As more and more people venture into the world of property letting, there has been a noticeable increase in first-time landlords over recent years. Becoming a landlord involves a steep learning curve, so here’s a list of the most frequently asked questions and answers to help you while you’re finding your feet.
How much rent should I charge?
It’s important to strike the right balance so that you cover your own costs and make a reasonable profit, without scaring off potential tenants by rental charges that don’t compete in the open market. Spend some time researching the rates that are charged at similar properties in the area, and get a feel for the key commodities that justify higher charges, such as location, a garage or garden space.
What is a reasonable deposit to ask for?
Most tenants will expect to pay one month’s rent as a deposit, which is payable up front when the agreement is made. The deposit should be managed by an impartial third party through a deposit protection service, so that landlords and tenants can each make a case for any withdrawals.
What are my health and safety obligations?
Gas regulations state that you must arrange annual inspections of all gas appliances and provide copies of the certification to your tenants. It is also good practice to have your electrical fittings checked over regularly to ensure that any issues can be picked up and addressed early.
Is it better to let my property furnished or unfurnished?
This is a personal decision that can be influenced by the type of tenants you are targeting. Many professionals prefer to rent a property part-furnished, so that carpets and white goods are provided but they can use their own sofa, bed and other furniture. On the other hand, a fully furnished property is more appealing to students.
Do I have to inform my mortgage provider that I’m letting my property?
Yes, it is important that you keep your mortgage provider fully informed because there are a number of regulations you must abide by and you may require their written consent to use the property in this way. This is generally considered a formality and it is extremely rare for a homeowner to be refused permission.
What insurance cover do I need?
The moment you let your property out to a tenant it will no longer be covered by your standard insurance policy. Talk to a specialist about a tailored policy that covers you in case of accidental damage or theft, loss of rent, public liability and legal expenses. Make sure your insurance company is happy to cover your property even while it stands empty, or if your tenants fall into a higher risk category (such as students).
Am I responsible for property maintenance?
Yes. In the eyes of the law you are responsible for ensuring the safety of your tenants, their visitors and any workers who may be in your property at any time, so it is important for you to stay on top of any maintenance issues that may arise. If you are concerned that your tenants may fail to notify you of any issues you are within your rights to carry out inspections, but it is considered good practice to give them 24 hours-notice first.
What can I do if a tenant doesn’t pay the rent?
The first thing you should do is to attempt to speak to the tenants, since the vast majority of issues can be resolved through a frank and open discussion. This may involve contacting their rent guarantor or referees if you are having trouble reaching them. If your tenants are unresponsive or obstructive then you may need to begin eviction proceedings, which can rely on a court hearing that takes your previous actions into account. This is why it’s important to ensure that you’ve taken every reasonable step before resorting to this option.
Should I ask a solicitor to write up my tenancy agreement?
You are not required to involve a solicitor in your tenancy agreement, but it is important that it includes all of the appropriate rights and responsibilities of both parties in order to protect your interests now and in the future. Unless you have considerable knowledge and experience of drafting a document of this nature it is highly recommended that you seek the advice of a solicitor to ensure that you haven’t overlooked anything.
How do I vet potential tenants?
A few simple checks can help you to spot potentially troublesome tenants before you enter into any agreements with them. Ask for references from previous landlords or employers and check their formal identification to ensure that they are who they say they are.
This post was written by the team at CIA Insurance, who specialise in offering tailored insurance to landlords and are always happy to offer tips and advice to aid the smooth running of your endeavour.