In many respects, there has never been a better time to become a landlord. The challenging housing market of the last few years has seen the process of getting a mortgage more difficult than ever, and when you couple this with the need for people to remain mobile to take advantage of job opportunities, it all leads to a booming rental market.
For those with the means to buy-to-let, becoming a landlord can bring in some useful extra readies, however, there is quite a bit to think about and it is not something to be entered into lightly.
Before purchasing a property, think hard about your ideal tenant. If you’re targeting students for example, it goes without saying that you’ll need to find a property in a student friendly area, provide furnishings and electrical equipment. A young family, however, will probably want to be near good schools and will value being able to make their own mark on their new home. Presenting them with a blank canvas that they can stamp with their own style might be more appealing.
Once you have your property there are essentially two routes to take. You can adopt a hands-on approach, finding the tenants, collecting the rent and looking after the maintenance yourself, or, you can hand it over to a letting agent who will do the hard work for you. Both have their merits and their disadvantages.
If you go for it alone, you are likely to be better off financially but could find that the effort of maintaining the property, and your tenants, takes a lot of time and energy. Decide to give the day-to-day responsibility to a letting agent and life will be easier but you might not get the return you were hoping for.
If you choose to use an agent, use one that is a member of an organisation such as the Association of Residential Letting Agents ( ARLA ), the regulatory body for letting agents in the UK, which offers a Client Money Protection service to compensate the landlord and tenant should an agent misappropriate funds. In South Wales, also look out for agents who are a member of the Association of Letting and Management Agents ( ALMA ), which encourages best practice in the lettings’ industry in the region.
Whatever your decision there remains a lot to be aware of and you will need to do your research into the industry. Since 2007, landlords must place their tenant’s deposits into a tenant deposit protection scheme within 30 days of receiving it (more information: gov.uk ). The Housing Act 2004 (Chapter 4, sections 212-5 and Schedule 10) made provision for both the protection of tenancy deposits and the resolution of disputes over their return.
You will also need to be up to speed on current health and safety legislation. You are required by law to service all gas related equipment at least once every 12 months, provide your tenants with an annual gas safety certificate, and supply instructions on how to use the equipment safely. Electrical wiring must be in good working order and soft furnishings must meet the Furniture and Furnishings (Fire) (Safety) Regulations 1993. Any upholstered item used inside the property will need to be checked to ensure they comply.
Obviously this advice is far from exhaustive – the problem with ‘becoming a landlord’ is that there is far too much to cover in a short blog post! A good place to start is with the government’s own advice for prospective landlords which can be found HERE
Martine Harris FARLA
Head of Lettings