Thinking of renting out your property?
You might be surprised by what’s involved. From the financial implications to legal requirements, there are crucial factors many overlook. Discover the seven key things about property rental that could change the game for you as a landlord.
1. Financial Viability Matters
Before renting out your property, check if it’s worth it. Ask yourself: “Will the rent I get cover my costs?” Look at how much money you can make each month from rent. Then, think about your mortgage payments. If they’ve changed to buy-to-let, they might be higher.
Don’t forget one-time costs like fixing things and getting the word out. You also have ongoing costs like keeping the place in good shape and paying for insurance. Remember, renting out your place means paying tax on what you earn.
This check helps you see if renting out your property will make you money or not.
2. Different Rental Models
When renting out your property, you have a few choices.
One way is to do it yourself. This means more work, like finding tenants and sorting out problems, but you might earn more. Another way is using a letting agent. They handle things for you, but they charge a fee.
There’s also the rent-to-rent model. Here, you rent to someone who then rents it out to others. If you like, try Airbnb for short stays. It’s flexible but can be a bit of a hassle. Lastly, there’s rent to buy, where tenants pay towards eventually buying the property. Each way has its ups and downs.
3. Property Prep is Crucial
Getting your property ready for tenants is very important. Rightmove recommends starting with a deep clean. Make sure every corner looks spotless. If anything needs fixing or updating, like the kitchen or bathroom, get it done. A modern touch helps a lot. Sort out any problems, like damp or broken things.
Use simple, light colors for walls to appeal to more people. Good lighting is key too, especially for those who might work from home. Don’t forget the outside. A neat garden and a nice front door make a great first impression.
4. Effective Marketing
To find tenants fast, you need good marketing. Put your property on popular websites like Rightmove and Zoopla. Make sure your adverts have great photos and all the key details like rent and what’s nearby. Use social media and local groups to spread the word.
You can also hand out flyers in the area. A sign outside the property works too. Don’t forget to tell people you know. Friends and family can help find someone. Good marketing means more people see your property, helping you find tenants quickly.
5. Thorough Tenant Vetting
It’s important to check who you’re renting to. Make sure they can pay the rent. Ask for their payslips. Get references from past landlords. These tell you if they pay on time and look after the place. You need to check their ID, job, and if they’re allowed to live in the UK.
Do a credit check to see if they pay their bills. Meet them yourself. This helps you see if they’re the right fit. You can also get a company to check tenants for you. This makes sure you find good people for your property.
6. Setting the Right Rent
Choosing how much rent to ask for is important. Look at what other places like yours charge. Your rent should be fair and match what the area offers. If you set it too high, you might not find tenants. Sometimes, asking for a bit less than others can get you a tenant quicker.
Treat all your tenants the same with rent. Don’t charge some more than others. Every year, think about whether you need to change the rent. This should go with how costs go up over time.
7. Legal Compliance
When you rent out your property, you must follow the law. Make sure you have the right safety certificates for gas and electricity. Protect your tenant’s deposit in a government scheme. Treat all tenants fairly and without discrimination.
Learn about when you can deduct interest rates and how mortgage payments work. For example, landlords often don’t know that you cannot deduct mortgage interest on a rental property. Not knowing this can put you in an uncomfortable position with the authorities.
When renting out your property, legal compliance is key. Ensure you have valid gas and electricity safety certificates and protect tenants’ deposits properly. Treat all tenants fairly, and if your property houses many people, like in a shared house, you may need a specific licence.
Following these legal guidelines is essential to avoid trouble and to build trust with your tenants. It’s about providing a safe and fair environment for everyone involved in the rental process.