Becoming a landlord can be a great way to generate income, but can also be a daunting process for someone looking at renting out a property for the first time.
With so much to consider, we wanted to put together an in-depth guide for first time landlords. We will help you to weigh up the pros and cons of renting out your property, and discuss how to prepare for the arrival of your first tenant.
Before we look into the steps you need to take to prepare your property for a tenant, let’s talk about the things you should consider before becoming a landlord…
Considerations before renting out a property
There are pros and cons to most financial decisions we make, and entering the rental market is no exception. Before making the decision to rent out your current property, or buy a property to rent out, consider the following:
Cost vs potential ROI
Income from rental properties not only comes from the rent you receive each month from your tenants, but also increases in the value of the property over time.
As the property market is somewhat unpredictable, it is impossible to accurately calculate how much income you will make from capital growth. Having said this, you can assume that over a long period of time, you will make money on a property providing you didn’t pay over its current value.
Being a first time landlord, you likely don’t have the knowledge or experience to be able to work out the potential ROI from your rental property. Therefore, it will be hugely beneficial for you to speak to a letting agent. They will be able to talk you through the current market, and make more accurate predictions about how successful your investment is likely to be in terms of profitability.
Legal Requirements for Landlords
Legal requirements for landlords is something that you should consider when making your decision, as it can come at some effort and cost. Landlords now need to adhere to stricter guidelines regarding property maintenance, tenant safety and privacy, than ever before.
Just a small insight into some of the checks and legislations that are required to be carried out include:
Adequate smoke and carbon monoxide alarms
Gas safety record
Furniture that meets fire safety standards
Legionella testing for water supplies
PAT testing for electricals
First-time landlord checklist: how to get your property ready for renting
Now you have the information you need to decide whether becoming a landlord is a good investment for you, let’s delve into the must-dos for getting your property ready to rent out.
1. Get permission to let
The first step after you decide you want to rent your property out, is confirming that you can do so.
Speak to your current mortgage lender, or a mortgage advisor, about taking out or switching to a buy to let mortgage. If you currently have a residential mortgage, you will need to find out if you can switch to a buy-to-let mortgage with the same lender. If not, you may have a significant exit fee to pay to move to another lender, if you have a fixed rate secured. A mortgage advisor should be able to talk you through your options, and are often fee-free.
2. Decide whether you’ll use a letting agent
There are pros and cons to both self-management of rental properties, and using a letting agent. Of course, self-management means you’ll keep more of the profits made from the rental, however it takes a considerable amount more time and effort, which many of us don’t have.
Using a letting agent allows you to pass a lot of the stress onto a professional, who can help you find tenants, conduct viewings, and deal with maintenance issues.
Look into the fees involved with using a letting agent, and weigh up the options.
3. Ensure safety standards are met
As mentioned earlier, meeting safety standards is essential for landlords, in order to both meet regulations, and create a trusting relationship with your tenants.
This should be considered before your tenant even moves in, with gas and electrical safety checks carried out, and smoke and carbon monoxide alarms installed and tested.
4. Carry out repairs
In order to get off to a good start with your tenant, you will need to ensure any necessary repairs are dealt with prior to them moving in. This could include any broken fixtures, plumbing or heating issues, damage to internal or external walls, or faulty doors and windows.
If you need external help to determine what needs fixing before renting your property out, you could utilise the services of a property inventory company such as our team at Arnold Inventories. This will provide you with a clear report which identifies any issues that need to be addressed.
5. Get an EPC
An Energy Performance Certificate (EPC) is required to rent out a property in the UK. This should be arranged well in advance of any tenant moving in, so you can ensure your property passes the inspection.
6. Declutter
It goes without saying that a tenant doesn’t want to have to deal with your clutter when they move into the property. Make sure you thoroughly go through each room and remove any personal items, to ensure your tenant is moving into a blank canvas which is more appealing and functional.
7. Decorate your property
If you have bold colours and patterns in your rental property, they may not be to everybody’s taste. It is therefore preferable to decorate your property with neutral colours prior to renting, to appeal to a wider range of tenants.
8. Furnish your rental (optional)
Not everyone chooses to furnish their rental property, so this is something you will need to think about. A furnished property can look more appealing to tenants than an empty property.
If you do decide to furnish, or part furnish, your property, ensure everything you buy meets safety regulations. A furnished property will often include basic furniture, appliances, and other essential items.
9. Prepare tenancy agreement
The most important document you will create prior to letting your property is the tenancy agreement. This is the legal binding contract between you and your tenants, which outlines the responsibilities of both parties, and terms and conditions of the tenancy.
0. Arrange an inventory check in report
Before your tenants move in, it is highly recommended to arrange a professional inventory inspection. This detailed report highlights the condition of the whole property, with notes made on each room about the overall condition and any noticeable damage. A thorough inventory report should come with supporting photographic evidence of any findings.
This report protects you as a landlord, by providing you with proof of the condition of the property before your tenants move in, preventing them from passing blame for damage they may cause. On the flip side, the report also provides peace of mind for tenants, meaning they cannot be blamed for pre-existing damage.
If you’re looking for a thorough inventory report for your rental property, get in touch with our friendly team for more information on our services.
Conclusion: How to rent for the first time
Becoming a landlord can be very rewarding, offering the potential for steady rental income and long-term capital growth. However, you should take time to weigh up the pros and cons before making a rash decision, including factors that may prevent your rental from being profitable, and your responsibilities as a landlord.
By following the steps outlined in this guide, you'll be well on your way to preparing your property for renters and ensuring a smooth and successful rental experience for you and your tenants. Good luck with your venture!
If you’re renting out a property for the first time and would like to talk to our team at Arnold Inventories about how our property services could help you, reach out to us today.
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