As a buy-to-let landlord, successfully letting a property is an important step to get right when starting out. If you are unprepared, you could find yourself in a legislative and organisational nightmare.
Successfully letting a property can come down to making sure you stay up to date with the latest changes to the industry and doing your research. Here are our top tips:
1. Research your surroundings
When purchasing an investment property, it is important to research the area in which you are buying. Think about finding out the typical rent in the region, as well as the good local schools and nearby amenities. Often, the reputation of the local area will lead to you attracting a specific type of tenant. For example, a family looking for a permanent home, students after accommodation near to a university, or workers in need of reliable commuting options. Tenants will normally have plenty of questions, so make sure you know the answers!
2. Consultation is key when buying a property
Once you have agreed on a mortgage for your buy-to-let property, it is important to remember to consult the relevant people. This could include contractors, local councils and utility suppliers, to make sure the property is fit to be let to tenants.
3. Know your responsibilities as a landlord
In order to avoid a hefty fine, it is imperative that you comply with your legal obligations. These can range from fire and gas safety to Right-to-Rent checks and Energy Performance Certificates. Successfully letting a property means understanding your landlord responsibilities, as set out by the government.
4. Perfect your tenancy agreement
The tenancy agreement is the contract between you and your tenants, outlining your respective rights. As such, you should be sure that all details in the agreement are correct, such as the tenant’s name, the rental amount and address. These details MUST be correct in order to protect both parties.
5. Protect your tenancy deposits
An important component of successfully letting a property is the protection of your tenants’ deposits. It should be placed in one of the three government-backed schemes:
You must make sure the deposit is placed in a scheme within 30 days of receiving it.
6. Remember to undertake periodic inspections
Regular inspections on your investment are vital to avoid any maintenance issues going unchecked for too long. You are legally required to give your tenants at least 24 hours notice. Otherwise, they will have the right to deny you entry
7. Keep a thorough inventory for your property
At the beginning of a tenancy agreement, creating a thorough inventory is vital. Take photographs of all the rooms, as well as the outside of the property. You can then make note any existing damages or issues that may need attention. When you go to carry out periodic inspections and at the end of the tenancy when the tenants move out you will have proof in case of a dispute. Before new tenants move in, they should be provided with a copy of the inventory to sign and date if they agree it is correct.
8. Manage your finances accordingly
You must make sure that you are able to sufficiently manage your investment and have a sound knowledge of your budget. Work out your typical monthly rental yields and balance this against outgoings, such as mortgage payments. It is also important to make sure you have an overflow fund for unexpected outgoings, such as repairs to damages.
9. Successfully letting a property can mean having someone look after it for you
Managing a property can be time-consuming. If you do not dedicate the necessary time to ensuring you are doing your job as a landlord properly, mistakes can happen. If you will be focusing on your lettings business part-time, consider enlisting a reputable letting agent to manage your investment for you.
10. Take out landlord insurance
Having suitable property insurance is important. A policy that includes cover against renting-specific issues may protect you financially. Taking out a comprehensive landlord insurance policy is an option that may give you peace of mind.
Disclaimer: The opinions and views expressed in the above article are those of the author only and are for guidance purposes only. The author disclaims any liability for reliance upon those opinions and would encourage readers to rely upon more than one source before making a decision based on the information.