Becoming A Landlord

Welcome to our concise guide to becoming a landlord. Are you thinking of becoming a landlord or extending your current roster of buy-to-let houses? According to the Office for National Statistics, over 4.5 million households within the UK live within the private rented sector (2017). This is an increase of 63% across a decade – meaning now is as good a time as any to consider becoming a private landlord.

This guide is aimed primarily at new landlords embarking on their first buy-to-let journey. However, it can also prove to be useful for landlords with previous experience too. We will discuss how to start being a landlord, your legal obligations as a landlord and some frequently asked questions too. So, without further ado, let’s talk about becoming a landlord!

What Should a Landlord Do?

As a short and fast overview, there are several things a landlord should do to abide by the private renting rules set out by the government (England and Wales only). As a landlord you should:

• Keep your properties safe with no health hazard risks, including the installation of a carbon monoxide alarm is one is not already present
• Make sure your tenant has the right to rent your property (England only)
• Ensure your tenant’s security deposit is protected in a deposit protection scheme
• Make sure all gas and electrical equipment is installed safely and regularly maintained, including the smoke alarm and any water appliances
• Give your tenant an Energy Performance Certificate – this specifies the energy efficiency rating of the property
• Give your tenant the How to rent checklist

If you are a landlord or thinking of becoming a landlord in Scotland or Northern Ireland, the rules will be different for you.

Of course, this is just a basic overview and there is much more to becoming and being a successful landlord. More detail and information can be found in the FAQ section at the end of this guide.

Can You Make a Living as a Landlord?

The biggest incentive for becoming a landlord, in the vast majority of cases, is the potential to earn additional income. Your tenant’s rental payments will cover any monthly mortgage repayments on your rental property and provide a little profit too. The more properties you have, the larger your rental income will be. If your mortgages are paid off, then the amount of income you can earn increases significantly.

Nevertheless, there are many costs associated with being a landlord. Investment property and making money from rental properties can be lucrative, but the general rule remains the same: the bigger your portfolio of properties is, the more costs you’ll have.

Landlord costs

Costs that you need to consider as a landlord include:

• Buy-to-Let Mortgage Costs: Most likely to be your largest regular outgoing. If you make a large deposit then you’ll secure a better deal. Taking out a variable-rate mortgage (like a tracker) will mean you are at the mercy of the Bank of England base rate. Your mortgage payments will rise if the base rate does.
• Repair and Maintenance Costs: If you have well behaved and respectful tenants who actively maintain and preserve your household whilst they are living there, then your repair costs should be relatively low. It’s hard to put a price on maintenance as every property is different, and you will know more about it than anyone. The ‘little and often’ approach is advisable for general maintenance tasks as it can often keep costs down in the long term.
• Agency or Property Management Fees: Using a letting agent and a property manager can be extremely handy because they can take care of all the nitty-gritty stuff and paperwork for you, including tenant and property management. They can collect rent, deal with tenant issues and queries and conduct inspections on your behalf.
• Refurbishment Costs: Putting some money aside for refurbishments is a wise idea, so the cost doesn’t hit you all in one go. You will probably need to redecorate parts of your property every few years.

Landlord Insurance: Taking out landlord insurance is a wise idea. In fact, if you wish to apply for a mortgage, your lender will usually expect you to have this in place. Costs will vary depending on the type and location of your property, and the level of cover you want.

How Do I Start Being a Landlord?

As a general overview for the very first initial stages of the journey, there are 7 steps you need to follow to start being a landlord.

• Ensure you understand what being landlord entails by following this guide
• Check if you are allowed to let your property
• Understand and abide by your legal obligations as a landlord
• Choose whether you want to use a lettings agency or manage the property yourself
• Prepare your property so it is ready for tenants
• Find and reference tenants – or leave the hassle to your letting agency

FAQs on Becoming a Landlord

What Are My Legal Obligations as a Landlord?

As a landlord, it is your responsibility to:

• Ensure the property is insured against damage like fire and flood
• Ensure that any gas equipment has been installed by a registered Gas Safe engineer
• Ensure a registered Gas Safe engineer conducts annual safety checks on gas appliances
• Provided your tenants with a gas safety check record
• Ensure electrical safety throughout the property
• Get an energy performance certificate (EPC)
• Carry out ‘Right to Rent’ checks when setting up a new tenancy agreement.

Do I Need to Hire a Lettings or Property Management Agency?

Here at JonSimon, our job is to handle the day-to-day management of your property. We can advertise your property, find and vet your tenants and handle your maintenance or property repairs too. We can handle all property inspections, make sure that documentation is legally compliant and conduct all other property management tasks on your behalf. If you’d prefer to be more hands-off, or if you have other projects going on elsewhere, then using a letting agent is a wise move.

What Are My Rights as a Landlord?

You own the property but as a landlord, you no longer have the right to enter it of your own free will. You must give your tenants at least 24 hours notice before you enter the property, even if it is to carry out some agreed refurbishment or repairs. You do have the right to request that the tenant leave the property, or bring legal action if the monthly rent is unpaid or the contract terms are broken.

Get in Touch With Us Today

Are you looking for assistance with your property management? Perhaps you’d like some more information on how we can help you become a successful landlord. Just get in touch with us today for a chat and we can advise you accordingly.