Buy a house. Rent it out. Make money. Becoming a landlord is so simple, right?
Not according to recent research by LV= which found that, while 7% of UK adults rent a property to supplement their main income, a massive 49% of those managed the property without the protection they needed to comply with legal requirements.
The study also found that almost 500,000 landlords have not had their property checked by a gas safety engineer in the last 12 months and Carole Charge, Leader’ Technical & Compliance Director, knows letting a property is much harder than it looks.
She says, “The income from letting a property is certainly appealing and buy-to-let is a great investment if it is done properly. However, there are 100+ rules and regulations that a property has to pass to be let legally and landlords must ensure they adhere to all of them to avoid large fines and even custodial sentences in extreme cases.”
Leaders have released a ten point checklist to help landlords keep their property up to scratch which you can read below.
1. Gas, fire, furnishing and electrical safety requirements
It is the landlord’s responsibility to ensure all gas appliances, electrical equipment, furniture and soft furnishings are maintained in a safe condition and that they all comply with the appropriate regulations; the tenant must also be provided with the correct current documentation.
2. Energy Performance Certificates (EPC)
All properties being marketed as available to let are required to have an Energy Performance Assessment carried out and a certificate produced.
3. Tenant vetting
Every tenant should go through a thorough vetting process; this should include a detailed assessment of the tenant’s ability to afford the rent, credit and ID checks, proof of residency and references from employers and former landlords. Stringent checks should also be carried out on guarantors if required.
4. Inventory and schedule of condition
A professional inventory and schedule of condition at the start of the tenancy is essential to ensure that you have an accurate record should you need to make a claim against the deposit for damage.
5. Tenancy agreement
Tenancy agreements protect your interests as a landlord and must comply with residential letting legislation. They must be easy to understand, be written in plain English and contain no unfair terms or conditions.
6. Correct buildings and contents insurance
Most ordinary home insurance products do not cover rented properties so it is important to have the appropriate building and contents insurance for letting a property. Without the correct insurance you may not be able to claim and could face serious financial losses.
7. Dealing with late rent or rent arrears
You will need a robust system in place to chase rental payments to ensure you avoid late payments and act accordingly if they do occur. You must serve the correct legal notice at the correct time if your tenant falls into arrears with their rent.
8. Tenancy deposits
Deposits must be protected in accordance with the rules and regulations of the Tenancy Deposit Protection Scheme. You need to provide your tenant with the details within 30 days of the start of the tenancy.
9. Regular property visits
Regular and suitably documented visits to the property are vital, as well as ensuring someone is on call to deal with any maintenance issues, emergencies and the many calls that tenants make about the property.
10. Taxation on lettings income
Any profit made from letting a property is subject to UK income tax, whether the landlord lives in the UK or not, and must be reported in a Self-Assessment Tax Return.
Becoming a landlord can seem overwhelming, but a professional agent can help with all the above. Instructing an experienced agent can be a wise move to ensure all legal obligations are met and is the best way to ensure your interests are protected.