9 things to consider before renting your property
When you’ve bought a rental property, it’s understandable that you want to waste no time in installing tenants so you can begin to realise a return on your investment. However, the old saying ‘marry in haste, repent at leisure’ could be applied equally to tenants: it’s much, much better to take your time in choosing suitable people and ensure the property is fully ready than to rush into a tenancy.
Let’s look at nine top considerations you should think about before letting your property.
- Find out about landlord and tenant law
You don’t need to go to law school to understand the basics. You should know what your legal obligations are to your tenants, what your rights are if you need to evict them or end a tenancy, and what possible grounds a local authority might have for taking action against you. Some of the main problems can be headed off simply by keeping the right paperwork, so don’t ignore this important aspect of being a landlord.
- Do you need a house of multiple occupation (HMO) licence?
If you intend to let a property to more than two people who are not related to each other, it will probably be classed as an HMO. This type of property has a different risk profile, so there are special rules around areas like fire safety. You will need to comply with HMO Management Regulations, as well as any local council amenity standards that apply. Some local authorities require HMOs to be licensed, with substantial fines if you break the rules.
- Get gas and electricity certificates
It is your responsibility to hold gas and electrical safety certificates, which must be renewed annually. Installations such as gas fires should also be checked and any defects rectified without delay.
- Ensure the property is safe
In your own home, you might be comfortable telling visitors to watch the wobbly step or take care with a dodgy door; in a rental property defects can lead to legal claims and deductions from your rental income. Tenants can take you to court to force you to carry out repair work, or deduct the cost of work from their rent if they follow the right procedure. You may also be in trouble with the local authority if the property does not meet minimum standards.
- Choose the right tenants
Inexperienced landlords often learn the hard way that having reliable, responsible tenants is very important. Don’t fall for sob stories about needing a place to stay urgently, or delay in paying the deposit or rent. Invariably, you will end up out of pocket. Check tenants’ identity, employment status and credit history carefully.
- Protect the tenancy deposit
By law, the tenancy deposit must be paid into one of three protection schemes recognised by the government. If you fail to do this within 30 days of receipt of the payment, you could be taken to court and ordered to pay up to three times the deposit as a penalty.
- Beware of vanishing tenants
If your tenants seem to have disappeared, when do you change the locks and find another tenant? Be careful in this situation; the tenant might be in hospital, or prison, or might have gone travelling without telling you. There is a formal procedure for repossessing a property and if you fail to follow it, tenants could sue. Dishonest tenants sometimes trick landlords into repossessing, so make sure you do not fall into the trap.
- Act promptly on rental arrears
Your tenant might have an excellent excuse for falling behind with rent: they have lost their job, or are awaiting payment for a contract, or had to make an emergency loan to a family member. As hard-hearted as it may seem, this is not your responsibility. Act quickly to begin the repossession process if tenants fall behind on rent; very often, the money mysteriously appears once you send a legal notice.
- Choose your letting agent carefully
You trust letting agents with your investment, so take the time to make sure you have one that will live up to your expectations. Indications of a good agent include membership of a professional body, responsive and friendly customer service, and fair terms and charges. You are legally responsible for what the agent does (or doesn’t do) on your behalf, so it pays to choose wisely.
Being a landlord is not without risk – do you have the right insurance to protect your investment? Stride can help, why not talk to the team today.