How to Become a Landlord - Your Checklist Guide

Becoming a landlord can be a rewarding venture and offer financial benefits in the form of a steady income stream. However, it's not without its challenges. This guide provides you with the knowledge you need and the steps you should take to begin your journey as a landlord, covering everything from legal obligations to property preparation. 

Whether you've just purchased your first rental property or are considering managing a rental portfolio, this guide is for you.

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Understanding your rights and responsibilities

As a landlord, you have specific responsibilities to ensure a fair and legal tenancy. If you fail to meet your legal obligations or respect your tenants' rights, you will be liable for legal action against you - not to mention adding stress and costs to your tenancy management.

You also have rights as a landlord, and knowing them allows you to manage your properties efficiently and to your advantage. This knowledge also signals when you will be able to take action in certain situations - so that you can protect yourself and your property. Here are your main rights as a landlord:

  • To set reasonable rent and receive payment on time.
  • To be notified by the tenant if repairs or maintenance are needed.
  • To inspect the property, provided you give the tenant appropriate notice (usually at least 24 hours).

Understanding your responsibilities protects the tenant-landlord relationship. When each party knows the other's responsibilities, issues can be dealt with efficiently and without unnecessary inconvenience for the other party. This is important because it reduces the risk of small issues spiralling into larger, more costly issues that you may need external parties to help you resolve.

The core landlord responsibilities are:

  • Ensure the property is safe and meets housing health and safety standards.
  • Provide a secure environment, with locks and security systems in working order.
  • Handle repairs and maintenance issues promptly.
  • Understand and comply with local housing laws and regulations, which can vary by region.

Preparing your property for rent

Before listing your property, you must ensure it's in the best possible condition to attract reliable tenants and secure a competitive rental price. If it is not in the best condition, you must be honest with prospective tenants, or risk denting the tenants' trust in you from the get-go. Furthermore, if something wrong with the property was within your remit to fix and you didn't disclose it, you could be liable for its costs or, in serious cases, legal action by your tenant.

There are several types of checks you must undertake before listing a property. Check that all gas and electrical equipment meets safety standards and that fire safety measures, such as smoke alarms and clear escape routes, are in place. You must arrange for an annual Gas Safety Certificate, which must be given to the tenants within 28 days of the check being complete, or before a tenant moves in if there is no tenant at the time of the check. Since 2008, landlords have also been required to have an energy performance certificate (EPC) for their property. It is the responsibility of the landlord or property owner to obtain an EPC before marketing a property and they must have a copy of the certificate ready to show potential tenants.

Address any repair issues, from leaky faucets to structural concerns. A clean, well-maintained property will not only fetch a higher rent but also encourage tenants to keep it in good condition.

Examine the property's appearance. A fresh coat of paint and clean carpets can make a significant difference. Decide whether you'll rent the property furnished or unfurnished. Remember, if you provide furnishings, they must meet fire safety standards.

Preparing your property with care can lead to a smoother tenancy and fewer issues down the line. It sets the standard for how you expect the property to be maintained and can significantly impact the type of tenants you attract. Taking photographs of the property before a tenant moves provides evidence of the property's state, which can be valuable should a dispute arise about damage to the property.

Financial considerations

Landlord insurance is a critical yet often overlooked financial consideration. Unlike standard home insurance, landlord insurance covers the specific risks associated with renting out a property, including property damage, loss of rent, and liability for tenant injuries.

Tax obligations must also not be overlooked. Income from rent is subject to Income Tax, and you may be liable for Capital Gains Tax if you sell the property. However, certain expenses related to property maintenance and management can be deducted from your taxable income. Understanding these financial obligations will help you set a realistic and competitive rent while ensuring your investment remains profitable.

Finding and screening tenants

The success of your rental property business will largely depend on finding the right tenants. Effective advertising should highlight the best features of your property and include high-quality photographs. Use platforms such as online property listings, local newspapers, and social media to reach a wider audience.

Once you have made contact with potential tenants, arrange viewings to not only showcase your property but also to assess the tenants. Good communication during these meetings can provide valuable insights into their reliability and compatibility with your property.

Even if a tenant appears to be a good fit on paper, you should screen them. This involves checking their credit history, employment status, and references from previous landlords. Such due diligence will help you to select tenants who are likely to pay rent on time and maintain the property well.

Your legal requirements

Creating a robust legal framework is fundamental to protecting both your rights and those of your tenants. The tenancy agreement, a legally binding contract, should clearly outline the terms and conditions of the tenancy, including rent, deposit, duration, and permitted uses of the property. Ensure that it complies with current housing laws and regulations.

Protecting the tenant's deposit in a government-approved scheme is not only a legal requirement but also instils trust between you and the tenant. It ensures that the funds are safely held and can be correctly allocated at the end of the tenancy.

Lastly, ensure your landlord insurance is up to date to protect against unforeseen circumstances. This not only safeguards your property but also ensures that you can provide prompt and efficient solutions should any issues arise with the tenancy.

These steps serve as the foundation to prepare you for becoming a landlord, but there are countless other tips and pieces of invaluable knowledge that can help you manage your property portfolio efficiently and without stress. That's why, whatever your experience, seeking the help of tenancy experts AST Assistance will allow you to fulfil all your obligations and protect your rights easily. For dedicated help, contact the team on 01706 619954 or fill out our contact form.

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