The housing market seems to be booming at the moment – if you talk to any of the estate agents in the area, houses are being snapped up super fast. It could be that many buyers are investing in a second home, and if that is the case, you might be considering becoming a landlord. It’s not as easy as just ‘renting’ a property these days, so let’s take a look at what you need to do, if you are looking to be a landlord.
Double check the mortgage
If you’ve purchased an investment property to rent out, you need to make sure that the mortgage means you can rent it out. Some mortgages don’t allow you to do this, and you may find you need a specific buy-to-let mortgage if that’s the purpose for the house. If it’s a flat you are looking at, make sure you double check the leasehold agreement too.
Today, being a landlord is all about making sure you are responsible, and offer a duty of care towards your tenants – and that means there are a lot of legal responsibilities you need to consider. This includes things like ensuring any gas boilers have an annual safety certificate, your electrics also are certified, if in Wales then you need to register with Rent Smart Wales, making sure you use an approved deposit scheme provider and so on.
Make sure you spend some time getting your head around all of the responsibilities you will have – although if you are considering using an agent anyway, ask them too!
Thankfully there is a big push for tenant rights and has been for the past few years – so, before you buy your property you need to make sure you are aware of your tenant rights too, which will have to be outlined in the tenancy agreement.
Some basic rights that tenants can expect include living in a property undisturbed, access to the EPC certificate, be able to challenge excessively high charges, have their deposit returned fairly when the tenancy ends and so on. Most of this in our opinion is fair common sense, but none the less it’s something you need to consider.
When you’re looking for the new property, always try and bear in mind this very important question: would you live here? It’s easy to get caught up in a bargain cost, but realisitically, if the property isn’t something you would live in, you might find it hard to rent, or at the very least cause you a lot of bother along the way.
How much work do you want to do?
As a landlord you do have a range of options as to how hands on you want to be. We know plenty of landlords who like to do everything themselves (you will need to be licensed for this in Wales with Rent Smart Wales), while others are happy with the day to day management but perhaps want a letting agent for advertising and reference checks. Other landlords just want to be able to sit back and hand the property to an agent for a fee, so any tenants calls go straight to the agent. It all depends on you, your situation and how comfortable you feel with potential late night calls if the fire alarm won’t stop! Take a look at what your letting agents offer in the area, perhaps the commission will be affordable for you.