We understand how daunting it can be to rent out a property, and that's why we've put together this handy guide, so you can make sure you tick all the boxes before you get started:
1. Understand your market
If you are buying a new property to let out, do some research as to what sort of tenancy market you'll be buying into. If possible, it's always preferable to buy-to-let where there is a large demand for rentable housing, such as close to good schools or hospitals, as you are unlikely to ever be without a tenant, and you will be far more likely to get a good return on your investment. Try to find out which areas produce the best rental yields, and speak to local agents for advice on the type of tenants seeking accommodation in different areas.
2. Gain consent
Before you can let out a property, you'll need to make sure that any outstanding mortgage will cover a potential tenancy agreement. Speak to your lender to let them know about your intentions, as this is likely to alter the terms of your mortgage, and it may even allow you to negotiate a better deal in the process. You'll also need to speak to your property insurance companies to inform them of your plans and update your policies as appropriate. If your property was bought on a long-term lease, such as an apartment within a block building, you'll also need to speak to your freeholder to make sure your lease allows you to sub-let. Finally, if you are not the sole owner of the property, you'll need to discuss the decision with any other co-owners, and name them on any formal documentation relating to the lease.
3. Be aware of your safety responsibilities
As a landlord you must ensure that your property satisfies the necessary gas, electricity and fire safety requirements. Any gas equipment must be installed and maintained by a Gas Safe Registered engineer, and all electrical systems and appliances must be safe to use. Your property must also adhere to fire regulations, in order to supply escape routes, and any furnishings must be fire safe. You can find out more about your safety obligations on the Government website.
4. Check your energy performance
Any rented property requires an energy performance certificate, or EPC, so that tenants are aware of how thermally efficient it is before they sign their tenancy agreement. Energy performance can make a big difference to household bills, as the higher the rating, the less the property will need to be heated during the winter. Wolf's are able to source the EPC on behalf of all landlords, as part of our letting service.
5. Make your property attractive to potential tenants
If your property is in need of some TLC, there's no point trying to rent it out in an unacceptable condition. Ask yourself whether you would be happy to live in it in its current state, and put yourself in the shoes of your potential tenant, who is likely to be shopping around comparing multiple properties. You don't have to spend a lot of money to improve the look of your property, even just a fresh coat of paint can work wonders, but it's important to try and make it stand out. The more attractive your property it is, the higher the demand will be, and if you plan on charging above average market price for the rent, you'll need to be able to justify this by showing that your property is worth the extra money.
6. Make an inventory
Wolf's will be able to compile an inventory of your property on your behalf prior to letting. However, if you plan to go it alone you'll need to list every item that will remain in the property when you let it, and make a note of its condition before the tenant moves in (it can also be useful to take photos for peace of mind and to easily settle any disputes later on). Be sure to list any technical information, such as serial numbers, for electrical items as well. When finalising your inventory, make sure you allow space for tenants to write any comments when they move in, and create copies of the final document.
7. Advertise your letting
Once you are happy with the look of your property, you'll need to make sure it reaches the right audience. Wolf's has access to national property advertising platforms such as Rightmove, which are not open to independent landlords, and are therefore able to guarantee that your property will reach the widest possible audience. If you're acting independently you'll have to put a lot of time and effort into promoting your property on the right websites, and in the right local publications. Be sure to clearly state the basics and emphasise any plus points for your property, such as secure parking or character features. Your advertising approach should vary depending on your asking price and your target market, as you would advertise student accommodation in a different way to a family home, for example. There are strict rules governing the way properties are advertised, and it is illegal to mislead potential tenants. If you are in any doubt about how to promote your property, it's best to let a professional letting agent handle this for you.
8. Supply a compliant tenancy agreement
Your tenancy agreement must set out your obligations as a landlord, as well as the obligations of your tenant. Letting agents will be able to supply a tenancy agreement for you, but if you are not using an agent, it is advisable that you take legal advice in order to ensure that your agreement is compliant with renting regulations.
9. Comply with deposit regulations
As a landlord you must place your tenants' deposits in a government-approved tenancy deposit protection scheme within 30 days of receiving them. These schemes are designed to protect tenants who have complied with their tenancy agreement, and ensure that they get their money back when the tenancy ends, as long as they have paid all rent and bills and not damaged the property. If you opt to use an agent to manage your letting, they will be able to hold the deposit in an approved scheme on your behalf.
10. Declare your tax
Any income from your tenants is liable for income tax, alongside any other earnings which you may have made during the tax year. You will have to declare this on a self-assessment tax return each year, but you may be able to claim back certain expenses against your income to reduce your tax bill. If you are renting out your property for holiday lettings, you may also be eligible for additional tax relief. You can found out more on the HMRC and Government websites.
Letting out a property is an exciting venture, and one that's likely to be a good financial investment, but new landlords often lack the required experience, knowledge and time needed to deal with their properties and tenants effectively. Using a letting agent is a great way to avoid the pitfalls associated with letting a property independently, meaning you can enjoy the financial rewards without the day to day stresses of managing relations with your tenants.
As a member of ARLA (the Association of Residential Letting Agents) Wolf's promises to handle your letting with the utmost care and attention. All members of ARLA are required to adhere to high standards of professional conduct, so you can be sure you're in safe hands.
At Wolf's we help landlords to let out hundreds of properties in Birmingham city centre, Edgbaston and Harborne. We ensure that your property is let to reliable tenants who are all thoroughly credit checked before they sign their leases, and while your property is rented out, we will manage all obligations on your behalf.
If you'd like to find out more about how Wolf's can help you with your property letting, please get in touch with us today.