If you are thinking about becoming a landlord, there are many factors you need to take into consideration. Our advice on renting out your property will prepare and inform you of everything you need to know about working in the property industry and how to be successful in doing so.
Advice on renting out your property: the basics
Renting out your property comes with many advantages and disadvantages, so it is essential you know all of them before deciding if it’s for you.
The biggest benefit of owning a rental property is, of course, the income it provides. Every month, providing your tenants pay on time, you will receive a decent sum of money which will supplement any mortgage outstanding on the property. If you own the property outright, then this is even better as the money will be able to cover other expenses.
As a property owner, you will also be eligible for tax benefits. Tax deductions available to landlords include expenses for:
- Replacing damaged furniture
- Accounting processes
- Buildings and contents insurance
- Cleaning and gardening
Sweat equity is also a factor you should consider as it will add value to your property. Routine maintenance and upgrades, such as repainting and basic landscaping, will allow you to charge more for rent and it will increase your property’s value should you decide to sell it in the future. Removing outdated furniture and old appliances and installing upgraded versions is a great way to enhance your property’s resale value. If you need help during the removal process, removals Chiswick and Man and Van Hammersmith provide an efficient and effective service that ensures all your belongings are transported safely and free from damage.
Being a landlord is more than a full-time job; it is a commitment which requires your attention 24 hours a day, seven days a week, 365 days a year. Anything from burst pipes and lost keys to broken door handles and dripping taps will be your responsibility, so you need to be prepared to help your tenants whenever there is an issue with the property.
Although there is a chance you could get a great tenant that will always pay their rent on time for the duration they are in your property, it is not uncommon for tenants to either be late on their monthly payments or not pay at all. Failure to pay rent will directly impact your monthly income, so it’s certainly a factor you need to think about.
There is also the possibility that there are periods of time where no tenants occupy your property. When this happens, you are still obligated to pay property taxes, insurance and any homeowners associations fees associated with the property. If your property does not get rented out for a while, these costs will add up and reduce your profit over time.
If you have weighed up all the pros and cons of becoming a landlord and believe renting out your property is what you want to do, then read on and follow our advice for ultimate success.
Do your research
Knowing your market is crucial in order to make your property more appealing to potential tenants. You should look at similar homes in the local area and find out how much they are being rented out for. You don’t want your rent to be too low as you could end up losing money, but you also don’t want it to be too high as this will discourage tenants from investing in your property. Your rent should, therefore, be competitive but reasonable.
You also need to consider your target demographic carefully. Is your property suitable for families, students or lone tenants? If you are unsure of who will benefit from your property most, it is worth taking the time to consult with a letting agent as they may be able to advise you.
Prepare your property
Before you put your property on the market and make it available for tenants to rent, you need to remove any personal items and decide whether it will be furnished or unfurnished. Removals Notting Hill and Man and Van Kensington will be there to assist you if you need to move furniture in or out of your property. The dedicated team will ensure the process is as smooth and stress free as possible.
Typically, prospective tenants like walking into a property which is a ‘blank canvas’ (e.g. neutral colours and minimal furniture) as it makes it easier for them to envision themselves living there. However, furniture can easily add character to any property, making it more appealing, so it is entirely up to you how you decide to showcase your home.
It is also worth hiring a professional company to give your property a deep clean. Merry Maids tenancy and letting agent services is ideal. They leave your property in immaculate condition using professional materials and equipment to guarantee cleaning of the highest standard.
Understand your responsibility
As previously mentioned, becoming a landlord is a huge responsibility, so you need to be well informed of what is expected of you. Being on call 24/7 is essential as you will be responsible for a number of things, including:
- Repairing the structure and exterior of the property
- The safefty of gas and electrical applicances
- The fire safety of furniture and furnishings provided
- Ensuring the propety is fit for habitaion
Know the legal stuff
There are a plethora of regulations you must comply with if you want to be a landlord; in fact, there are around 145 laws which landlords need to adhere to when renting a property.
In England, it is expected of landlords to carry out our credit and right to rent checks in line with immigration laws, take and protect deposits and have all the necessary paperwork in place, and that’s not all!
Your tenant’s safety is of utmost importance, so arranging a gas safety check once a year is a priority. You should also ensure all electrical appliances and wiring in the property gets regularly tested.
Legally, your property must have an energy performance certificate (EPC), which needs to be band E or above. An EPC provides information about the energy efficiency and environmental impact of a property and once obtained, is valid for ten years. The most efficent homes are in band A, but the average property in the UK is in bands D-E. MoneySuperMarket have a handy article which tells you 10 different ways in which you can improve energy efficiency at home and thus improve your EPC rating.
If you would like to know more regarding the legal requirements of being a landlord, you can find all the relevant information here.
Finding a tenant
Finding good tenants takes diligence and a fair amount of common sense. One of the best ways to shortlist a pool of potential tenants is to utilise tenant referencing. This type of referencing focuses on three main areas:
- Employment history
- Rental history
- Credit history
All of these categories are useful to know as it indicates whether they have been a good tenant in the past, if they have a regular income to keep up with rental payments and whether they are sensible with their money and have a good credit score.
Online letting agents are an excellent way to find tenants as they are more cost effective and efficient than high-street alternatives. High-street letting agents generate most of their enquiries through websites such as Rightmove and Zoopla, however, private landlords cannot upload their property directly onto these websites. By signing up to an online agent, paying a small fee and filling out a form consisting of your property details, you will be able to market your property across all the biggest portals.
Conducting viewings of your property is a very important process as it will determine how quickly you find a tenant willing to rent. As a landlord, you should know the ins and outs of your property and care for it as if it was yourself living there, making you the most suitable person to arrange and be present during viewings. Here are a few tips you should know:
Don’t stop taking viewings
Just because a tenant has shown their interest or verbally stated they want to rent your property, that is not enough to stop other people viewing. Until you have completely secured a tenancy, e.g. someone has paid their deposit or signed a contract, you should continue to keep conducting viewings and processing applications. It is not uncommon for tenants to delay move in dates or decide they longer want to rent the property altogether, and as there is little you can do as a landlord to make up for the lost time and money this causes, you can at least back a backup plan.
The more viewings you get, the quicker your property will come off the market. It is therefore vital you make yourself available for viewings as often as possible. Being punctual is also necessary as it not only shows the potential tenants that you are an organised and dedicated landlord, but if left for too long they could easily change their mind and search for another property elsewhere.
It is likely that prospective tenants will have a lot of questions about the property they could potentially be moving into, but you may not always know the answer. If this is the case you should tell them this and, if possible, do some research and give them their answer when you can. If you begin to fabricate answers, it could easily backfire, and you will be left with unhappy occupants.
Making the most out of your property
Deciding to rent your property out is a big decision, but can be a very worthwhile investment. The property industry is quite complicated and requires a lot of attention to detail, but over time and with experience you will become more knowledgeable and find the best ways to make the most out of your property.