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So many people are now letting out properties in order to bring in an extra income. Whether you are a first-time landlord or still new to the process you will need to be aware of the basics before you start. But, what are the basics? Not everyone does it correctly. Others have been letting out properties/rooms for so long they are out of touch with current legal requirements. The most important thing to know is that if you do it properly it’s easier to find good clients, get a good rate and you’ll have fewer issues in the long run.
Here I will run through the basics and show that it isn’t that hard to let your own property yourself.
Safety Standards
Whether you are renting out a room or a house, your property will need to conform to the relevant safety standards. Basic precautions include fire alarms and safety certificates for gas (yearly) and electricity and fire alarms (every 5 years). If you have a gas hob then a fire blanket will be required alongside a fire extinguisher. Landlords are required to provide tenants with an EPC (Energy Performance Certificate) before they move in. Failure to do this can affect your ability to evict the tenant if the need arises later on. You’ll need to have proof they received it so it can help to send this via email.
The requirements differ between renting rooms and renting a flat or house. It is important to check which apply to your circumstances. For room only rentals there are more specifications including fire doors and emergency lighting. Make sure you check the government website so nothing is missed.
Getting the Right Insurance
As a landlord, it helps to make sure you have landlord insurance. This isn’t a legal requirement, but, can come in handy. It is specific for landlords and protects them, their property, and their tenants. It is important to note that normal home insurance is not designed to cover rentals even if you live in the property with the tenant. The landlord policy will state that you will be required to have a tenancy agreement with your lodger. This agreement will allow the tenant exclusive use of one room or the whole house (depending on what they are renting) within your property. You will not be able to enter that area without their permission.
Landlord insurance is a form of homeowner insurance. It is designed for those with rental properties. You should not need this and separate homeowner insurance. The policy can cover buildings and contents, fire, and flood. It also covers a landlord where a tenant or visitor sues and also where a tenant fails to pay rent. Thorough checks of tenants before a contract is signed will help avoid the risk of problems with payments or at least drastically reduce the chances. Obviously, there are numerous companies that offer this form of insurance with different options and varying prices. It’s best to compare landlord insurance to make sure you get a competitive rate. It can help to check their Trust Pilot score when doing your research.
Quality of Your Product
Anyone looking for a property will be influenced by price, location, and the condition of the room(s) and other areas they’ll have access to. It can also help to spruce the place up a little if it’s looking a little worse for wear. I have seen it many times where rooms don’t look particularly great and no one gets in touch or isn’t interested if they do come to look at the property.
In some cases, just a good clean will suffice. Sometimes a little freshen up can do wonders. A coat of paint on the walls, fill and repaint skirting, remove excess furniture. Carpets may need a clean. You’d be amazed how quickly they get dirty when shoes are worn in the home. Touch-ups to make the rooms or home look more presentable are important and can mean the difference between an interested tenant and a further 5 more viewings. Naturally, it makes sense to do work within reason, there is no point spending a fortune when you can only get up to a certain amount for rent. Something to think about prior to making your improvements.
If the finished product looks good, it’ll ensure a good tenant, provided it isn’t overpriced.
Marketing
Market a property well to get the right type of tenants getting in touch. Advertising on sites like Spare Room (for rooms) and Open Rent (for flats and houses) will bring in interest provided the property looks reasonable. Make sure pictures taken are clear and feature the room(s) well. It helps to stand at the far end of a room and take pictures to show its size. A large, bright, uncluttered room is far more enticing.
A letting agent can do the marketing for you but will charge a fee. It can help take the headache out of finding a tenant. Then again, in my experience, if you want something done properly, it’s best to do it yourself. It all depends on your time constraints and confidence. Agents normally charge between 10% and 20% of the rent depending on the service provided. It’s best to use a local agent if you chose this option. Keep in mind fees will vary between each, many will be open to negotiation.
Tenancy Agreement
Although not a legal requirement a tenancy agreement signed by both parties can be important. It is basically a contract between a tenant and landlord allowing the tenant to live in the property provided they keep up with the rent payments and follow outlined rules. The most common type of tenancy agreement is an Assured Shorthold Tenancy Agreement (AST). You’ll require a written agreement signed by both parties to avoid any disputes over what was agreed at a later date. A free template for a tenancy agreement can be found on the Lawdepot website.
Taking and Protecting the Tenants Deposit
Landlords will normally take a deposit from their new tenant. Within 30 days of receiving a tenant’s deposit, the landlord will need to put it into a government-accredited scheme. Then they are then required to provide the tenant with the deposit protection certificate. From the 1st June 2019, the amount was capped at a maximum of 5 weeks rent, 6 if the rental costs are over £50,000 a year. It is to protect the landlord against breaches of the tenancy agreement. It may cover damage to the property, cleaning and unpaid bills when the tenant leaves. If there are no issues it’ll be returned to the tenant when they vacate the premises.
Inventory
Before a new tenant moves in it is good to practice to take an inventory of the contents and the condition. This can be done by the landlord or they can ask the letting agent or an independent inventory clerk to do this. This can save the landlord time if they are not able to do this themselves. Taking an inventory isn’t a requisite for deposit protection schemes. It is however a good way to avoid deposit disputes when the tenant contract expires.
Tenant Checks
Vet your new prospective tenant properly. Failure to do so can be costly. You see it all the time on tv programs “Nightmare Tenants, Slum Landlords”, “Bad Tenants, Rogue Landlords”. Take references and check them carefully including employment details, credit rating, right to rent in the country, CCJ’s etc. Landlords that do not check their clients have the right to rent in the UK may be fined up to 3000 per tenant.
Alternatively, if it sounds like more than you can handle use a referencing agency. We use rentchecks.com who do a thorough job in preparing a report that includes everything you will need to know to make an informed decision.
Meter Readings
At the start of each new tenancy, it makes sense to take a picture of the meter readings to keep with your records. It can also help to be organised and contact energy suppliers when the tenant moves in so they know who will be taking over responsibility for the bills. It is then up to the tenant to decide whether they stay with that supplier or look for a more competitive rate elsewhere where they are renting a flat or house. For room lettings, the bills are normally included so you would have control over supplier choices.
Summary
I’m hoping this post has proved useful for those considering renting out a house, flat or room. It is quite easy to rent out rooms and properties once you know what to do. It can be a little daunting at first. If it’s your first time you can always employ a letting agent and see what they do so you can go it alone next time. If you use an agent, make sure you have given them specifications for the type of tenant you would like in writing. Look at nonsmokers, people without pets. Both will mean smells lingering after the place is vacated which may put off potential new clients.
Good luck x
What tips do you think are most important for new landlords? What tips would you give a prospective landlord?
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A good overview. Will keep this article bookmarked when needed. Keep writing!!
I’m glad you found this useful.
This is a really interesting piece. I think to rent out a house is such a huge deal!
It is the first time around. When you get into the swing of it it’s really simple to do.
This is a great guide for landlords. I have been renting all my life and I’ve stumbled upon quite a few greedy landlords who did everything they could to go around the law and not fix things properly in the property, creating hazards.
That’s awful to hear but happens often. You can get a feel for a landlord when you go see a property if they are showing the rooms, flat, house.
As a new landlord, these tips are so helpful to follow. I make sure I run checks on all prospective tennants, you can never know.
That’s good to hear Lisa. It’s important to cover yourself to avoid issues coming up.
Such a really interesting read and lots of fab tips for anyone thinking of becoming a landlord! A great way to bring in extra income! I’d love that kitchen, jealous of all the space! Sim x
Many people don’t realise what’s involved but it’s handy to know.
This is good info to know. I have been thinking about renting some property
It’s a very popular way to make money. Make sure you have all the bases covered and you’ll be fine.
Being a landlord is hard work but it is a great way to secure an additional income especially for retirement.
There is a huge amount to know before you take the leap, this is such helpful advice to anyone thinking about it.
I’m looking at taking over running my partners property rather than an agent so I’ll be putting these tips to use x
I’m so pleased to hear that you’ll be using my tips Claire. Good luck. Be thorough when screening and make sure you tick all the boxes for legal requirements and safety.
These are some great tips. I am not a landlord, but if I were, this all seems good to keep in mind.
It’s something to think about doing in the future. It is a good way to make money.
Invaluable advice – pays to do your homework ! Thanks for the tips
No problem Margaret. Thanks for reading my post.
This is such a good post for those wanting to rent their properties. I knew a tenant agreement was needed but did not know that the owner also had to insure the property. This is good to know
It’s important to cover everything so you don’t have issues further down the line.
So many great tips.I think having insurance is one of the most important thing. You never know what kind of tenats you will get so it’s good to be covered
Insurance really is important especially when tenants haven’t been screened properly.
I’m hoping to become a landlord by next year. These are great tips, thanks for sharing.
Good luck. Be sure to follow these tips. They will really help.
Some excellent tips, we found the inventory and Agreements very useful, also the holding of the deposit in a separate account is very good, Excellent post.
Thanks Liam. Sound like you’ve had some experience in this area.
This is really interesting, we have only really looked at this process from the otherside, until we bought our own place. An inventory is so important, we would take pictures of literally everything.
It’s good to do that to make sure you are covered if you have a dodgy landlord or on the flip side bad tenant.
This is very timely as real estate and market for housing can definitely go down because of work recession. Handful tips when going for a housing business.
The great thing is people will always be looking for somewhere to live. This sort of profession is great for a regular income.
These are helpful tips; it must be quite daunting, letting your home out for the first time. It’s important to find a tenant you can trust.
It is at the start. Once you get into the swing of it you’ll think nothing of it.
Great tips! I have a small house property and I search related information, because I want to rent it! I found very useful your post!! Thanks for sharing!!
No problem Nick. It’s a good business to go into.
I don’t have any tips as I’ve never been a landlord, but personally I think it’s a great way of earning additional income and if I could afford a second property it’s something I’d love to do x
Sometimes simply renting out a room in your own property is a good way to get started.
Great tips, I have thought about renting out our house so we can move to somewhere bigger but its not happened yet
I hope you are able to at some point soon.
oh wow this is quite interesting and amazing..This blog post is very useful and beneficial indeed..Thanks for sharing these tips and ideas..these are really helpful…great work..Loved it…
Thanks so much. I’m glad you liked my post.
I would say having an inventory list is possibly one of the most important things especially if you are renting the property in a furnished condition. So many items seem to go missing all the time.
That is very important for both tenants and landlords.
These are good tips. I am planning to invest in real estate and become a landlady myself so this will come in handy!
Good on you. I hope it all goes well!!!
This is some really awesome advice. I have never been a landlord but my brother has been as well as my parents, and it is so important to have good contracts in place!
It really is important to have a contract with tenants. It ultimately covers you both.
A few of my friends have made good money buying and renting apartments.
It is a great way to create a steady income.
Nice post! We looooove our landlord because he is so kind, understanding, and is very hands off. He’s always available for questions and genuinely cares about our family.
That’s good to hear. It’s how landlords should be.
Great tips for all landlords. We’ve been a single income family for a while whilst I was a stay at home Mum, but I’ve recently started my own business and our plan for the future is to be able to invest in another property.
That’s great to hear Jo. I hope it works out for you and that this post has proved useful x
very useful and important post. it is an art to be a landlord.. of sorts
It isn’t as hard as you might think. If you can create a good product and get the right tenants in you’ll be fine. We have many that stay for years.
I have never let out a property but my parents and sister have. Honestly it is not something I would ever do, the state the houses were left in afterwards were shocking and it seemed that unless it was set on fire the tenants got their deposits back leaving my parents out of pocket. I have only ever temporarily rented a place for 14 months and I left the place even more spotless than when I moved in.
It’s all about the tenants you get in to start with. Find good tenants and there are far less if any problems. We’ve been doing this for years now.
This is good to know! We’ll be renting out a house in a few years and I’ve been looking to get ahead of myself in regards to information that we need.
That’s good to hear. It helps to be clued up when you do this.
I will have to bookmark this for my brother, he is a landlord so needs to know as much as possible on the subject. Although he has been quite fortunate and has a nice family in his property.
It’s great to hear he has found a nice family to let it out too.
Oh wow this is good info because so many landlords get sued!
That’s the ones that haven’t a clue what they are doing. It’s important to be aware and prepare.
These are all amazing tips! I’m thinking of investing in real estate to be a landlord
xoxo
Lovely
It is a great way to make money when you have the know-how!
Great tips! I hope to become a landlord one day to esrn some extra cash.
It’ll be really handy to create an income for your future life. The sooner you can start with property rental the better.
I will have to link this to my friends that are first time landlords 🙂 very useful post and theres a few things I wouldnt have even thought about!
Thanks for sharing this Kristina. I hope they will find the post helpful.
These are such great tips. My parents became landlords a couple of years ago and were quite overwhelmed at the start.
It is a bit overwhelming at the start. Once you’ve done it a few times it gets easier.
There are some really good tips here for sure. Especially the one about having the right type of insurance x
That is a biggie. Not everyone is aware that they’ll need to check what their insurance covers or change it to one that better suits them.