Flats Rent London

Why Become A Landlord?

Deciding to become a landlord can be a rewarding experience both financially and personally. With the rental market having boomed in recent times, more and more people are relying on the profits of being a landlord as their main source of income.

Hands On or Agency?

Whether you choose to manage the property you let yourself or prefer to leave the hard work to a paid property agency, it is important that as a landlord, you remain well informed and professional. Whatever your approach, you have legal requirements to fulfill and it pays to keep in touch with industry and any trends.

Points to consider when renting out your property.

Area - Location is one of the first considerations for tenants. Good transport links, crime levels, type of people/properties already in the area, nightlife and the general vibe all contribute to the popularity of an area and will help to determine the interest in your property. Some areas may be “up and coming” while others may be saturated with empty rental properties already. With an ever changing market it is important to do your research and choose your property area well.

Suitability of Property - If you intend to take out a buy to let loan, the property you are buying will be valued to check whether it is is worth its selling price and whether it can achieve the proposed rental income. If it satisfies those requirements, most lenders will be happy to lend.

Even when rental demand is increasing you should ensure that your property is in the best possible condition so that you can attract quality tenants. Make sure that the property is spotless or ask the current tenants to clean up before people are shown around. Painting rooms in neutral colours can help potential tenants to imagine their lives in the property.

The needs of tenants vary and it’s a good idea to speak to people with experience of renting properties to find out the type of things that make a property appealing. Your success as a landlord means keeping in touch with both the legal requirements and tenant expectations. For example, although it may not be a legal requirement to have a shower fitted in the bathroom, you may find that many tenants come to “expect” such things as standard.

Assured or Assured Shorthold? - Although there are both assured and assured shorthold tenancies, most lenders will insist on an assured shorthold tenancy. This offers you the safeguard of being able to take possession of your home after a six month period if it becomes necessary. You will need to have an assured shorthold tenancy agreement drawn up.

Legal Requirements – Your legal responsibilities as a landlord under a shorthold tenancy include the requirement to inform your mortgage lender of your intention to let your property. If it is a leasehold property, you will need to obtain permission from the freeholder, too.

If you are renting the property furnished, the furnishings must comply with fire and safety regulations. Gas appliances must be checked by a qualified Corgi professional and electrical appliances should be checked regularly by a qualified electrical engineer.

It is important that you find a way to keep in touch with any legal requirements you may have as a landlord. Keep informed of changes to regulations by joining groups such as the National Landlords Association or a landlord accreditation scheme run by your local authority.

Deposit Scheme - Landlords are no longer entitled to hold on to deposits, so you need to find a tenancy deposit protection scheme to hold the money. You must be able to provide the tenant with details of the scheme within 14 days of taking the deposit. Landlords who do not sign up for a scheme will find it harder to evict tenants with whom they have a dispute.

Lifestyle Matters - When preparing your tenancy or right to occupy agreement you need to consider a few additional lifestyle matters including issues such as whether to allow tenants to keep pets, change the décor or smoke in the property. Where possible you should discuss these matters with the tenant in advance and consider putting them in writing.

Holding Deposit

Once you’ve found a suitable house or flat to rent you’ll probably begin by putting down a holding deposit in order to state your intention to rent the property and get the property off the market. The letting agent will then begin the administrative process of requesting references from you as well as a full deposit.

References

Most landlords will ask for references to ensure that you are a suitable tenant and that you have the ability to pay your rent, while also making sure that you have rented a property without any major problems in the past (if this is applicable). The letting agent will usually organise this and ask for their administration fee before the process is started. The type of information they may request often includes the following;

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  • References from previous landlords
  • A credit check
  • Your bank details
  • Details of your employment

Should the searches suggest that there is any potential of risk to the landlord, you may be asked to provide a guarantor. A guarantor will be contractually liable, both financially and legally, should you fail to pay the rent during your tenancy or in the event of damage to the property.

Full Deposit

Deposits are usually between one and two months’ rent and held for the duration of the tenancy. Since April 2007 landlords are no longer entitled to hold on to deposits, so the agency are likely to suggest a tenancy deposit protection scheme to hold your deposit money.

Inventory

Ensure that a thorough inventory is carried out as this document can be key in deciding how much of your deposit you get back at the end of your agreement. A list detailing every item contained within the property and the condition each listed item is in will be checked and agreed on the day you move in. You will be expected to sign the inventory and initial every page, along with the landlord or letting agent. This list will form the basis for the check on the day you move out of the property and any intermediate checks whilst you are living there.

Tennancy Agreement

Although there are both assured and assured shorthold tenancies, most landlords will insist on an assured shorthold tenancy agreement. The tenancy agreement is a contract between you and the landlord. It specifies certain rights to both you and the landlord, such as your right to live in the home for the agreed term and your landlord’s right to receive rent for letting the property.

The agreement will most likely contain the following information:

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  • Your name, your landlord’s name and the address of the property which is being let
  • The date the tenancy will commence
  • The duration of the tenancy from the start to the agreed finish of the occupation
  • The amount of rent payable, how often it should be paid, when it should be paid and when it can be legally increased
  • The agreement should also state what the payments are expected, including Council Tax, utilities, service charges, etc.
  • What services your landlord will provide, such as maintenance of common areas
  • The notice period which you and your landlord need to give each other if the tenancy is to be terminated.

 

Extending the Agreement or Moving Out?

If both you and your landlord are happy, you may wish to extend your agreement and continue living in the property. You will need to provide two months’ notice in writing to your landlord, stating either your intention to vacate the property or to ask permission to stay on beyond your initial agreement.

If you decide to move out, you will be expected to leave the property in the same condition as when you moved in (barring normal wear and tear), Make sure you give the property a good clean, tidy the garden, empty all your belongings and hand back any keys.

You’ll run through the inventory checklist on the day of departure. It’s important that this job is done before you leave the property to avoid you being accountable for any damage that occurs after you’ve left. If there is any damage, you should agree with the landlord the cost of repairing or replacing such items. Take photos where necessary just in case there is some disagreement on issues. If both you and the landlord are satisfied the property has been left in an acceptable state and you have made your final rental payment, there should be no problem getting your deposit back.