4 tips for success as an accidental landlord
Renting a property for the first time can be a daunting experience. The property concerned could be your most significant asset and the income it yields will probably prove vital to the health of your finances. It is all too easy for an inexperienced landlord to make mistakes when the UK property market and the applicable laws are constantly changing.
So, what is an accidental landlord? And if you happen to become one, what can you do to ensure that your enterprise is a success?
What is an accidental landlord?
Not all landlords are wealthy entrepreneurs with extensive portfolios and for whom property is a business. Whilst some people have planned their investment in property with the specific aim of yielding rental income, others unexpectedly find themselves in a situation where they have to become a landlord, at least temporarily.
This could be because they need to move but can’t sell their home and so are forced to rent it. Those who are working abroad for a fixed period and wish to return to their home could also find themselves needing to rent their property, as will those who have inherited a home that they cannot sell or wish to retain for their children. An accidental landlord is anyone who hasn’t intended to become a landlord but finds themselves needing to rent out a property they own.
If that sounds like you, here are four tips to help you make a success of your enterprise.
1. Do your research
Any property left vacant will be a drain on your resources. It is essential to find appropriate tenants reasonably quickly and not to experience too many void periods (periods when the property is unoccupied). But you shouldn’t act before you have done your research.
It is crucial to investigate rents in your area to establish how much you should charge. If you set the rent to high, you will put off potential tenants. On the other hand, if you charge too little, the property may yield little profit after you factor in the cost of maintenance and repairs.
2. Know your responsibilities
You have responsibilities as a landlord and failing to meet them could land you in hot water. It is essential to have the correct rental agreement, to check that your tenants have the ‘right to rent’ and to lodge the deposits you collect in a government-backed scheme. You will be responsible for ensuring that the property is safe, and this will involve contracting a registered engineer to perform checks and an investment in furniture which is fire resistant.
There are serious issues to consider, and you should seek advice if you are unsure as to how to proceed. There are currently some 150 laws that landlords must adhere to, and the laws could change at any time. Ignorance is no defence if you find yourself in court.
3. Be prepared
If you are to achieve the highest possible rental yield, you must establish how best to present your property. Find out what kind of tenants your property is likely to attract and what they will be looking for. Students will need a desk in each bedroom and young professionals may favour cotemporary furnishings. Present your property to appeal to your target market and complete any repairs and maintenance before attempting to market it. It might be worth exploring whether it is best to offer your property furnished or unfurnished to meet the demand in your area.
4. Vet your tenants
Landlords who invest in properties don’t want to see them damaged, but usually for financial reasons not emotional ones. If you are letting your own home or your inheritance, it will have sentimental value, making disrespectful tenants an even less welcome prospect.
You need to feel confident that you have chosen the right tenants and so you should meet them and check their references. A credit check will give you greater peace of mind and you must ensure that they have the ‘right to rent’ in the UK.
Perhaps the best accidental landlord advice we can give is to tread carefully and do your research. Don’t rush the process because you will almost certainly regret hasty decisions. If our accidental landlord guide still leaves you feeling uncertain, we offer a rental management service at Assetgrove together with maintenance packages. With your property in the hands of professionals, you will have the peace of mind you need to move forward successfully.