How to become a landlord
Becoming a landlord can be a great way to make passive income. However, it’s not as simple as renting out a property and sailing off into the sunset. Things can get complicated, especially when you are new to the game.
That’s why we are here to answer any questions you might have if you are considering becoming a landlord.
Is now a good time?
Given how changeable the property market is, you may be wondering if now is the right time to become a landlord.
As of February 2024, the demand for rental properties is still extremely high in comparison to the number of available properties. Therefore, being a landlord is still a viable way to make extra cash.
Am I eligible?
Maybe you already have a property that you want to let. If so, you will need to check with your mortgage lender to make sure that the option to buy-to-let is covered in your policy. If your property is leasehold, you might not be able to sublet. However, it is worth checking your lease and confirming with the freeholder, just in case.
If you are searching for a property to let, then you will need to double-check that this is possible before you sign anything.
How involved do I have to be in the process?
The nearer you live to the rental property, the easier it is to get closely involved in the management process. Broken lightbulb? Leaky pipe? Fret not!
However, if you live far away from the property or if you have a busy schedule, this may not be realistic for you. Again, fret not! A property management agency can help you out. They do require a fee, but this might be worth it depending on your lifestyle and needs.
What are the legal responsibilities involved in letting a property?
There are lots of different legislation involved in renting out property.
Here are some of the most important legislation:
- Tenant Fees Act
- Section 21 Evictions
- Electrical Safety Inspections
- Minimum Energy Efficiency Standards (MEES)
- Tenancy Deposit Schemes (TDP)
If this is overwhelming, you can hire a letting agent to sort the legal side of things for you. This way, you can ensure that everything is covered and that you are adhering to the latest regulations (which are always changing).
What are the tenant rights?
Some basic rights apply to tenants. These rights are as follows:
- The tenant is protected in the case of unfair eviction.
- The property needs to be well-maintained and safe.
- Any deposit made must be returned.
- Excessively high rates can be challenged.
- The tenant has the right to know who their landlord is.
- The tenant has the right to live in the property undisturbed.
- The tenant has the right to see the Energy Performance Certificate (EPC) for the property.
What if I want to rent out part of my property?
Do you have a spare room or a granny flat in your residential home? If so, perhaps you have considered letting it out to earn some money on the side.
This can get complicated, so we would recommend that you check out the following guide: https://www.gov.uk/government/publications/letting-rooms-in-your-home-a-guide-for-resident-landlords/letting-rooms-in-your-home-a-guide-for-resident-landlords.
Bonus tip: Put yourself in the tenant’s shoes
Okay, so you have decided to let your property and you are aware of the key legislation involved. Now it’s time to take a brutal and honest look at your property.
Would you decide to rent the property, as a tenant? If not, why?
If you said no to this question, then it might be a good idea to redecorate. This could be as simple as a fresh coat of paint or as complicated as a new kitchen. Sometimes though, the most effective changes are small ones, such as replacing those old-fashioned floral curtains with a new pair of monochrome ones. Such changes can completely revamp your space!
We hope that this has cleared things up for you. The world of landlord-ing can be overwhelming and confusing but, done right, it can offer you the path to financial freedom that you’ve been searching for.