Buy to let landlords have been accused of many things including the mass purchase of first time buyers homes and causing drastic house price inflation.
Although more of us now know someone who is a landlord, the number of rented properties in the UK is only around 6%. Over 40 per cent of buy-to-let investors own just one property, and three quarters have four or fewer. Private Landlords also assist local authorities by providing accommodation for over 15 per cent of tenants on state benefits.
So how do you ensure that you are one of the better landlords?
The first thing to do is to ensure that you fulfill all your legal obligations.
- Before accepting a tenant you need to ensure that gas appliances must be checked by a qualified Corgi professional, and electrical appliances should be regularly checked by a qualified electrical engineer to ensure the gas and electricity systems comply with health and safety regulations. In addition, since October 2008 energy performance certificates are a legal requirement and need to be available for your tenant to view prior to the start of their tenancy.
- If you are renting the property furnished, the furnishings must comply with fire and safety regulations.
- Once you have accepted a tenant it is a legal requirement to ensure that your tenants’ deposit is insured and protected by a tenancy deposit.
- Check with your accountant on the tax rules when you are a landlord.
- If you have a mortgage on your flat you will need to check with your Mortgage Company. Some lenders will not need you to switch to a “buy to let” mortgage but others may.
- If your property is leasehold, then you need to obtain permission from your freeholder.
Next make sure your property is in “tip top” condition, make sure the heating works, the shower or taps do not drip, the windows are sealed. The better tenants expect everything to work, and if they have problems with your property, you will find they will not stay. Once you have found your tenant you need to arrange an assured shorthold tenancy
When you take your tenants deposit you are required to place it in tenancy deposit protection scheme and you must be able to provide the tenant with details of the scheme within 14 days of taking the deposit.
Penalties for not complying with this legal requirement are stern – a court can order a landlord to repay the deposit plus a fine of up to three times the amount of the deposit. Also landlords who have not signed up for the scheme may find it more difficult to evict tenants with whom they have a dispute.
For information about being a landlord and gain access to facilities join a landlords’ association, such as the National Landlords Association, or sign up to a local authority-run landlord accreditation scheme.
Finding good tenants can be trying at times, however firstly think about the type of tenant you are looking for, maybe ask friends where they would look to find a rented property, i.e website or newspaper. Once you have located a tenant you need to run security checks, like a credit check, who will ensure the person applying for the tenancy is who they say they are, that they can afford the rent and whether they have found themselves in financial difficulties in the past.
Once your tenant moves in, even if you are using a letting agent it is worth making yourself known to your tenant. Most problems with tenanted properties occur within the first few months. Prepare yourself by compiling a book of procedures on appliances for your tenant; provide copy instructions for the oven, shower, heating to ensure they know how everything works.
Although the property remains yours, when you are a landlord you must respect your tenants privacy, if you need to visit, call first to make an appointment. As a landlord you cannot enter the flat without the tenants permission or when they are not there.
As a first time landlord you may prefer to use the facilities of a letting agent – which may be a better way of “cutting your teeth” at being a landlord, you will see the problems that may occur and how your agent deals with them.
