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Are you looking to become a UK landlord? You have your work cut out for you!

Some picture landlords as being able to sit back, roll in the dough and let tenants take care of themselves. Unfortunately, this is easily one of the biggest misconceptions about property management.

You have been warned!

While the demand for properties to rent is certainly there, and definitely growing, landlords still have a lot to deal with when it comes to organisation, safety, advertising and ongoing maintenance - and that’s even before finding tenants!

Do you have the right documentation? The right licences? Landlord insurance? Are your properties 100% safe? Can you run things yourself, or do you need the help of a property manager? A good landlord needs to have all of this and more down to a tee if they want to be successful at what they do.

Of course, there will always be landlords who flout the rules and focus purely on brass tacks. Unfortunately for them, the property market is changing. Organisations like Shelter are working tirelessly to educate tenants on their rights, while the widespread use of camera phones has made it easy for tenants to document issues as soon as they appear.

So, what do you need to know about becoming a successful UK landlord? It will certainly help to have a checklist for your first property let, as well as a clear understanding of your responsibilities as a landlord going forward.

As you gain experience in managing properties and screen prospective tenants, you will soon learn the value of having a solid framework in place. While it will be a good idea to do as much research as you can, a successful landlord also knows that some of the most important lessons can only be learned through experience.

So, let’s have a look at what it takes to become a successful UK landlord!

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Getting started as a landlord

The first point on your checklist should be to find out what the rules are for landlords in your local area. Regulations can vary considerably not just between the countries in Great Britain but also local constituencies. 

For example, in most areas you would only need a landlord licence if you were operating a large HMO. However, many councils now require all HMO landlords to purchase licenses. Others have introduced ‘additional’ and ‘selective’ licences, designed to hold all landlords accountable.

The second point on your list should be securing all the necessary documentation. In order to successfully let a property, there are a few key certificates which a landlord cannot do without:

  • Energy performance certificate (EPC) - This document will describe your property's energy efficiency and rank it from A to G. Keep in mind that EPCs are mandatory - you cannot legally market your property until you obtain a valid certificate. Just in case you ever decide to increase your rating, the EPC will also suggest appropriate improvements for your property, such as installing loft insulation or double glazing. A qualified energy assessor or electrician can create an EPC and the document will be valid for ten years. In most cases a property must have an EPC rating of E or above before it can go on the market.
  • Gas safety certificate (CP12) - If your property contains gas appliances, flues or utilities, they will all need to be in safe working order. You can ensure this by booking a landlord gas safety check with a heating engineer listed on the Gas Safe Register. Once this is completed, you will be given a gas safety certificate, which you must keep a record of for at least two years. A copy should also be sent to new tenants before they move into your property, or to current tenants within 28 days of you receiving it. It will be mandatory for you to book a gas safety check at least once every 12 months.

There is additional documentation when it comes to your tenants, but we’ll get to that later on.

While it will be a good idea to do as much research as you can, a successful landlord also knows that some of the most important lessons can only be learned through experience.

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Safety for landlords

When a landlord lets a property, they are responsible for ensuring that it is sufficiently safe for tenants. A negligent landlord can receive substantial fines or even jail time for putting their tenants in danger.

  • Gas safety - We may have already covered this, but there is one more rule for you to keep in mind: only Pros listed on the Gas Safe Register are legally allowed to perform gas related work. If you try to cut costs by having an unregistered tradesmen perform gas work at your property, you could put your tenants in serious danger!
  • Fire safety - Any landlord who ignores fire safety is inviting disaster. Rental properties must contain smoke alarms on every floor, a carbon monoxide alarm in any room containing solid fuel burning appliances and clear escape routes for emergencies. Any provided furniture must also be sufficiently fire proof. Keep in mind that there are even more rules to consider for HMOs, along with properties in Scotland.
  • Electrical safety - In Scotland, landlords are required to book an ‘Electronic Installation Condition Report’ at least once every five years. This also applies to HMOs anywhere in the UK. For non-HMOs in England, Wales and Northern Ireland, landlords must simply ensure that any electrical installations and appliances supplied with the property are in safe working order.

The Housing Health and Safety Rating System (HHSRS) outlines 29 ‘property hazards’ which can be used to gauge whether tenants are in danger. It is worth familiarising yourself with these in order to make sure that your property is completely safe. 

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Property managers

By this point, you’ve probably realised that working as a landlord requires a great deal or organisation, even before you have tenants! Luckily, if it seems like too much then you always have the option of hiring a residential property manager.

A ‘property manager’ is a mix between a landlord and an estate agent. In addition to helping to advertise your property and find tenants, they can also take care of rent collection, maintenance and everything else going forward once a tenancy begins.

However, these services do not come cheaply. Depending on where your property is located and the extent of the services you require, hiring a property manager could cost up to 15% of your monthly rental income!

So, do you need a property manager? It ultimately comes down to time and experience. The majority of landlords only own one or two rental properties - certainly not enough to make a living off of their lets. Indeed, most landlords will also have their own day jobs or businesses to run. 

Because most landlords do not make a career of what they do, they will often lack the time to manage their properties, along with the experience to know what needs to be done. You may even be a first time buyer yourself! 

In short, the question of whether or not you need a property manager will depend on whether or not you are happy to do everything yourself. When you are first starting out and learning the ropes, hiring a bit of help could be exactly what you need.

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Advertising your property

Now that your property is safe and certified, it’s time to think about how to find the best tenants. Let’s take a second to consider what makes a property attractive:

  • Cleaning - Nobody wants to live in a pig stye! A clean property will impress potential tenants and make you look like a landlord who actually cares. While you can do this yourself, you may also want to consider hiring a professional cleaner. This is simply a matter of being thorough: once the cleaner is finished, you can mark your property as ‘professionally cleaned’ on the inventory report. This will require tenants to return it to this standard by the time they move out.
  • Decorating - While there is no law saying that a rental property has to be freshly decorated, it should go without saying that peeling paintwork and filthy flooring will be sure to put tenants off! If there are any rooms which are letting the side down, consider updating them with some fresh decor. Keep in mind that the two most important rooms in a property, and those most likely to either impress tenants or put them off, are the kitchen and bathroom. These should both be up to a good standard before you start looking for tenants.
  • Furnishings - Whether or not you want to advertise your property as ‘furnished’ is up to you. Many tenants looking for long term lets will be happy to pay for their own furniture, as it will make the property seem more like a ‘home’ to them. If you do decide to provide furniture, you will need to make sure that it is all of a decent quality. That is not to say that everything has to be new; you could furnish your property cheaply by looking at second hand pieces or simply waiting for an event like Black Friday.
  • Photographs - These days, the vast majority of rental properties are advertised online. The first impression that potential renters get of your property will come from these ads, so it will be important to make sure that all of the pictures are of a decent quality! Most modern camera phones will suffice, though if you are planning to let the property for the foreseeable future then it could be worth hiring a professional photographer. They can provide excellent pictures that you can continue to use whenever you need to find new tenants.

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Landlord insurance

A lot of things can go wrong when letting a property. You may suddenly find yourself with a bill for major repair or maintenance work, or problem tenants could start falling behind on the rent.

When disaster strikes, landlord insurance can keep your most important asset, your property, safe. This may seem like an unnecessary expense, but the golden rule of insurance is to be ready for the worst!

It is also worth pointing out that most buy-to-let mortgage providers will require policyholders to take out landlord insurance. After all, lenders do not want to risk putting their repayments in danger!

A typical landlord insurance policy will cover:

  • Damage caused by tenants
  • Non-payment of rent (vital when making repayments for buy to let mortgages)
  • Liability for accidents on the property
  • Loss of earnings
  • Rehousing costs

Remember, if you want to find the most appropriate insurance policy for you it will be a good idea to speak to an independent insurance broker. Unlike a bank or an estate agency, an independent agent can give you an unbiased view of the market and find a deal to suit your circumstances.

When disaster strikes, landlord insurance can keep your most important asset, your property, safe.

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Finding and screening tenants

It looks like you are finally ready to start finding tenants! However, at this point it is worth bringing up property managers once again. Why? Because finding top notch tenants is one of the main reasons landlords hire them!

Having a professional on hand at this point offers several advantages:

  • Time - Unlike most landlords, estate agents and property managers can make advertising a property their full-time priority. This includes being able to conduct viewings throughout the day. They will also have an efficient system for screening tenants, so that when a top candidate comes along you can have them ready to move in as quickly as possible.
  • Knowledge - A professional will be able to give you an accurate picture of what the local rental market looks like. This can help you to make your property appeal to the right tenants. For example, there may be a huge market of young professionals in the area, or the market could be dominated by families.
  • Online experience - Websites like Rightmove and Zoopla only allow estate agents, rather than private landlords, to advertise rental properties online. These agencies will have subscriptions already in place. Real Pros will also know where to employ email marketing, social media and other tools to help you find top tenants faster.

When the time comes to actually screen your tenants, it will be important to have a clear tenant interview checklist. The very best tenants will not only pay rent on time, but also keep your property clean, inform you of any maintenance issues and, ideally, stay for a number of years. If you do not take the time to screen your tenants now, you could seriously regret it later on!

The most important thing to check will be your candidate’s ‘right to rent’. This essentially means that your tenants can legally rent property in the UK. Failing to check this is considered a criminal offence worth up to five years in prison!

This rule applies to all renters, not just immigrants. For tenants born in the UK, a passport, birth certificate or any other proof of identity should be sufficient. Other tenants will need to provide their immigration documentation (and that of anyone over the age of 18 who will be living with them).

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Final documentation

Once you have chosen your tenants, it’s finally time to make things official. To do this, you will need two key documents:

  • Inventory report - While inventory reports are not mandatory, you would be a fool to ignore them. An inventory report will document the contents, cleanliness and overall quality of a property. Once the document is signed, it will be taken as proof of the property’s condition at the start of a tenancy. This will allow a landlord to hold tenants accountable if they break anything, forget to clean or let the property fall into disrepair. In turn, this will help the landlord to legally make deductions to their tenants’ deposit. Remember, the burden of proof is usually on landlords; if you cannot prove that deductions are necessary, your tenants will likely get their entire deposit back.
  • Tenancy agreement - This is essentially the contract for the tenancy, outlining how much rent will be paid and when, what your tenants’ responsibilities are and so on. 

When it comes to creating either document, we strongly recommend hiring a professional estate agent or property manager. Not only will they be thorough, they will also be able to create the documents in an appropriate format. 

Crucially, they should also have systems already in place for creating these documents, allowing them to have them finished quickly so that your tenants can move in (and you can start making money!)

Remember, your tenants will need to be given their own copies of any signed documentation. You can make this easier by keeping digital records, as this will allow you and your tenants to access the documents at any time.

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Managing deposits

Let’s make one thing clear: a tenant deposit does not become the property of a landlord once it is paid! Instead, a deposit is a nest egg that can cover the cost any necessary repair or maintenance work once a tenancy comes to an end.

All deposits must go into a government-approved deposit protection scheme:

  • Deposit Protection Service
  • MyDeposits
  • Tenancy Deposit Scheme

It does not matter if you keep the entire deposit safe in your own account: you would still be breaking the law and opening yourself up to serious financial penalties.

Once the deposit is correctly stored, you must deliver details about the scheme to your new tenants.

The scheme will not only keep the deposit safe, it will also act as an adjudicator if there are any disagreements about deductions.

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