Are you thinking of buying a property as an investment to let out, or perhaps maybe an ‘accidental landlord’. Renting out property comes with many hazards, responsibilities, issues and challenges.
With this I mind we have put together some helpful information, tips and advice.
Should I rent my property out ?
There are many reasons why people decide to rent out their property. The most basic reason is financial. Perhaps an investment for years to come to top up a pension, capital growth, or it could just be a short-term move, while they are living somewhere else for work or family reason. The rental income covers mortgage payments and maybe gives an extra source of income. It could be to begin a business, and build a portfolio of rental properties.
How do I rent out my property?
You can either choose to manage the rental yourself or ask a letting agent to manage the administration and management of the property. You will also need to decide how to offer your property, furnished or unfurnished ( as most are ).
Check You Are Allowed To Rent Out Your Property - Talk to your mortgage lender
Before you begin renting out a property, you need to check you can ! You’ll likely need to move to a buy-to-let mortgage if you have a residential mortgage. Your buildings insurance may be invalid too, or your leasehold agreement ( if not Freehold ) could prohibit you from renting your home. Make sure you check all of this out.
Landlord licensing
Licensing schemes for landlords are in operation in some areas of the UK. These are designed to improve the standards of property management. There are a few types of licensing scheme, for example :
- Mandatory licensing – it is illegal to let out a HMO in England without a license
- Selective licensing – some local councils will ask all landlords in its area to apply for a licence, or to take a ‘fit and proper person’ test
Check with your local council if they operate a licensing scheme. A license will cost a small annual fee.
How much rent will my property achieve ?
Knowing what rent to charge will depend on a number of factors, the size of the property, the facilities it has access to, and the rental price of similar properties to name but a few. Setting your rent too high will make your property less attractive.. Setting it too low could make it more difficult to choose a good tenant. By seeking expert advice from a knowledgeable agent, you can set a rental price that maximizes your return while attracting the right tenants.
Tax and national insurance
Rental income counts as taxable income. Income tax is calculated on the profit you make as a landlord, so you will need to deduct any expenses first. The amount of income tax or National Insurance you pay will depend on the tax band you are in, your other sources of income and if the property is owned, jointly by you or a company
What are the legal responsibilities for landlords?
It is a legal requirement for landlords to conduct regular gas safety and electrical checks on their properties. The Gas Safety Certificate check should be conducted annually by a gas safe registered engineer. It is an inspection and test of all the gas appliances and systems in a property.
The Electrical Safety Regulations require a check of the electrical installations in rental properties every five years. The check should be conducted by a member of the qualified and competent person scheme. Landlords must provide copies of the gas and electrical safety certificates to their tenants.
- Property hazard assessments
- Smoke and carbon monoxide detectors to comply with fire safety regulations.
- Legionella assessments
- Energy Performance Certificate (EPC): The property must have a valid EPC with a minimum rating of 'E.'
Fire safety regulations
Landlords should ensure that a range of fire safety measures are in place in their property. This includes installing smoke alarms on every floor and a carbon monoxide alarm in every room with a solid fuel burning appliance.
Right to rent checks
Right to rent checks are mandatory for landlords and letting agents. Landlords must ensure that before a tenancy can begin, they have proved that a tenant is in the UK legally, and has the right to rent a residential property. Landlords are liable for significant fines if checks are not made, or tenancies commence with tenants who fail the checks.
Starting The Tenancy
A tenancy agreement will be needed, and to be signed by you and the tenant. This is something Acres can do for you. Make sure it is tailored to your requirements. For example, if you want your tenants to maintain the garden or not smoke on the premises, you need to include these as clauses. But anything you include must be legal. Most tenancies fall under an Assured Shorthold Tenancy (AST), which allows tenants to rent your property for a fixed period, usually six months to a year.
Ensure all repairs have been completed before your tenant moves in. Leave instructions for appliances, plus any helpful information.
A complete inventory will be needed– photos taken or videos of your property and any items included. Your tenant should sign the inventory to confirm that everything it lists is present and in the stated condition.
Your tenant must be provided with certain documents, including the energy performance certificate, gas safety certificate, Electrical Installation Condition Report (EICR) and a copy of the government’s How to Rent guide. You must also protect your tenant’s security deposit in a government-approved scheme. This security deposit will be released back to the tenant at the end of the tenancy, provided that it’s not needed to cover the cost of damages they have caused to the property.
Protecting your tenant’s deposit
Landlords have a legal obligation to protect the deposit of their tenants, and return the deposit to tenants at the end of the tenancy, minus any reductions or costs. Here at Acres we of course will do this for you, you can never ask the tenant to do it. Landlords must use a government-backed tenancy deposit scheme, even if the deposit is paid by a third party such as a parent or friend of the tenant.
Landlord insurance
Landlords do not have to take out specialist contents and buildings insurance for their rental properties, but it is highly recommended that they do. Standard insurance policies will not cover landlords for issues such as tenants not paying rent or causing damage to the property. Landlord or ‘buy to let’ insurance will include extras such as public liability cover, loss of rent, emergency cover and legal expenses. Premiums could be higher depending on the tenants you are renting to.
During The Tenancy
Landlords are responsible for most repairs and maintenance in a rental home. This includes the electrical wiring, plumbing and sanitation, heating and hot water, and the external structure of the building.
If renting out the property without an agent, you must be ready to attend to any tenant issues. It is worth having a list of reliable tradespeople to call on or taking out breakdown insurance to cover you for household emergencies.
Periodic inspections of the property should be carried out to ensure that the tenant complies with the terms of the tenancy agreement. However, you must give 24 hours’ written notice before visiting the property – your tenants may refuse entry if they wish.
What rights do landlords have to take back possession of their property?
Currently a number of options are available to landlords if they need to gain possession of their property, although the recent change of government has meant proposed sweeping changes, which also should be taken into consideration, and obtaining your property back my become significantly harder.
The primary method of eviction of a tenant in an assured shorthold tenancy is through a Section 8 or a Section 21 notice. A Court order can be obtained to claim possession if the occupiers of the property have no rights to occupy; the landlord can agree with the tenant to surrender the property, or prove that the property has been abandoned by the tenant or occupier.
Balance Your Time And Costs
It is possible to rent out your property yourself, and being a DIY landlord allows you to save on letting agency costs. However, being a landlord is challenging and time-consuming, especially if you fit in with a full-time job. Using a trusted letting agent will ensure that you have great tenants, earn the maximum rent and that any emergency and routine maintenance jobs are carried out promptly.
What does a letting agent do for a landlord?
Put simply, a letting agent arranges everything on behalf of the landlord. The agent gives the landlord peace of mind when it comes to dealing with the property and the tenants on your behalf.
Letting agents offer expertise and knowledge in a range of areas. It’s our job to know everything about being compliant with the law, understanding the current market when it comes to agreeing on rental income and knowing how to best advertise your home to prospective new tenants.
Of course we do charge a commission, but you can’t put a price on sleeping soundly – or the knowledge that your tenants are sleeping soundly in your property.
Of course, we do charge a commission, but you can’t put a price on peace of mind – knowing that your property is being professionally managed and your tenants are well-cared for. With a letting agent handling everything, you can rest easy, confident that your property is in good hands.
You must comply with the law on discrimination when choosing the best tenant for your home. Discrimination against anyone based on protected characteristics, including age, race, religion, disability and sexual orientation is against the law. You can find more information on the gov.uk website this will help you understand your responsibilities.
The Benefits of Using Acres Lettings
1. Time-Saving
We handle all aspects of the rental process, including advertising, tenant screening, and property management.
2. Expertise
Acres understand the local rental market, all legal obligations, and how to price your property competitively.
3. Access to Marketing Channels
We of course advertise on Rightmove and On the Market, social media and our excellent web site increasing visibility to all potential tenants.
4. Tenant Screening
We will conduct comprehensive background checks to minimize the risk of problematic tenants.
5. Legal Compliance
Acres ensure you meet all your legal requirements, such as drafting tenancy agreements and deposit protection.
6. Property Management Services
We of course offer full management services, taking care of maintenance, rent collection, and tenant communication.
7. Dispute Resolution
We will if needed mediate disputes between landlords and tenants, ensuring issues are resolved professionally.
8. Peace of Mind
By trusting us with the management of your property, you can relax knowing we’ll handle everything with care, reducing your stress and providing you with a seamless, worry-free rental experience.
Costs and options of a Lettings Agent : Click here to see our fees.
- Tenant-Find Only.
- Tenant find and rent collection.
- Full Management.
- Additional Fees.
Using a letting agent is especially beneficial for landlords who are new to renting, live far from the property, or have limited time to manage it themselves.
For further information, help, and of course to book a valuation please contact our Lettings Manager Annabelle Reynolds on 312 4997 This email address is being protected from spambots. You need JavaScript enabled to view it.
Alternativly, are you thinking of selling your property and want to check how much your home is worth? You can get an Instant Valuation here.
If you would like to discuss selling your home, please get in touch with us This email address is being protected from spambots. You need JavaScript enabled to view it. or call any of our busy, helpful teams/offices:
Four Oaks 0121 323 3088
Sutton Coldfield 0121 321 2101
Walmley 0121 313 2888
Great Barr 0121 358 6222
Lettings 0121 312 4997
Thank you for reading this article, and your interest in Acres and our property for sale.
Nigel & Jayne Deekes – Acres Partners
Acres; proud to be family owned, managed, run and to have been serving the North Birmingham community for 33 years.
