How to Become a Landlord - RWinvest

How to Become a Landlord
[12 Tips] – RWinvest

What Tips Do You Need to be 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 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 tips 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.

 

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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. So what exactly is a landlord? What do landlords need to know before they get started? And how do you register as a landlord?

The landlord of a property is the person who owns a property which 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 who is managing the property if this isn’t the landlord.

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 in order to succeed, you need to be aware of the rules you should stick to, and the research that must be done. Spend as much time as possible reading up on landlord duties, costs, and potential income. 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.

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 which 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.

Who is the Landlord of a Property?

The landlord of a property is the person who owns a property which 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.

How to Find Out the Landlord of a Property

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 who is managing the property if this isn’t the landlord.

What to Know About Being a Landlord

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 in order to succeed, you need to be aware of the rules you should stick to, and the research that must be done. Spend as much time as possible reading up on landlord duties, costs, and potential income. 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.

How to Register as a 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.

Check You're Allowed to Be a Landlord

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 which 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.

2. Learn About Buy to Let

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. Buy to let is a term used to describe a property which has been purchased by an investor who plans to let the property out and generate income. If you’re thinking of becoming a landlord in the UK, you should understand what makes a buy to let venture successful before you get started.

One of the most important tips for landlords buying a property is to research 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.

Liverpool Investment Opportunities

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, regions like the North West are known to 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 24% by 2024, which is a significant rise compared to the UK’s predicted growth of 15.3%. 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’re focused 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.

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 in order to become a landlord. A common example of this an inherited property which has been passed down from a relative. This way, the landlord already owns the property in full and is able to 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.

3. Think About Finance Options

If you’re planning on purchasing a buy to let property in order 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 the majority of landlords. That’s why arranging some financial help is crucial.

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. The most significant difference between buy to let mortgages and traditional mortgages is the fact that buy to let mortgages require a larger deposit. To obtain a buy to let mortgage, you need to pay a deposit of 25% of the full 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 with the help of a traditional mortgage.

If you don’t fit the criteria for a buy to let mortgage and are wondering ‘how do 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 the option to pay a percentage of the property price across different points in time. 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.

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.

Amy Jackson, RWinvest

4. 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 a crucial aspect to think about, especially if using 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’re able to 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 a 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.

5. Think About Additional Costs

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 costs and fees that every professional landlord 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 in your property. One of the most useful 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 by the time they’re ready for tenancy. Because they’re fresh 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.

Similar to maintenance costs, refurbishment is another of the possible costs 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, as certain elements of the property may start to look worn down and be in need of a refresh.

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 a lot of 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 a five year period, but you should base this on your personal circumstances.

Landlord insurance is something that should be considered by anyone wondering how to be a landlord safely and effectively. There are a number of 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 important type of cover on the list. With this, the building itself is covered if you encounter any damage. Contents insurance is another type of insurance to consider, especially if you’re offering the rental property furnished. Liability insurance is essential as stops a tenant taking legal action against a landlord is they become injured in the property, while rental protection insurance and unoccupied property cover help to protect you from a loss of earnings.

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 a length of time in which a property is not tenanted, which stops the landlord 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, as 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. This has been evident with one of Liverpool’s latest off-plan developments, City Terraces. Located minutes away from Liverpool city centre, this property saw high interest from tenants – with the majority of apartments in the development being reserved even before completion.

While it may seem that when renting a property out to family you wouldn’t need landlord insurance, this isn’t correct. You still need to get all the necessary protection for your property even if you’re renting it out to a family member or somebody you knew prior to the beginning of the tenancy.

Property Maintenance Costs

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 in your property. One of the most useful 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 by the time they’re ready for tenancy. Because they’re fresh 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.

Refurbishment Costs

Similar to maintenance costs, refurbishment is another of the possible costs 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, as certain elements of the property may start to look worn down and be in need of a refresh.

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 a lot of 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 a five year period, but you should base this on your personal circumstances.

Landlord Insurance

Landlord insurance is something that should be considered by anyone wondering how to be a landlord safely and effectively. There are a number of 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 important type of cover on the list. With this, the building itself is covered if you encounter any damage. Contents insurance is another type of insurance to consider, especially if you’re offering the rental property furnished. Liability insurance is essential as stops a tenant taking legal action against a landlord is they become injured in the property, while rental protection insurance and unoccupied property cover help to protect you from a loss of earnings.

Letting Agent/Property Management Fees

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

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 a length of time in which a property is not tenanted, which stops the landlord 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, as 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. This has been evident with one of Liverpool’s latest off-plan developments, City Terraces. Located minutes away from Liverpool city centre, this property saw high interest from tenants – with the majority of apartments in the development being reserved even before completion.

Do I Need Landlord Insurance if Renting to Family?

While it may seem that when renting a property out to family you wouldn’t need landlord insurance, this isn’t correct. You still need to get all the necessary protection for your property even if you’re renting it out to a family member or somebody you knew prior to the beginning of the tenancy.

6. Know Your Rights

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 a number of landlord rights for UK based landlords to be aware of. These rights revolve around making sure your tenant is abiding by the rules set out in their tenancy agreement, as breaking these may cause you to lose income.

For instance, 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.

Being a landlord also means you have the right to request that a tenant leave the property. This is normally because the tenant hasn’t paid their rent, but can also be due to them breaking their tenancy agreement in some way such as antisocial behavior 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.

 

 

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7. 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 a number of 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 biggest requirements to be a landlord is to carry out all the necessary safety checks.

One of the most important 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 make sure 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. Other things that landlords need to provide is adequate fire escape routes in the building, and to 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 a HMO (House of Multiple Occupancy). In this case, it’s necessary to provide a fire extinguisher within the property along with a fire alarm.

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 safety checks each year.

UK landlords renting out a house or apartment also need to make sure that the electric system within the property is up to standard. From July 2020, it will be mandatory for landlords in the UK to get their rental property’s electrical system checked prior to any new tenancy, with regular inspection taking place every five years.

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.

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 when 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 which 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 don’t agree 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.

On top of making sure your property is energy efficient, another of the most important 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, so that if they’re conscious about saving energy, they know what steps might need to be taken to achieve this.

The standard energy efficiency rating which all UK rental properties must meet is an EPC rating of E. By investing in specific properties, such as new build developments, there’s naturally better 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 in order 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, as in some areas landlords of any property type require a license. The best way to find out whether this is another of the legal requirements for letting a property in your area, is to check the website for your local council.

Lastly, it may seem obvious, but before renting out a flat or house, another of the biggest landlord responsibilities in the UK is to make sure your property is fit for human habitation. This means ensuring the building itself is stable, there’s 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, take a look at the 2005 Housing Health and Safety (England) Regulations.

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 met the terms of their tenancy agreement.

Safety Requirements When Renting Out Property

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

One of the most important 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 make sure 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. Other things that landlords need to provide is adequate fire escape routes in the building, and to 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 a HMO (House of Multiple Occupancy). In this case, it’s necessary to provide a fire extinguisher within the property along with a fire alarm.

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 safety checks each year.

UK landlords renting out a house or apartment also need to make sure that the electric system within the property is up to standard. From July 2020, it will be mandatory for landlords in the UK to get their rental property’s electrical system checked prior to any new tenancy, with regular inspection taking place every five years.

Tenants Rights

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.

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 when 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 which 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 don’t agree 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.

Energy Efficiency

On top of making sure your property is energy efficient, another of the most important 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, so that if they’re conscious about saving energy, they know what steps might need to be taken to achieve this.

The standard energy efficiency rating which all UK rental properties must meet is an EPC rating of E. By investing in specific properties, such as new build developments, there’s naturally better 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.

Licensing Laws

Some landlords may be required to obtain a license in order 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, as in some areas landlords of any property type require a license. The best way to find out whether this is another of the legal requirements for letting a property in your area, is to check the website for your local council.

The Property Must be Fit for Human Habitation

Lastly, it may seem obvious, but before renting out a flat or house, another of the biggest landlord responsibilities in the UK is to make sure your property is fit for human habitation. This means ensuring the building itself is stable, there’s 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, take a look at the 2005 Housing Health and Safety (England) Regulations.

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 met the terms of their tenancy agreement.

8. Decide Whether You Want to Manage the Property Yourself

A lot of people choose to become a landlord alongside their usual 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.

This is a particularly 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 a 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 not sure whether or not 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.

 

  • 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 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 which 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.

9. 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, and can mean the difference between high demand and strong yields or void periods and low returns.

As mentioned, properties in certain UK cities tend to offer UK landlords a lot more bank for their buck. If you’re planning to purchase a buy to let property, understanding the best buy to let areas is one of the key things to know about being a landlord. This way, you give yourself a better chance of making high returns and securing desirable tenants, leaving you with regular income. On the other hand, if you’re thinking of renting out a property that you already own, don’t worry too much if it’s not located in a UK property hotspot as there are other ways you can make your property more successful.

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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 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 may prefer the increased freedom that comes 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, not to mention having 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. Properties like Parliament Square, an upcoming development based in Liverpool’s Baltic Triangle area fit this criteria perfectly. This development is made up of stunning residential apartments and features a luxurious rooftop spa and pool for tenants to enjoy. By purchasing a property that ticks all these boxes and offers extra amenities like an onsite spa or gym, being a landlord is likely to be the lucrative venture you always hoped for.

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.

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. If the property you own is outdated, be sure to spend time and money refurbishing it to a high-standard. Properties with up to date decor 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 extra 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.

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10. 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 are required to look into the company selling the property and the property developer creating it. Doing this is essential, especially for new landlords, as this ensures you’re not putting your money at risk.

Look For Online Reviews

Reviews are a useful tool when researching any company, and 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 you’re interested in. Established companies will normally have a number of 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.

11. 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 to decide whether or not you plan on renting your property out with or without furniture. This may seem like a small part of a big picture, but making the right decision can dictate how popular your property is in terms of 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 which is fully, or at least part, furnished. On the other hand, tenants such as families or retirees may prefer an unfurnished property so that they can 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 filled 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.

12. 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 found 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.

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 effectively market your property to tenants.

For the majority of 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 which 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.

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 have been 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 as this gives more of a chance to speak directly to interested tenants and also lets you or the lettings agent find out more about them.

Experienced lettings agents/property management companies will be skilled in identifying the best tenants and carrying 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 details of people that can be contacted for a character reference. Other things to look out for when researching a prospective tenant 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!

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 effectively market your property to tenants.

For the majority of 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 which 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 have been 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 as this gives more of a chance to speak directly to interested tenants and also lets you or the lettings agent find out more about them.

Completing Background Checks

Experienced lettings agents/property management companies will be skilled in identifying the best tenants and carrying 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 details of people that can be contacted for a character reference. Other things to look out for when researching a prospective tenant 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!

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.

DISCLAIMER

This ‘how to become a landlord’ guide has been written to provide useful information for those looking to rent out UK property. Those looking to further explore the legal and financial requirements of becoming a landlord should speak to a qualified solicitor/ financial advisor before getting started.

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