Here’s what you can expect
If you’re set on renting out your home you will need to go through several steps
1. Get your lender’s permission
Speak to your mortgage lender and see where they stand on your property becoming a buy-to-let.
If you’re planning to rent out your home for a fixed period, you may be able to stay on your current mortgage deal.
But if your home is going to become a more permanent buy-to-let property, you may have to take out a buy-to-let mortgage.
2.CHOOSE A LETTING AGENCY
Using a letting agent’s full management service is the best way to ensure your property remains compliant and you get the best possible tenants in place.
Under a full management agreement, your agent should:
- Ensure all compliance requirements are taken care of, including annual gas and electrical safety checks
- Market your property to potential tenants, including through the online portals
- Accompany potential tenants on viewings
- Provide a full tenant referencing service
- Undertake Right to Rent checks
- Provide a tenancy agreement and other documentation
- Arrange an inventory at the start and end of each tenancy
- Collect monthly rent
- Protect all tenant deposits
- Manage ongoing maintenance and repairs
- Inspect the property regularly
- Chase tenant arrears and issue notices for possession
- Deal with tenancy renewals and perform an annual rent review
If you decide to manage your rental property yourself, you would be responsible for all compliance and tenancy demands.
3. Check your property is compliant
If you decide to use a letting agent’s full management service, they will ensure all compliance and health and safety requirements are met.
But if you’re self-managing, you’ll need to make sure your property is legally ready to rent out
4. Arrange landlord insurance.
Although landlord insurance isn’t a legal requirement, your mortgage lender will almost certainly insist you have a valid buildings insurance policy in place.
Other aspects of landlord insurance you should consider, on top of buildings insurance, include:
- Contents insurance if you’re renting out your home on a furnished basis
- Tenant liability insurance, which covers you if someone is injured while visiting your rental property
- Legal expenses insurance, should you need to go through the court process to evict a tenant
- Tenant default insurance, which covers you for lost rent should you tenant be in arrears
5. Advertise your property
If you’re using a letting agent, they should advertise your property on the main online property portals, as well as market it through social media and other digital platforms.
If you decide to advertise your property yourself, you’ll need to consider any additional costs for doing so.
6. Perform tenant checks
Your letting agent will undertake thorough referencing and financial checks to ensure the tenants who want to rent your property are suitable.
If you decide to do this yourself, you should:
- Request proof of identity and address
- Request proof of income
- Seek references from previous landlords
- Obtain an employer’s reference
- Undertake a credit check
- Complete Right to Rent checks for immigration purposes
7. Collect and protect your tenant’s deposit
Legally, all tenancy deposits must be protected in one of three government-approved schemes.
A letting agent will do this for you but if you’re managing your property yourself and fail to lodge your tenant’s deposit within 30 days of their tenancy starting, they could take you to court and seek compensation. You’ll also be unable to issue a section-21 notice to regain possession of your property.
As well as protecting your tenant’s deposit, you must also tell them, within 30 days:
- The address of the rental property
- How much deposit you have protected
- The deposit protection scheme you’ve used
- The letting agent’s name and contact details (if using)
- How your tenant can apply to have their deposit returned
- The process should there be a dispute over their deposit
8. Do an inventory
Inventories set out the condition of your property at the start of the tenancy and are vital in the event of a deposit dispute.
Photos should be included with any inventory, both at the start of the tenancy and the end.
By using a letting agent’s full management service, inventories will be taken care of for you.
9. Stick to the rules on visits and inspections
Regular property inspections are vital and a great way to keep on top of any potential maintenance problems at your property.
However, if you wish to inspect, or visit, your property at any time, you must give your tenants at least 24 hours’ notice.
10. Be a good landlord
Try to build a relationship with your tenants based on mutual understanding.
Outline what’s expected of them, but also be sympathetic to their needs and circumstances.
A good landlord leads to good tenants and good tenants can often mean fewer costly void periods