used in the property. Any furnishings and furniture provided should be classified as ‘fire-safe.’

        Further rules apply if you’re renting out a home in the form of an HMO (House of Multiple Occupancy). In this case, it’s necessary to provide a fire extinguisher within the property along with a fire alarm.

        Gas and Electrical Safety

        Along with fire safety, other requirements when renting out property include gas and electrical safety.

        Any gas equipment in the property needs to be fitted by a registered gas safe engineer who will continue to maintain the equipment by performing gas safety checks each year. The landlord should ensure that gas safety certificates are kept up to date.

        UK landlords renting out a house or apartment also need to make sure that the electric system within the property is up to standard.

        New laws announced in Spring 2021 mean that all rental properties in England require an electrical safety inspection every five years.

        Known as an electrical installation condition report or EICR, these checks will indicate whether a property is safe for the tenant to live in. Any landlords that fail to comply with this law now face a fine of up to £30,000.

        On top of making sure your property is safe for your tenant to live in, another one of the most essential requirements to be a landlord in the UK is to stay on top of energy efficiency.

        Before renting out a property to tenants, you need to obtain an energy performance certificate, otherwise known as an EPC.

        This certificate will let your tenant know how energy efficient the rental property is.

        The standard energy efficiency rating all UK rental properties must meet is an EPC rating of E.

        By investing in certain properties, such as new build developments, there’s naturally higher energy efficiency.

        Figures show that new builds require around 20% less energy to heat due to being constructed to a higher standard and offering better insulation. If you fail to adhere to landlord legal requirements on energy efficiency, you face fines of up to £5,000.

        Some landlords may be required to obtain a license to rent out property. The only type of property in which a landlord license is mandatory around the UK is Houses of Multiple Occupancy.

        However, the rules differ depending on the location of the property you’ve purchased. In some areas, landlords of any property type require a license.

        The best way to determine whether this is another of the legal requirements for letting a property in your area is to check your local council’s website.

        All UK landlords must carry out ‘right to rent’ checks. These checks are required for any new tenancy agreement and involve checking that your tenants have the legal right to rent property in the UK.

        If you choose to use a letting agent to help you with your venture, they will generally conduct these right-to-rent checks.

        If you’re renting out an HMO property (a house in multiple occupation), you’ll need to check with your local council to find out whether you need a license.

        For large HMOs, licenses are mandatory. A large HMO is classed as a property that houses five or more people from more than one household.

        Appliance maintenance is another thing that you should consider if you want to become a landlord. Those who choose to offer their rental property with furniture and appliances will need to keep them in good condition.

        This might mean hiring tradespeople to come out to your property and repair items like white goods. Again, if you decide to hire a letting agent, this is something they would typically deal with on your behalf.

        Another example of the biggest landlord responsibilities in the UK is to make sure your property is fit for human habitation.

        This may seem obvious, but it is vital to consider before renting out a flat or house.

        This means ensuring the building itself is stable, there are no damp or ventilation issues, there’s plenty of natural light, and there’s no problem with water supply or water drainage.

        For a full breakdown of the 29 hazards you must consider, look at the 2005 Housing Health and Safety (England) Regulations.

        We’ve learned about the rights you have as a landlord, but what about tenant rights?

        Whether or not you’re opting for a hands-on or hands-off landlord journey, it’s crucial to understand the rights of any tenant renting your property.  This applies when finding a new tenant for your property as well as when you have tenants in situ, which is when you buy a home already being rented out.

        One of the most well-known tenant rights is the ‘right to rent’. This is a check that landlords need to do to ensure their tenant is legally allowed to rent property in the UK.

        You need to check all new tenants over the age of 18, as it’s against the law to only check certain tenants. The only exception to this rule is renting out student accommodation, a care home, social housing, a mobile home, a hospital or hospice, or a hostel or refuge.

        All tenancy agreements must comply with the law and be fair. Tenants in the UK hold the right to live in a property that is safe and in good condition. They should be able to live in the property undisturbed, be protected from unfair eviction and unfair rent, and be able to know who their landlord is.

        Tenants also have the right to challenge excessively high charges that they disagree with. They have the right to have their security deposit returned at the end of tenancy, provided they don’t break any agreements put in place.

        Pets

        Tenants now have more rights regarding keeping pets in their rental property. In recently announced laws, landlords are now no longer allowed to automatically ban tenants from having pets in their property.

        These new guidelines were announced in February 2021 and mean that consent for pets will be the default position. If a landlord objects to their tenant keeping a pet in their rental property, they must state this objection in writing within 28 days of their tenant’s request, and they must have a valid reason.

        The Right to Safety

        Tenants have the right to be safe within their homes. All safety checks such as gas and electrical safety checks should be carried out before a tenant moves in, and any issues should be responded to promptly.

        The property should be in a good state of repair, and any structural issues that could be hazardous to health, such as mould and damp, should be dealt with.

        Tenant’s Deposit Retrieval

        Tenants have the right to have their security deposit returned at the end of tenancy, provided they don’t break any agreements put in place.

        The Right to Privacy

        Tenants have the right to privacy within their rental home and should be able to live in the property undisturbed.

        As a landlord, you will only have the right to access your rental property after giving the tenant at least 24 hours’ notice.

        Protection From Unfair Rent and Eviction

        If a tenant believes they are unfairly evicted from the property, they can dispute this and take legal action.

        Illegal eviction can apply if the landlord hasn’t offered the tenant the correct notice period as agreed, they change the locks without the tenant’s knowledge or consent, or they are evicted without a court order.

        What Paperwork Will I Need to Provide?

        When you become a landlord in the UK, you’ll need to provide the following paperwork and documents.

        • Energy performance certificate (EPC).
        • Gas certificate.
        • Tenancy agreement.
        • HMO license (if you’re renting out an HMO).
        • A list of inventory if your flat is furnished.

        What is a Tenancy Deposit and Why Do I Need One?

        A tenancy deposit is a deposit paid by a new tenant in your rental property. This requires the tenant to pay a sum of money at the start of their tenancy, which the landlord is then required to put into a deposit protection scheme.

        At the end of the tenancy, the tenant gets their deposit back in full as long as they meet the terms of their tenancy agreement.

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        4. Learn About Buy to Let

        For some people, being a landlord is something unplanned that has happened by chance. Many landlords end up inheriting properties from loved ones and choose to rent the property out rather than live in it themselves. 

        However, for many landlords, becoming a landlord is a pre-planned business strategy that serves more so as an investment.  

        Thats where buy-to-let property investment comes in. If you don’t already own the property you plan to let out to tenants, you’ll need to be clued up on buy-to-let.  

        What is a Buy-to-Let Landlord?

        So what is buy-to-let investment, and what is a buy-to-let landlord? 

        Buy to let is a term used to describe a property that has been purchased by an investor who plans to let the property out and generate income.  

        A buy-to-let landlord has chosen to buy a property solely to rent it out and generate income. 

        If you’re thinking of becoming a buy-to-let landlord in the UK, you should understand what makes a buy-to-let venture successful before you get started. 

        Is Buy-to-Let a Good Investment?

        If youre looking to become a landlord, youll want to be sure that youre making a good choice by investing in buy-to-let property 

        The good news is that buy-to-let is an excellent investment with a lot of earning potential. Those who invest in buy-to-let property can earn regular rental income on top of capital growth returns when they sell the property.  

        What Are the Different Types of Buy-to-Let Property?

        When you purchase a buy-to-let property, there are different types of buy-to-let investment you can choose from. The three most common types of buy-to-let purchase are as follows. 

        • Traditional residential buy-to-let, which is when you buy a house or apartment and rent it out to tenants such as young professionals, families, or retirees.  
        • Student buy-to-let, which is when you buy a property that is purpose-built for student tenants. 
        • HMO investments, otherwise known as Houses of Multiple Occupancy, which is when an investor buys a house with the intention of renting it out to multiple tenants from different households. 

        The type of buy-to-let property you choose should align with your goals, budget, and the kind of tenant you hope to attract. Read our buy-to-let guide for more information on the different strategies available.  

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          How Much Money Can You Make With Buy to Let?

          The amount of money you can make through being a buy-to-let landlord depends on the property you rent out, its area, and the amount you end up paying in taxes and other costs.  

          Be sure to focus on high rental yields, strong capital growth predictions, and high tenant demand if you want to make as much money as possible through buy to let. 

          What is a Rental Yield and What is Capital Growth?

          Rental yields are something that buy-to-let investors focus on when selecting an investment. A rental yield represents how much rental income an investor can expect to receive. The higher the rental yield is, the more rental income you can expect from renting out your property.  

          Capital growth is when a property increases in value over time, allowing the investor to sell it for a higher price than they originally purchased it at.  

          What About if You’re Renting Out a Property You Already Own?

          There are certain situations in which investing in a buy-to-let property isn’t necessary to become a landlord.  

          A common example of this is an inherited property that has been passed down from a relative.  

          This way, the landlord already owns the property in full, and can begin renting it out once they’ve met all necessary legal requirements to be a landlord and ensured that the property is in a fit state for tenancy. 

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          5. Find the Perfect Property

          Unless you already own the property you’re planning on renting out to tenants, another rule on how to become a landlord is to find the right property.  

          The property you choose plays a big part in the overall success of your venture. Your property and area can mean the difference between high demand and strong yields versus void periods and low returns. 

          By doing research and taking the right steps when looking for your investment property, you give yourself a better chance of making high returns and securing desirable tenants. 

          On the other hand, if you’re thinking of renting out a property you already own, don’t worry too much. There are other ways you can make your property more successful which well cover in this section of our guide to becoming a landlord. 

          Research Different Buy-to-Let Areas

          One of the most important tips for landlords buying a property is researching the best buy-to-let areas.  

          In the UK, certain areas will have more to offer than others. The two requirements which are crucial to focus on when looking for the best investment areas are rental yields and capital growth.  

          Areas with high rental yields will ensure being a landlord is profitable, thanks to regular returns that come with renting out a property. Whereas capital growth represents the returns you will make on your investment if the property has grown in value by the time you come to sell it. 

          What are the Best Buy to Let Areas in the UK?

          If you’re renting out a property to become a landlord in the UK, the best areas to focus on are those up North.  

          Compared to Southern regions in the UK, areas like the North West offer some fantastic potential for those renting out a house or flat.  

          Home to top property hotspot cities Liverpool and Manchester, the North West is definitely a UK area worth exploring before purchasing a new buy-to-let property. 

          Property prices in the North West are expected to increase by 28.8% by 2025, which is a significant rise compared to the UK’s predicted growth of 21.1%.  

          This means that purchasing a buy-to-let property in the North West is one of the best tips for becoming a landlord if you focus on capital appreciation. 

          For those seeking high rental returns, investing in areas like Liverpool is also a great piece of landlord advice since rental yields in many Liverpool postcodes are ranked some of the best in the country.  

          L1, for instance, is said to boast 10% yields making it the most lucrative buy-to-let postcode in the UK, according to Totally Money.  

          This shows that if you want to know how to become a landlord in the most profitable way possible, researching the top UK areas is essential. 

          Think About What Will Appeal to Your Tenant

          While the city the property is based in is important, this isn’t the only thing that people becoming a landlord need to think about.  

          There are other ways to make your property stand out and boost your chances of a successful landlord journey, and creating a tenant profile is a good place to start.  

          By getting a good idea of the type of tenants you hope to attract to your rental property, you make it more likely that you’ll see high demand and potentially be able to benefit from a higher rental value. 

          In the UK, young professionals are the most popular type of tenant that landlords rent out a property to.  

          This is because renting is more common for this tenant type, as they may not be financially ready to buy a house of their own yet or prefer the increased freedom from renting.  

          If young professionals are the tenant group you plan to target with your rental property, you should aim to make your property as appealing as possible to these types of renters 

          So what is the best landlord advice for selecting a property that’s going to appeal to tenants? 

          If you’re looking for a buy-to-let property and want to make sure your investment appeals to young professionals, you should focus on centrally located new-build apartments.  

          Renters who work in the city centre are more likely to want to live in proximity to their workplace and have access to all of the city’s top attractions, bars, restaurants, and shops. 

          New landlords who want plenty of demand and high yields should seek out modern and stylish developments based in and around the city centre.  

          If, on the other hand, you plan on renting out your home to another tenant type, such as a young family, you would need to focus on different qualities.  

          This would require purchasing a buy-to-let property based near schools and transport links and focusing on houses rather than apartments.  

          Keep in mind that if this is the route you hope to take, you may find that your yield is lower depending on the area you invest in, as apartments tend to be cheaper to buy while often having a similar rental value to houses. 

          Think of Ways to Add Rental Value

          For soon-to-be UK landlords who already own the property they plan on renting out, you should focus on making the property as appealing as possible.  

          This is something to also keep in mind if youre a buy-to-let investor planning on buying a property that needs refurbishment before it can be rented out. 

          If the property you own or will own is outdated, be sure to spend time and money refurbishing it to a high standard.  

          Properties with up-to-date décor and features boast a higher rental value and are more likely to see lots of enquiries from interested tenants. If you have the budget to do so, think of different ways to add value.  

          This could mean adding a conservatory or extension to the property, fitting a new luxury kitchen and bathroom, and transforming a yard or balcony into a beautiful outdoor space. 

          How Has Covid-19 Changed the Rental Market?

          The Covid-19 pandemic has changed the UK rental market by encouraging a rise in demand for certain properties and properties with certain facilities. 

          Rental properties with a garden or balcony have risen in popularity over the past year due to the pandemic and the national lockdowns that resulted. Renters now want a space to spend time outdoors, and properties that can offer this are in high demand.  

          With more people now working remotely, rental properties with a home office or space for a desk area are much more desirable than in the past. Properties offering high-speed internet access are also being favoured for this same reason. 

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            6. Use Due Diligence When Investing

            Once you’ve decided what kind of property you plan to invest in, one of the next most crucial tips for becoming a landlord is to use due diligence before making a purchase.  

            Due diligence is a research process where buyers must look into the company selling the property and the property developer creating it.  

            Doing due diligence is essential before buying a rental property, especially for new landlords, as it ensures you’re not putting your money at risk. 

            Look for Online Reviews

            Reviews are a useful tool when researching any company. When making such a huge purchase as a buy-to-let property, they become even more essential.  

            As part of your due diligence when becoming a landlord, UK investors should look online for client reviews.  

            This means looking for reviews from both the property investment company where the opportunity is listed and the property developer who has created or is creating the development.  

            Here at RWinvest, we believe that customer satisfaction is key, which is why you’ll find so many four or five-star reviews from past clients on our Trustpilot and Google Reviews page.  

            If a company has lots of negative reviews, all with similar themes, this is a sign that you may need to be more cautious before purchasing a rental property. 

            Look for Positive Press

            Another of the most important landlord tips when carrying out due diligence is to look online for positive press, which mentions the property investment company and development company behind the property. 

            Established companies will normally have several mentions from publications online, covering things like new project launches, new awards and accolades, and any other interesting details.  

            The more press you see, the more experienced and successful they’re likely to be. 

            Trust Your Own Judgement

            Sometimes you can sense whether or not to work with a company based on your own first impressions.  

            You may not feel happy with your initial phone call with the property company, or you could feel that the development company doesn’t have a large enough portfolio of successful projects.  

            If you’re not sure whether this is the right opportunity for you, you should carry out as much research as you can before deciding whether this is the company you want to use to become a landlord. 

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              7. Consider How You Will Finance Your Venture

              If you’re planning on purchasing a buy-to-let property to become a landlord, you’ll need to think about possible finance options.  

              While having the necessary lump sum of money available to buy a suitable property would be ideal, this isn’t realistic for most landlords. That’s why arranging some financial help is crucial. 

              Explore Buy-to-Let Mortgages

              Buy-to-let mortgages are the most popular option for those who want to know how to become a landlord without having the full amount of money needed for a property purchase.  

              When buying a rental property, a buy-to-let mortgage works in the same way as a regular mortgage. Youll put down a deposit to pay off a chunk of your property price and then stay on top of regular mortgage repayments 

              The most significant difference between buy-to-let mortgages and traditional mortgages are buy-to-let mortgages require a larger deposit.  

              To obtain a buy-to-let mortgage, you need to pay a deposit of at least 25% of the total property price.  

              You also need to earn a salary of at least £25,000 a year, and you should also already own your own home, whether or not this is with the help of a traditional mortgage.

              Consider Payment Plans

              If you don’t fit the criteria for a buy-to-let mortgage and wonder how you become a landlord without a large budget, you can always look at ways to split up payment costs.  

              Many properties, particularly those at RWinvest, come with a payment plan option that lets you pay a percentage of the property price in different stages. 

              This way, you can secure the property and then pay the rest of it off at a later date when you may be able to part with the funds more comfortably. 

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              8. Learn About the Costs Involved

              Alongside the cost of repaying a buy-to-let mortgage, there are additional costs of being a landlord for UK investors to think about.

              If you want to become a landlord, you also need to budget for the following taxes and fees that professional landlords and property investors must pay.

              Maintenance costs are something that everyone who owns a property will be familiar with. Whether it’s a leaky pipe or faulty boiler, it can feel like there’s always something to take care of – sometimes accompanied by a hefty bill.

              Taking care of any maintenance issues is one of the extra costs of being a landlord, and this should always be included in the budget of those planning to become a landlord.

              There are ways to try and cut maintenance costs for your property. One of the most valuable tips for landlords who don’t yet own the property they intend to sell is to look for an off-plan buy to let property.

              These properties are still in the planning or construction stage, making them entirely new when they’re ready for tenancy.

              Because they’re new and up to date, there’s less likelihood of off-plan properties requiring regular maintenance.

              These properties tend to be fitted with state-of-the-art fixtures and finished to the highest standard, lowering these added costs that come from renting out property.

              As a rule of thumb, it’s recommended to budget around £250 a year for possible property maintenance.

              Like maintenance costs, refurbishment is another possible cost of being a landlord that you may encounter.

              This only really applies to properties that need refurbishment and not off-plan new build properties.

              However, after you’ve owned a tenanted new build property for a few years, you may still need to explore this option. After a few years, some aspects of the property may start to look worn down and need a refreshing.

              The amount it will cost to refurbish your property depends on the state it’s in before tenancy and the level of work you plan to do on the property every few years.

              If you purchase a property as a complete property development project, the property will likely need thousands of pounds worth of redevelopment.

              However, most properties won’t need much money spent on them before they’re up to scratch.

              Usually, around £1,000 to £2,000 is enough to cover any possible refurbishment costs over five years. However, you should base this on your personal circumstances.

              Landlord insurance should be considered by anyone wondering how to be a landlord safely and effectively.

              There are several types of insurance that are taken out by those looking to become a landlord, including building insurance, contents insurance, rental protection insurance, liability insurance, and unoccupied property cover.

              Building insurance is possibly the most essential type of cover on the list. With this, the building itself is covered if you encounter any damage.

              It’s a good idea to take out landlord insurance and, if you have a mortgage, your lender will usually expect you to do so.

              You can get different levels of insurance – for instance, cover for the building and cover for your contents if the property is furnished.

              Costs will vary depending on where the property is, what kind of property it is, and the level of cover you want. Find out more in our guide to landlord insurance.

              This extra cost applies to those using a lettings agency to help run their property.

              Whether this involves simply finding tenants and collecting rent, or completely managing the property for you, you should consider whether this is something you want to incorporate into your landlord budget.

              The amount you may spend on letting agent and property management fees depends on the charge incurred by the particular agency you choose.

              To enquire about property management services for our own buy to let opportunities, please contact us for more details.

              Void periods are an unfortunate and sometimes unavoidable part of being a landlord. While a void period is more of a loss of income than a fee, it’s still something that every first-time landlord needs to keep in mind when planning a strategy and budget.

              A void period is when a property is not tenanted, which stops the landlord from generating income from rental payments.

              Before renting out a property, it’s important to think about the likelihood of void periods. Like many aspects of becoming a landlord, void periods are less likely if you do the right level of research beforehand.

              Researching the best UK areas is crucial if you hope to avoid losing income. This will allow you to identify areas where rental properties are highly in demand.

              Manchester is a prime city to focus on if you want to steer clear of void periods, generating plenty of rental demand from young professionals and students.

              Along with the city itself, you should also think about the part of the city your property is based in. New build properties in the city centre, for instance, tend to attract lots of demand from tenants.

              Landlords are required to pay tax on their rental income. The amount of rental income tax you pay depends on your personal circumstances and the amount you earn.

              Income from rent is taxed at the same rate as any other income you receive from your day-to-day job or other businesses. Currently, basic rate taxpayers will pay 20% tax on rental income, while higher rate taxpayers will pay 40%, and additional rate taxpayers will pay 45%.

              Find out more about income tax on rental properties in our guide to buy-to-let taxes.

              If you choose to purchase a leasehold property for your landlord venture, you’ll need to pay a ground rent fee.

              Ground rent is payable on leasehold properties, and goes towards the upkeep of the properties grounds, gardens, and communal areas. This fee is paid to the leaseholder of the property.

              When you buy a property, you need to pay a tax called stamp duty land tax.

              For buy to let investors or those purchasing a second residence, stamp duty tax is normally 3% of the property price on purchases of up to £250,000, 8% on purchases between £250,001 – £925,000, 13% on properties that are priced £925,001 – £1,500,000, and 15% on properties priced £1,500,001 +.

              While it may seem that if renting a property out to family you wouldn’t need landlord insurance, this isn’t correct.

              You still need to get all the necessary insurance for your property, even if you’re renting it out to a family member or somebody you knew before the beginning of the tenancy.

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                9. Calculate Your Possible Income

                If you’re looking for information on how to become a landlord, it’s likely that you’re hoping to do so in the most lucrative way possible.

                This is where working out your possible income from being a landlord comes in. This is crucial to think about, especially if you use a buy-to-let mortgage to help fund your investment.

                Without knowing how much you could potentially earn from renting your property, you put yourself at risk of actually losing money.

                How Much Do Landlords Make?

                The amount that landlords make from letting out a property varies. Findings from a Private Landlords Survey in 2019 showed that UK landlords earn around £15,000 on average per year before tax.

                Of course, this figure is only an estimated landlord salary based on averages.

                The amount you can make from being a landlord will depend on the rental value of the particular property you plan to rent out.

                If you own or buy a property in an area where rental prices are high, you can expect to make higher returns from letting out your home.

                This is why rental yields in Liverpool are so impressive, as the cost of rent in this city is high compared to the purchase price of properties.

                Rental properties in Liverpool, and most UK cities, tend to be higher in rental costs when they’re based in the city centre.

                This is because young professional tenants – one of the most desirable tenant groups – are more likely to want to live somewhere central and close to their workplace.

                According to Zoopla, the average asking rent for property in Liverpool city centre is £894, while Manchester city centre’s average is £1,172.

                The other way that landlords make money is through capital growth returns when they sell the property.

                Figures from a 2019 study by Hamptons International revealed that landlords who chose to sell their property in 2018 made an average profit of £79,770 in capital gains.

                Researching areas where property prices are rising at the fastest rate is one of the most essential tips for landlords who want to make large returns in this way.

                Setting Rental Costs

                If you’re investing in property privately and without the help of a property investment company, you’ll need to set your rental costs.

                When setting rental costs, you need to research the local area that your property is based in and look at the current average rental price for similar properties in that area.

                Zoopla is a great tool for this. Their UK area guide provides the latest average rental costs for different property types in specific postcode areas.

                Make sure whatever amount you set as your rental income leaves you with enough money to use as income after paying any mortgage repayments, maintenance costs, and other fees.

                Work Out Your Rental Yield

                When you buy property through a property investment company, you’ll normally be provided with your rental yield. At RWinvest, we offer assured rental yields for a set period, so that investors know exactly what kind of rental income they can expect.

                If you need to work out your own rental yield, you can do so with the sum below.

                • Take your expected monthly rental income and multiply it by 12.
                • Divide this figure by the purchase price of the property.
                • Then multiply this figure by 100 for your percentage.

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                  10. Decide Between a Hands-On Vs a Hands Off Venture

                  A lot of people choose to become a landlord alongside their day-to-day career.

                  If working in a 9 to 5 job, with other commitments to take care of, such as socialising and taking care of family, it can be difficult to successfully manage a rental property at the same time.

                  This is why so many people choose to hire a property management company to help them take care of the day-to-day duties involved with being a landlord in the UK.

                  This is a popular strategy for first-time landlords who lack experience in the field.

                  If you don’t have experience being a landlord, you may stumble across some issues regarding tenant requests, sourcing the right tenants, and responding to any property-related matters.

                  It’s important to provide your tenant with good service throughout their tenancy, taking care of any queries or issues promptly.

                  If a tenant isn’t happy with you as a landlord, they may choose to vacate the property and look to rent elsewhere, leaving you with void periods.

                  If you’re unsure whether you would like to manage the property yourself, known as a hands-on investment, or have a hands-off investment where a property management company is used, a good piece of landlord advice is to weigh up the pros and cons of each method.

                  Pros of Using a Property Management Company

                  • You’ll have more free time. While a property management company takes care of your property for you and carries out all the necessary landlord duties, you have more time to attend to other commitments in your life, while still generating a regular income.
                  • A property management company has more experience in properly dealing with tenants. If you’re a first-time landlord, you may not know the right way to respond to certain queries or issues. This can keep tenants happy and ensure they stay in your property for a longer period of time.
                  • They have the right connections and resources to find you the most desirable tenants. They’ll also have a detailed screening process in place to ensure you find a suitable tenant for your property.
                  • They’ll be able to identify the current market rate of your property, which will ensure you’re able to get the highest rental payments possible.

                  Cons of Using a Property Management Company

                  • Paying a property management company will add to your list of landlord fees as a UK landlord. If you don’t own a rental property with a high yield, this could leave you with little income after your outgoings have been paid.
                  • If you hope to learn more about being a landlord and experience first-hand all of the legal requirements for letting a property and dealing with tenants, a hands-on experience would be better for you.

                  What is a Tenancy Agreement?

                  A tenancy agreement is a legal document that sets out what’s expected from both the tenant and the landlord throughout a tenancy.

                  If you’re a first-time landlord and you don’t have a lot of experience with writing up legal paperwork, your letting agent/property manager can assist you in drafting up your tenancy agreement.

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                    11. Find and Reference Tenants

                    Once you’ve learned all the key UK landlord responsibilities, have looked at ways to finance your investment, and thought about finding the perfect property to make your landlord venture as successful as possible, you need to search for prospective tenants.

                    By taking all the right steps and carrying out tenant referencing, you’ll be on the right track for a happy tenancy for both parties.

                    Marketing is Key

                    If you use a letting agent or property manager to help you with landlord duties, it’s unlikely you would need to be involved in marketing your rental property.

                    However, it doesn’t hurt to learn about the best landlord tips on how to properly market your property to tenants.

                    For most tenants, the photographs they see will be the first impression they’ll have of your rental property.

                    This is why it’s vital to make the images as sharp and clear as possible while taking them from angles that show the property off in the best light.

                    When it comes to listings, lettings agents will normally list your property on sites like Zoopla and Rightmove, but there are other ways to promote your property too.

                    Many private landlords in the UK opt to advertise their property in newspaper ads, on smaller property portals, on message boards like Gumtree, and through social media.

                    Get the Property Ready for Viewings

                    Once you’ve generated some tenant interest, you need to get the property ready for viewings.

                    This means making sure everywhere is clean and tidy, blinds and curtains are drawn to let in lots of natural light, and ensuring the space looks as inviting as possible.

                    If you’re renting a house out privately, it’s up to you how you want to hold tenant viewings. You can either host an ‘open house’ where prospective tenants can come and go or arrange one-on-one viewings.

                    Doing viewings one-on-one is usually a good choice. This gives more of a chance to speak directly to interested tenants and lets you or the letting agent find out more about them.

                    Completing Background Checks

                    Experienced lettings agents/property management companies will identify the best tenants and carry out in-depth background checks.

                    If you’re renting your property privately, you can use a background check tool offered by the National Residential Landlords Association.

                    It’s possible to get certain details from the tenant directly, including career and financial information such as their job title, salary, lifestyle habits such as smoking, and people you can contact for a character reference.

                    When researching a prospective tenant, other things to look out for include their credit history, current debts, criminal records, and past tenancy evictions.

                    If any references come back positive and nothing gets flagged up during checks, you’ll have the green light to begin renting your property out to your first-ever tenant.

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                    12. Choose Between Furnished or Unfurnished

                    Once you’ve established the type of property you’re going to rent out to tenants, another of the most important tips on becoming a landlord is deciding whether or not you plan to rent your property out with or without furniture.

                    This may seem like a small part of the big picture, but making the right decision can dictate how popular your property is in tenant demand.

                    As discussed in point number 9, certain tenants want certain qualities from their rental property. In the case of furnished vs unfurnished properties, young professionals and students are more likely to seek out a property that is furnished.

                    On the other hand, tenants such as families or retirees may prefer an unfurnished property to style it with their own furniture. This is another reason why establishing your ideal target tenant is such a good piece of landlord advice.

                    If you do decide to offer your rental property furnished, you should aim to include furniture pieces that are as modern as possible to try and appeal to a wide range of tenants.

                    If a property contains furniture that’s old and outdated, a tenant may avoid renting your property as they would have to deal with storing the existing furniture elsewhere while they fill the property with their own pieces.

                    This is why more minimal-looking furniture works so well when renting out a property.

                    For landlords who choose not to furnish their rental property, there are certain items you should still aim to provide.

                    Even if a property is unfurnished, tenants will typically still expect white goods to be supplied. This includes appliances like a fridge, freezer, and washing machine.

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                    Becoming a Landlord Checklist 

                    Now that you’ve read all of our tips for becoming a landlord keep the following checklist in mind before renting out a property for the first time in the UK:

                    • Understand What Being a Landlord Means 
                    • Know Your Rights as a Landlord
                    • Understand UK Landlord Responsibilities
                    • Learn About Buy to Let
                    • Find the Perfect Property
                    • Use Due Diligence When Investing
                    • Consider How You Will Finance Your Venture
                    • Learn About the Costs Involved
                    • Calculate Your Possible Income
                    • Decide Between a Hands-On Vs a Hands-Off Venture
                    • Find and Reference Tenants
                    • Choose Between Furnished or Unfurnished

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                    Ready to Start Renting Out a Property?

                    If this guide to how to become a landlord has been helpful to you and you’re now feeling ready to begin renting out property, get started by contacting RWinvest today.

                    We have a range of buy-to-let properties in key cities like Liverpool and Manchester, ensuring our clients access the best possible yields and capital growth returns.

                    We also work with some of the UK’s leading property management companies and can offer investors everything they need to help their landlord journey go smoothly.

                    To explore our available opportunities, get in touch or check out our UK property investments page.

                    If you enjoyed our guide to being a landlord and want to read more great content, head to our buy to let news page for further reading. Here, you can find more blogs and resources that are helpful for landlords and investors, including our blog on long-term rent vs short-term rent.

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                    Author

                    Jessica Ferris

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                    Jessica is a property content writer at RWinvest. Keeping a close eye on the UK property market, Jessica helps our readers stay informed and up to date on the latest market news and statistics.

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