Letting for the First Time
There are many reasons why people want to let (rent out) for the first time. Letting their home, a second home or it may be an investment property.
Letting for the first time can be a steep learning curve, but if you follow these rules you will more than likely have a happy experience. You may also realise the true long-term benefits of being a landlord.
Many successful landlords start out by accident and go on to become a long-term landlord. Some landlords go on to build-up a portfolio of investments which over time bring them more income and wealth than they dreamed possible.
Whether you are relocating and keeping your own home, or embarking on a new buy-to-let project, letting has become increasingly popular. For many, investing in property is a viable alternative or a valuable addition to a conventional pension.
More to it Than You Might Think
The whole process of letting is not quite as simple as many people imagine. From the time you decide to rent out your property until when your tenant is securely settled in, there are a lot of details to think about and lots of opportunity for the unexpected to happen.
You Can be Too Trusting
If you want your landlording venture to be a success then you need to run the whole project in a businesslike manner. Do some reading and research, follow the advice or more experienced landlords and get yourself organised with the crucial documentation.
Most novice landlords are far too trusting of complete strangers, even to the point of allowing tenants into their property without signing an agreement or taking rent and deposits first. To avoid a complete disaster you need to think carefully about what’s involved and whether you are prepared to do the necessary preliminary homework. Or would you rather employ a professional agent to do the job for you?
There’s a lot to be said for using the services of a competent letting agent (a member of one of the professional associations), at least when you let for the first time. After that you may decide to save on those letting and management fees and have a go yourself.
The starting point is getting your property ready to let, making sure it is clean and tidy, ideally newly decorated in neutral colours and with good modern facilities – cooker, fridge, shower etc.
You don’t necessarily have to fully furnish the property as many tenants want to bring along their own furniture, though you need to be flexible with this. Be prepared to remove or replace items to secure a good tenant.
Next, you will need to find good tenants. This involves advertising, conducting viewings, credit checks and checking referencing, negotiations over rent and making a final decision. There’s quite a lot of paperwork to be completed and there’s legislation to comply with. Energy Performance Certificates (EPC), Gas Safety Certificates, electrical checks, registering the tenants’ deposits and ensuring all furniture complies with current fire regulations are just the start.
Managing Your Tenants
Once you have your tenant nicely settled in there’s the ongoing management of the property. If you have done a good job of selecting the right tenants this should be a piece of cake.
However, some tenancies can turn into a big headache, especially if the tenants have problems such as redundancies, sickness of marital problems.
Most new landlords have a job to hold down, so living some distance from the rental property can also create problems – it takes a lot of time if you have to drive a few hours whenever there’s a minor problem to deal with at the property. It practice, problems like buses seem to come along in threes, and then you might have a long period which is problem free. However, if you intend to manage the property yourself you need an understanding partner and a bit of patience.
Oftentimes, just as you feel things are running really smoothly, your tenant will come along with a notice to leave and the whole process starts over again.
These are the many problems of being a landlord, but experience shows that if you select tenants carefully (working and professional people) you will find that 95% of them will be trouble free – they pay their rent on time each month and they will look after your property as if it were their own. The trick is to avoid the other 5%. If you develop a systematic management process and develop an instinct for selecting the right tenants, then you will do just fine.
Here’s the main stages to go through when letting your property:
- A Prepare the property to let, including cleaning, decorating, furnishing, completing safety checks and complying with the necessary legislation. It’s not all that difficult, just needs a bit of effort on your part. This will all be worth it when your see those rent payments popping into your account every month.
- Deciding whether to handle it yourself or use a professional letting agent. Doing it yourself will save you a lot of expense, but you need to develop the necessary skills and have the spare time to do it.
- Advertising the property: the Internet, Letting Boards, Local Paper, Newsagents, Local Employers etc
- Dealing with enquiries, conducting viewings, interviews and negotiations
- Dealing with the tenant checks – credit checks and referencing, application forms and tenancy agreements, and security deposits
- Protecting the deposit in a tenancy deposit scheme, as the law requires
- Carrying out a thorough Check-In with all necessary checks and documentation: application forms, inventory, tenancy agreement, safety checks documents etc.
- Ongoing management of the property: maintenance items, necessary repairs, regular inspections etc.
- Collecting the rent
- Ending the tenancy correctly (the Check-Out) and if necessary dealing with any problems such as rent arrears, damage and repairs.
- Releasing the deposit.
Landlords and Tenants Have Obligations
As a landlord you have various legal obligations to fulfill, as does your tenant.
For example, your tenant is entitled to “quiet enjoyment” of the property during the rental term as if it were their own. You must not harass or pester your tenants and you are not allowed to enter their home without notice and permission.
New Landlords – More Articles in this Section:
- Letting for the First Time
- Am I suited to becoming a Landlord?
- Getting Stated in Letting
- Preparing the Property
- Marketing the Rental Property
- Sealing the Deal – Offers and Deposits
- Check-In and Check-Out
- The Tenancy Documentation
- Dealing with Agents – Fees and Costs
- The Tenancy Documentation
- The Main Landlord’s and Tenant’s Responsibilities
- Useful Links and Contacts
By Tom Entwistle, LandlordZONE® ID1975
©LandlordZONE All Rights Reserved – never rely totally on these general guidelines which apply primarily to England and Wales. They are not definitive statements of the law. Before taking action or not, always do your own research and/or seek professional advice with the full facts of your case and all documents to hand.