Operating as a landlord in the UK, by far the biggest potential expense which you will face is hiring an estate agent to manage your property on your behalf. While this can save you a great deal of hassle, as the agents would be responsible for collecting rent, organising repairs and maintenance and so on, it can often cost as much as 15% of a property’s monthly rent, regardless of whether the agents actually have any issues to deal with.
Luckily it is completely feasible for a landlord to manage their property without an agent’s help. There are a number of websites which allow landlords to find tenants free of charge, and of course anyone can book a tradesman to amend a maintenance issue. Other than that, a landlord simply needs to keep their property up to standards, have a clear line of communication to tenants and ensure that deposits are held in a secure government approved scheme. Remember, the less that your tenants have to complain about, the easier it will be to manage your properties!
Before renting your property out to new tenants it is important to make sure it meets minimum standards. This will include:
Other requirements, such as having landlords insurance, are not strictly mandatory. However, they are still highly recommended if you want to avoid potentially expensive disasters down the line. Certain optional conditions may also be imposed by a mortgage provider.
Before putting your property on the market it will also be important to resolve any existing property hazards. The Housing Health and Safety Rating System outlines a number of categories, such as psychological requirements and protection against infection, which contribute to the general well being of tenants. If you fail to meet these requirements and put your tenants in danger, your local council will be well within its rights to undertake the necessary repair work and bill you for it later on. This is particularly important for landlords managing multiple properties, as if they are caught knowingly renting out properties with serious hazards then they could find themselves with six figure fines!
It can also be worth thinking about whether your property looks its best. If there are any aesthetic defects such as broken tiles or peeling wallpaper, fixing these in advance can help you secure tenants. Too many of these faults could turn people away, or even leave them with a way to argue for lower rent payments.
Keep in mind that new problems may well arise during your tenant, either at the fault of your tenants or simple rotten luck. As a landlord it is your responsibility to respond promptly when an issue is reported. It will not be your tenant’s responsibility to pay for damage caused by your failure to respond, so do not make the mistake of thinking that you can leave something unfixed and then take money from the deposit to pay for it down the line.
Many landlords will argue that, while having an estate agent manage your property can be expensive, it can still be worth having them find tenants. An estate agent can market your property, find and interview prospective tenants, collect rent and deposits and even arrange a tenancy agreement on your behalf.
That being said, there are plenty of ways for a landlord to find tenants without this kind of help. Websites like Spareroom allow landlords to advertise vacancies virtually free of charge, while local property websites can give you an excellent idea of how much you can get away with charging in terms of rent.
Start by spending some time on online property websites like Zoopla. This should give you a good idea of how best to advertise your property in terms of:
It is worth taking a particularly long time to consider how much you want to charge in monthly rent. Try to be realistic, as your candidates can always look elsewhere. This will help to decide how large of a deposit you want to charge. While the standard is four weeks’ rent, many modern landlord charge as much as 50% on top of this. Keep in mind that if your property is in a low income area, most prospective tenants may not be able to afford to pay deposits above a certain amount.
You should also use caution when it comes to choosing tenants for your rental property. You want to find candidates who will take care of your property, pay rent on time and not land you in any kind of legal trouble. An estate agency can handle this vetting process on your behalf, even when it comes to processes like credit checks. They can also take care of tenant interviews and property viewings, which can be particularly awkward to organise for landlords with nine to five jobs.
Again, this is not mandatory, so you should be ok as long as you have a comprehensive tenant interview checklist. This should include:
Remember, evicting tenants can be a painful and expensive process. It is better to take another week to find the perfect tenants than having to deal with major repairs and a tiresome eviction because you were too eager to hand your keys over.
After you have vetted your tenants and interviewed the ones you like, it is time to put everything in writing! A written tenancy agreement will outline all the important details of property care, such as rules on smoking and when rent is due. This is a task which really is best suited to a professional; one who will not miss anything out and leave you vulnerable to cowboy tenants. If you do choose to write it yourself, keep in mind that the law will supersede any clauses which you add. In other words, you cannot trick a tenant into giving up their rights to a safe rental property just by getting their signature!