Top tips for new landlords

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There’s strong demand for rental property here in the UK, meaning now could be a great time to take your first steps into the buy-to-let market and become a landlord or landlady.
 
Of course, investing in something like property does carry a great deal of responsibility. We can do our bit to help by arranging landlord insurance that takes into account your individual needs. We offer a range of cover options, including buildings insurance, property owner’s liability, accidental damage and malicious damage by tenants.
 
Whether you’re planning on renting your property to residential or commercial tenants, here are some top tips we think you’ll find useful:
 

Location, location, location

 
If you’re yet to purchase a property, it’s crucial you spend a good deal of time researching the right location to buy in. Understandably, location plays a huge part in attracting the right type of tenants. Some things to consider include:
 

  • Is the property close to public transport links? This is a must if you’re thinking about letting the property to working professionals.
  • What are rental yields like in the area? Find this out with a quick Google search.
  • If you’re planning on renting to students, is the property conveniently located close to the university, or at least near to public transport links?
  • If you want to rent to a family, is the property in a reasonably quiet area, near good schools and shops?
  • What reputation does the area have – i.e. are crime rates low? This will be an important consideration for many tenants.
  • If you’re thinking about renting to commercial tenants, you obviously want to buy in a commercial area that will appeal to prospective businesses.

 

Be thorough with tenant screening

 
When you’ve picked your ideal location and purchased your property, it’s time to find suitable tenants to let that property to.
 
As My Smart Move explains, screening tenants will increase your chances of finding quality tenants who’ll pay rent on time and look after your property as if it were theirs. A thorough tenant screening process involves things like a consumer credit report, criminal records search, eviction records search, sex offeder registry search, and provide income insights.
 
To attract decent tenants, make sure you list the property online with all the details they’ll want to know, including:
 

  • Rental price
  • Number of bathrooms and bedrooms
  • Amenities (for instance washer and dryer, dishwasher, garden, etc.)
  • Nearby attractions

 
The more information you can give, the better. Good quality photographs will really help to sell your property, too – make sure you get snaps of every room.
 

Know the rules

 
As the Gov.UK website outlines, landlords have a number of legal obligations when letting out their properties. For instance, you must:
 

  • Ensure your property is safe and hazard-free.
  • Ensure all gas and electrical equipment is safely installed and maintained.
  • Provide an Energy Performance Certificate for the property.
  • Protect your tenant’s deposit in a government-backed scheme.
  • Check that your tenant has a right to rent the property.
  • Provide your tenant with a copy of the How to Rent checklist when the tenancy begins.

 
In terms of fire safety, you’re responsible for fitting and testing smoke alarms and carbon monoxide alarms within the property. Then, when it comes to financial responsibilities, you must pay Income Tax on your rental income, minus the day-to-day running expenses, and pay Class 2 National Insurance if the work you do renting out property counts as running a business.
 

Be thorough with your inventory

 
As Simply Business notes, doing the inventory yourself is very straightforward – but you’ll need to complete it on or just before your tenant moves in, with them present. Here’s what you should do:
 

  1. Prepare an inventory template which includes all ‘fixed’ features (such as walls and doors) in the property, a full list of contents (remembering things like paintwork and carpet), and a comment on the overall condition of the property.
  2. Work through the inventory item by item, remembering to check things like garden features, sheds and garages.
  3. Flag issues on your inventory template, and record the condition of each item – for instance, if there’s a scratch on one of the bedroom doors, or if the sofa is brand new. Taking photos and even videos could prove invaluable here, as it’ll allow you to make direct comparisons when you carry out inspections later down the line.
  4. Once the inventory is up to date with everything covered, and your tenant is happy with it, you’ll both need to sign it off. Give your tenant a copy for their records.

 
And some other things to bear in mind…
 

  • Once the tenancy begins, you should schedule in inspections once every three months. Bear in mind that your tenant has a right to be given 24 hours’ notice before you arrive at the property.
  • Understand that there’s a difference between damage and ‘wear and tear.’ The walls might become marked and the carpet more worn – you can’t penalise the tenant for this.
  • Agree on your damages procedure. If damage occurs, you can estimate costs for repairs or replacement. Let your tenant know and update your tenancy deposit scheme to allow for the deduction to be applied.

 

Take out quality landlord insurance

 
If you rent out a property, then you need specialist landlord insurance. To make sure you protect your property with the right level of cover, we suggest you turn to the specialists here at Insurance Choice Commercial.
 
We have more than 20 years of experience in providing landlords and landladies with cover, tailored to meet their individual or business’ needs, all for a competitive price. The types of landlord insurance policies we offer include:
 

  • Buildings
  • Malicious damage by tenants
  • Unoccupied properties (pending let or sale)
  • Property owner’s liability
  • Loss of rent
  • Accidental damage
  • Landlord Contents
  • Legal Expenses Cover

 
When it comes to landlord insurance, we understand that one size doesn’t fit all. That’s why we’ll work closely with you to understand your needs, before finding a policy to suit. We also offer flexible payment solutions if you want to spread the cost of cover over monthly instalments.
 
Protect your rental property today with cover from Insurance Choice Commercial. Get a competitive quote today

 

Frequently asked questions

 

How do I research the market as a new landlord?

As a new landlord in the UK, researching the market is paramount to making informed decisions. Start by analysing local property trends, including average rental prices and occupancy rates, which can be found through estate agents and online property portals. Attend local property auctions and networking events to gain insights from experienced landlords. Additionally, consult regional housing reports and government data to understand legal obligations and tenant demographics. Engaging with local landlord associations can provide valuable advice and support. By leveraging these resources, you can build a comprehensive understanding of the market dynamics and position yourself for success.

How do I screen tenants appropriately as a new landlord?

As a new landlord, screening tenants appropriately is crucial to ensure a harmonious and financially stable rental experience. Start by conducting thorough background checks, which include credit history, employment verification, and previous rental references. Utilise a standardised rental application form to gather consistent information from all applicants. Additionally, interview potential tenants to assess their suitability and reliability. It is also advisable to be aware of fair housing laws to avoid discriminatory practices. Implementing these steps meticulously will help in selecting responsible tenants and safeguarding your investment.

How can I make the terms of my tenancy agreement clear to my new tenants?

To ensure the terms of your tenancy agreement are clear to new tenants, it is imperative to adopt a comprehensive yet understandable approach. Begin by drafting the agreement in plain, straightforward language, avoiding legal jargon that may confuse tenants. It is beneficial to organise the document with clear headings and bullet points for easy reference. Before the tenancy commences, arrange a meeting with the tenants to walk through the agreement together.

This provides an opportunity to explain each clause in detail and address any questions they may have. Emphasising key obligations and rights, such as payment deadlines, maintenance responsibilities, and notice periods, will help prevent misunderstandings. Additionally, providing a copy of the agreement for the tenants to review in their own time allows them to fully comprehend the terms they are agreeing to.

Do I need to make an inventory report for new tenants as a landlord?

As a landlord, creating an inventory report for new tenants is a prudent practice. This document serves as a detailed record of the property's condition and contents at the time of tenancy commencement. It provides a clear benchmark, which helps in resolving any disputes over damages or missing items that may arise at the end of the tenancy. Moreover, it ensures that both parties have a mutual understanding of the property's state, safeguarding your investment and fostering a transparent landlord-tenant relationship. While not legally mandatory, an inventory report is highly recommended to protect your interests and maintain professional standards in property management.

Should I use a deposit scheme as a first time landlord with rental properties?

As a first-time landlord with rental properties, you can use a deposit scheme. Such schemes not only offer a structured and secure way to handle tenant deposits but also provide legal protection for both parties involved. In the UK, your landlord must put your deposit in a government-approved tenancy deposit scheme (TDP) if you rent your home on an assured shorthold tenancy that started after 6 April 2007. Employing a deposit scheme also enhances your credibility as a landlord and can make your property more attractive to potential tenants, knowing their deposits are safeguarded.

How often should I complete maintenance on my rental property as a first time landlord?

As a first-time landlord, it is essential to establish a regular maintenance schedule for your rental property to ensure its longevity and tenant satisfaction. A bi-annual maintenance check is generally recommended, encompassing critical inspections of plumbing, electrical systems, heating, and air conditioning units. Routine maintenance not only helps in identifying potential issues early but also in maintaining a good rapport with tenants, thereby enhancing your reputation as a responsible landlord.

What is the state of the current rental market in the UK?

The current rental market in the UK is experiencing a period of heightened demand, resulting in increased rental prices across many regions. This surge is primarily driven by a shortfall in housing supply relative to the growing demand, especially in major cities and surrounding areas. The competition among renters remains fierce, with properties often receiving multiple applications shortly after listing. This scenario has placed significant pressure on affordability, prompting concerns about the long-term sustainability of the market. Additionally, regulatory changes and the economic impacts of recent global events have introduced further complexities into the rental landscape, influencing landlord decisions and tenant experiences alike.

Should first time landlords hire a managing agent?

Navigating the complexities of property management can be a daunting task for first-time landlords. The decision to hire a managing agent is one that can significantly alleviate the administrative and operational burdens associated with leasing property. A managing agent can bring a wealth of experience, ensuring compliance with legal requirements, efficiently handling tenant queries, and effectively managing maintenance issues. This professional guidance not only enhances the tenant's experience but also optimises the rental income potential for the landlord. Therefore, investing in the services of a managing agent may be a prudent choice for those new to the landlord realm, seeking to ensure their investment is both protected and profitable.