There is a multitude of reasons why you might need to rent your property out. Perhaps you are moving house for work but want to retain your property for the future. Maybe you are simply expanding your property portfolio as a means of diversifying your income.
Whatever your reasons for wanting to rent out your property, be aware that there are a number of steps you must take before you are able to legally rent out your home.
In this article, I will explore some of the steps you should take before renting out your property.
Things you must do before renting out your property.
Do your research
There is a lot to know before you rent out your property and ignorance is not an excuse when it comes to your obligations as a landlord. First of all, work out what level of rent your property can command in order to ensure that renting out your property makes financial sense for you. Additionally, make sure you factor in tax (more on this later) and landlord insurance. Once you know that renting is the right option for your you can then get started with the process of renting out your property.
Find the right tenant
Finding the right tenant is so important as an unsuitable tenant has the potential to cause you a lot of stress and heartache. When finding a tenant background checks should be considered essential as a trip to court to recover unpaid rent can be costly and there are no guarantees that you will ever be recompensed. Save yourself the headache by undertaking thorough background checks on prospective tenants. Furthermore, in England, you must check that your tenant has the right to rent. More information can be found here: https://www.gov.uk/check-tenant-right-to-rent-documents.
Consider landlord insurance
While landlord insurance is not mandatory most buy-to-let mortgages come with the condition that you have it. Landlord insurance is an excellent idea because it can help with a lot of the legal difficulties you could get into as a landlord.
Protect your tenant’s deposit
You must place your tenant’s deposit in a government-backed tenancy deposit scheme in order to keep it safe. Your tenant will get this back as long as they meet the terms of their tenancy agreement, don’t damage the property and pay their rent and bills.
Consider using a letting agent
A letting agent can take away a lot of the pain of being a landlord. A letting agency can be responsible for selecting tenants, performing background checks and ensuring that your property meets all necessary safety credentials.
Make sure your property meets the necessary safety credentials
It is absolutely vital that you ensure that your property meets all the necessary health and safety credentials. This includes fire, gas and electrical safety. Failure to comply with these obligations could result in a hefty fine or even a criminal record.
Ensure your property is clean
Get the tenancy off to a good start by making sure that the property is nice and clean for their arrival. No one wants to move into a dirty property and cleaning your property shows your tenants how it should be left at the end of their tenancy.
Remember your financial responsibilities
Landlords are obligated to pay tax on rental income in accordance with UK Government requirements. Furthermore, you must notify your mortgage provider that you are renting out your property so that they can provide you with a buy-to-let mortgage rate.
Things to bear in mind if you decide to sell
It may be the case that renting your property is not for you and you would rather sell up. You may consider putting your property on the market or consider selling to a professional home buyer (such as LDN Properties).
Also, don’t forget that you should make sure that you have a clause in your tenant’s contract which states that your tenants must permit you to carry out viewings. Selling with sitting tenants can be tricky, so be respectful when arranging viewings.
Whether you decide to rent or sell, it is vital that you know what is expected of you as a landlord in order to stay on the right side of the law.