Tips for First Time and Accidental Landlords
If you’re a first-time landlord there’s going to be lots of info you will need to get up-to-date on.
That’s especially the case if you’re an accidental landlord as, understandably, you may feel as if you’ve been thrown in at the deep end, without a change to prepare. And that’s exactly why the team here at Property Loop have compiled this article. It tells you what you need to know to stay legal and above board. And, just as crucially, it also fills you in on what to do to keep the tax man happy.
Do You Need a Licence to Become a Landlord
It’s not just HMO landlords who require a licence for their rental property. Some local authorities have introduced selective licensing. Almost three-quarters of council’s in London have, for instance, while in other areas, such as Scotland landlords have to register with a scheme. Selective licensing mainly applies to areas where there are a high number of rentals and where the council want to keep an eye on conditions.
Is It Better to Rent Out Furnished or Unfurnished
It is possible to rent out a but to let property either furnished or unfurnished. Whatever you choose depends on what sector of the market you are targeting. If it’s young professionals, for instance, chances are they haven’t had time to amass a great deal of furniture. Neither do they want to furnish a rental flat themselves when they don’t intend to stay put for more than a couple of years.
Families, on the other hand, probably do have a lot of furniture already and will more than likely be seeking unfurnished accommodation.
Always Reference Check
Doing a reference check on a prospective tenant is essential. That way you’ll know they can afford to pay the rent, for starters. You’ll also find out if they have poor credit record and if they tend to stay long in residential accommodation. Doing a reference check always saves time and stress later on down the line.
Getting annual gas checks for your rental property is a must. So too is acquiring an EPC before your tenant moves in. This assures him or her that the flat is at least E-rated. You should also fit a smoke alarm on each separate floor and install a carbon monoxide detector in any rooms with a fire. From July this year (ie 2020) all landlords must also order an electrical assessment (known as an EICR report).
Your tenant will pay you a deposit of five weeks rent when they move in. This must be depositing with one of the government’s accredited schemes and the tenant informed within 30 days. The tenant will get this back when they move out, minus any money for repairs.
Inspecting Your Property
Yes, you will want to go and check your property now and again, and inspections are legal. Well, that is provided you give your tenant at least 24 hours’ notice in advance. Don’t over-do it with the inspections though – every six months is fine.
To Manage – or Not…
There are many property management companies out there who will quite happily look after your rental property – for a fee. This is usually from 10-15% of the annual rental cost. The company attends to maintenance issues and generally acts as a buffer between yourself and the tenant.
Landlord insurance varies and can cover you if there’s any damage to the building (roof repairs, structural problems that need fixed, etc). It also extends to interior fixtures, such as a bath, boiler etc. But it might also be a good idea to get cover for void periods (ie where no tenant is living there).
Pay Your Tax
Any rental income over £12,500 is liable for tax. You pay rent on the total income, not just profits after the cost of the mortgage has been deducted (this was the case previously but not today). You will also have to add earnings from any job you have to get a total taxable income.
As a Property Loop landlord you will enjoy receiving a monthly rental income, in addition to watching the capital value of your asset grow over time. Just make sure you don’t fall foul of any legislation. There has been a lot of changes to landlord laws in recent years so it definitely pays to keep up to date.
Looking for an online property agent you can trust? Then get in touch with the team here at propertyloop.co.uk.
Built by experienced property investors and landlords, the website connects renters and owners directly. Why not sign-up to see it in action?
It’s a free platform that only charges a small fee once you get your rent money in. Your property is featured on all major search and comparison portals as well as advertised by PropertyLoop everywhere else on the Internet.
You don’t have to worry about finding good renters since that’s the job for the platform. Receive offers straight to your mailbox and select the renters that are right for your property.
Need access to the busy London property market? No problem at all! PropertyLoop is the London market specialist with years of experience and unique knowledge. Whatever your needs are, you can always speak to our friendly support staff. Renting property is made as simple as one, two, three…
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February 12, 2021
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