With low interest rates, house price growth and demand for rental properties now higher than ever, more and more people are considering a buy-to-let opportunity. So we’ve put together a helpful guide to letting a property.
1. Establishing a letting strategy
Whether you have decided to rent out a home you already own, or have purchased a property especially for rental purposes, you will need to plan your approach. You should first consider what type of tenant to target. Think about where your rental property is located and the type of person that would most likely want to rent in this area.Does the area have a university that will mean there are lots of students looking for accommodation there, or is it close to good transport links attracting professional commuters?Once you’ve decided which type of tenant you want to attract, you should consider tailoring the property in a way that might appeal to them. However, it is important to remember to keep your property flexible and decoration neutral to prevent alienating other types of individual who may be thinking of renting in your area.
– How you will present the accommodation.
– How you will promote the property e.g. its proximity to good schools / lively nightlife.
– How you will let it – as a single unit or to multiple tenants e.g. students.
– The cost of running your rental property and the rent you will charge.
– If you’ll manage the marketing and maintenance yourself, or through a lettings agent.
The answers to these questions will help you formulate a basic strategy for your rental property.
2. Important considerations
Before you can market your property for rental purposes, you will need to:
– Consider your mortgage. If you are thinking about letting a property that has previously been occupied by an owner-occupier you will need to inform the current mortgage lender that tenants will be living in the property. In most instances you will be required to switch to a buy to let mortgage.
– Get specialist landlord insurance, you will not be covered by regular household insurance.
– Let your freeholder (if you have one) know that tenants will be living in the property.
3. Appointing a letting agent
The amount of commitment and work involved in letting property should never be underestimated and the majority of landlords choose to use a professional letting agent to help with the various requirements of being a landlord.Using the services of a professional letting agent takes away the stress and strain of finding a tenant, negotiating rent and dealing with on-going maintenance requirements.
– Promotion of your property through online and offline marketing methods.
– Conducting viewings and negotiating the rental price with tenants on your behalf.
– Checking tenant’s identification, references and credit status.
– Collect the rent on your behalf.
– Sort out any maintenance issues that may arise within your property.
– Organising tenancy agreements, inventories and deposit schemes.
– Provide professional guidance and advice.
Countrywide has a market leading network of letting agencies across the UK waiting to help you let your property. Find a letting agent near you.
4. Preparing your property to let
When looking to let your property it is vital that you present it in the most attractive way possible and you should carefully maintain its condition for each of your viewings.
– Ensure gardens are neat and tidy – mow the lawn and weed the flowerbeds.
– Give window frames and doors a lick of paint.
– Ensure rubbish bins are not visible.
– De-clutter by removing personal items. Arrange self storage for any larger items of furniture you do not wish to keep in the rental property.
– Clean the property thoroughly and ensure it smells fresh.
– Repair leaky taps or cracks in the walls.
– Decorate rooms in a neutral colour.
5. Cost of letting your property
Letting property is not a licence to print money, you should be prepared to incur costs throughout the tenancy. Remember, even when your property isn’t occupied, you will still need to pay the mortgage and council tax.The following costs should be considered:
– Refurbishment costs.
– Safety inspection costs.
– Energy Performance Certificate.
– Monthly mortgage repayment (if you have one).
– Ground rent and service charges if you are letting a leasehold property.
– Income tax.
– Letting agent and management fees.
– Maintenance costs.
– Professional fees e.g. preparation of inventories etc.
6. Legal responsibilities
The law requires landlords to maintain their property and undertake any major repairs that are required.In addition, there are special rules that apply:
– Energy assessments – Landlords in England and Wales who are letting or re-letting their property for the first time are now required to present an Energy Performance Certificate (EPC) to tenants. Book an EPC today.
– Gas – Landlords need to ensure that every gas appliance and all gas pipe work meet the required safety standards. With effect from the 1st of April 2009 Capita Gas Registration and Ancillary services will be responsible for the registration of gas engineers. Landlords are required to present a gas safety record of the property being let.
– Fire – In accordance with the Furniture & Furnishings (Fire) (Safety) Regulations 1988 it is an offence to let a property with any furniture or furnishings that do not comply with safety regulations. Escape routes should be identified and explained to the tenants so that they are fully aware of the quickest way to exit the building should fire break out. Emergency lighting may be needed in larger properties or properties with many storeys.
– Smoke detectors – Properties built after June 1992 must have mains operated smoke detectors fitted on each floor. Landlords should advise their tenants to regularly check that all smoke alarms are working properly.
– Fire safety equipment – Fire extinguishers and fire blankets should be supplied but tenants should be made aware that these are for small fires. This equipment should be regularly checked and safety certificates proving their effectiveness made available.
– Electricity – Landlords are responsible for all wiring and need to obtain safety certificates for all electrical equipment within their rental property to prove it is safe and will not cause danger.
Lettings legislation changes constantly, Countrywide lettings consultants will be able to provide you with information about all of your legal responsibilities