There are a number of reasons people consider becoming a residential landlord.
Often, it’s because someone wants to do more with their savings and sees property as a sound investment with a regular income. Or a person becomes an accidental landlord after inheriting a property or moving into a house with a partner.
However, while the allure of consistent rental income is certainly appealing, there are several things you need to consider before you begin your property portfolio.
Here are seven things to think about when becoming a landlord in Peterborough.
How to Become a Landlord of a Rental Property in Peterborough
Set-up costs
Finances matter, the numbers have to stack up. If you’re going to obtain a buy-to-let mortgage, the mortgage lender needs to know about your income and what rent you hope to achieve.
They have to ensure that you can cover the costs. You’ll probably have to pay for surveys, too, so they can be sure the house is worth what you think it is.
Then there are the legal fees and the search costs. Many law firms who specialise in conveyancing will be able to give you an early indication of what your final bill will be.
DIY or use a letting agent
You could manage the property yourself – and many landlords consider this as it can help reduce costs. However, you must make sure you have the time to dedicate to the management of the property.
Do you want to use a letting agency to find you a tenant and arrange the initial agreements? You can then keep on top of things for yourself. Or would you rather hand over all the management to the agency? Reducing the pressure on you is great, but there are costs involved with letting agent fees.
Landlord insurance
When you are renting out a property in Peterborough, you must obtain landlord insurance. This is because a home insurance policy will not cover you for what you need, and also because the right insurance will protect you, your property and your tenant.
If you’re taking out a mortgage to buy the property, your lender will insist that you have insurance. The costs of insurance will vary depending on the level of cover, such as personal liability, contents cover and buildings cover, and loss of rent cover, in the unfortunate event of unpaid rent. Speak with an insurer or a broker and be absolutely clear about what you need.
Furnished or unfurnished
Whether you rent out a fully furnished property or one that is unfurnished it is a decision you need to make early on.
If you’ve inherited a furnished property, then it might well be an easy decision. If this is the case, you might find this suits a potential tenant, and you will be able to get a better monthly rent.
Obviously, if you rent out an unfurnished property, it means you don’t need to buy things for it. Many potential tenants prefer this as they can put their own furniture in and make it their home. Don’t forget; it’s best practice to get an inventory carried out as this will affect your insurance policy and could minimise disputes at the end of an agreement with prospective tenants.
Paperwork
One of the top tips for being a landlord is to be well organised and up to date with paperwork from the start. It may seem daunting having a lot of documents, but organisation is key.
Not only will this ensure you don’t fall foul of any legal responsibilities, but it should also mean that if any disputes arise, you know straight away where things are. (It’s also particularly useful when you’re doing your accounts or checking information).
Plus, there won’t be any nasty surprises when you suddenly realise you need to pay income tax!
Legals & responsibility
There are certain legal obligations and responsibilities that need to be understood. These are in addition to the tenancy agreement that you and your tenant should be signing. For example, before a property is let, you’ll need an up-to-date Energy Performance Certificate (EPC) for it.
A gas safety certificate is required for each gas appliance in the property. Each home must have smoke alarms and a carbon monoxide detector. Plus, any appliances or furniture must meet the required safety standards. There are also rules about a tenant’s deposit and how it is kept in a Government-approved scheme. If you need help with any of these, we can advise you. Simply call us on 01733 555183.
Right to rent checks
A relatively new aspect of renting out a property in Peterborough is the need to carry out a Right to Rent check. A landlord must, by law, check whether a potential tenant has the legal right to rent a property in the UK.
Failure to carry out the required checks could result in hefty fines so if you do need advice, then contact us and we will be delighted to help.
What Next? Need expert advice?
Searching for advice on renting out your property? Contact our team on 01733 555183. Alternatively, email us at info@ptl-lettings.co.uk, or book a valuation and we will be delighted to help. We deal with every landlord independently to meet their needs.
In the meantime, here are the answers to the most frequently asked questions about becoming a landlord:
Frequently Asked Questions About Becoming a Landlord and Setting Up Rental Properties
You may be interested to read 8 Things UK Landlords Need To Know
Do I need a license to become a landlord in the UK?
In England, landlords may need to obtain a license for certain types of properties, such as houses in multiple occupations (HMOs).
What responsibilities do landlords have regarding tenant safety?
Landlords are legally obligated to ensure the safety of their tenants by conducting regular gas safety checks. They must also provide smoke and carbon monoxide alarms, and adhere to electrical safety standards.
How can I set a fair rental price for my property?
Research the local rental market, consider property features and amenities and evaluate comparable rentals to determine a competitive and fair rental price for your specific location and property type.
What steps should I take if my tenant fails to pay rent?
Follow the legal eviction process outlined in the relevant UK legislation. This typically involves issuing a notice to the tenant and seeking possession through the court if rent arrears persist.
