Being a new landlord is an exciting prospect, yet at times it can feel overwhelming. Renting out a property for the first time requires managing the investment, keeping tenants happy, ensuring the property is maintained, and adhering to all the legal requirements.
There are many reasons for becoming a landlord. Maybe you are an accidental landlord who has inherited a property. Or perhaps you have purchased your first buy-to-let property to start a career in property investment. Whatever the case, our guide for new landlords will help you know how to rent out your property successfully.
Getting started as a landlord
Before signing a tenancy agreement with your first tenant, there is a lot to consider. First, you must ensure that the rented property meets the appropriate health and safety regulations. It’s also a good idea to think about the kind of tenant you want in your property.
For example, will the property be furnished or unfurnished? Will you let to pet owners? What about a smoking clause in the tenancy agreement?
Then, you will need to think about managing the day-to-day running of a rental business. For example, will you handle rent collection and maintenance issues or use a letting agency?
The cost of being a landlord
Being a landlord is an excellent way to enjoy passive income and financial freedom. You will, of course, have regular rental income. However, it’s also crucial to count the costs of being a landlord. Here are a few things you must budget for to be a successful landlord:
- Mortgage payments: You may have monthly mortgage payments to cover if you bought a buy-to-let. So, it’s good to have a contingency plan for void periods between tenants.
- Maintenance and repairs: Your responsibility as a landlord is to keep the rental accommodation in condition, fit for human habitation.
- Fees: You may have agency fees to cover or solicitor’s fees when drawing up a new tenancy agreement. Additionally, there may be fees required to reference a prospective tenant.
The Landlord and Tenancy Act sets out many of your responsibilities toward tenants. This requires that you protect the tenant’s deposit in a Tenancy Deposit Protection Scheme. In addition, you have maintenance responsibilities and must ensure the property meets appropriate safety standards.
The tenancy agreement is the basis of a good relationship between you and your tenant. This legal contract sets out the terms and conditions of the tenure. The agreement should outline the amount of rent, when it should be paid, and when you will review the rental amount.
Additionally, the tenancy agreement should have clauses about the tenant’s obligations. These could address issues such as pets, smoking, cleanliness, guests and care of the property. For example, it’s vital to outline when a long-term guest would be considered a paying tenant.
Finding the right tenant
Your success hinges on finding the right tenant for your first rental property. Therefore, it’s a good idea to have a plan to find suitable candidates. The easiest way to find tenants for your property is to work with a letting agent. Agents can take all of the hassle out of the process for you and can make a real difference in allowing you to enjoy the process of being a landlord.
You must avoid discrimination when interviewing potential tenants. The Equality Act forbids denying housing to anyone based on discrimination. Therefore, you can’t base decisions to rent on factors like gender, disability, religion, race or sexuality.
After narrowing down your list of potential tenants, you will need to reference them. This is a crucial step that you cannot skip. Tenant referencing involves checking their credit history, income, eviction records and current debts. Your agent will help with this process as well.
When your first tenant moves in
After finding a suitable tenant for your first rental property, it is time to facilitate a smooth move-in. First, it’s a good idea to go through the tenancy agreement with the tenant. You should also provide an inventory and walk them through the property. Then you and the tenant sign the tenancy and the inventory.
Dealing with tenants
After signing the tenancy, it’s vital to remember that your property now becomes the tenant’s home. Tenants have a right to ‘quiet enjoyment’ of the property. For some first-time landlords, it can be a shock to learn that the tenant has more rights than the property owner during the tenure.
What does this mean for you? First, you cannot turn up unannounced at the property unless there is an emergency. Also, you must take appropriate legal steps to evict the tenant for a breach of tenancy. It is also illegal to carry out a ‘self-help eviction’ or re-enter the property without permission.
A successful landlord will always try to keep tenants happy. Some ways to do this include the following:
- Being proactive with maintenance and repairs
- Allowing for some flexibility regarding guests, pets and decorating
- Responding to messages promptly
Ending a tenancy
Most tenancies come to an end, hopefully amicably. Whatever the case, both you and the tenant must follow the law when it comes to ending a tenancy. This involves giving the required notice period or going through the courts to obtain an eviction order.
Are you thinking buying a property to let in the Bristol area and need professional advice? If so, call our team at Hydes of Bristol. We can help guide you on some of the best areas to buy.