No matter whether you’ve just purchased a rental property for investment purposes or recently decided to let out your family home, you probably have a number of questions and concerns as a new landlord. Letting your property is not a decision that should be taken lightly, and many new landlords struggle to navigate their way through the process of renting their homes. Here are five tips to help make your transition to landlord a smooth one.
Notify Your Mortgage Lender
Did you purchase property with the intention of letting? If so, you probably already have a buy to let mortgage, or your lender is aware of your intentions.
However, if you were the owner occupier of the home when you took out the mortgage and are now planning on letting the property, you will need to inform your lender right away. Depending on your lender, you may be required to switch to a buy to let mortgage.
Purchase Landlord Insurance
As a landlord, you may be under the assumption that your home insurance will protect your property, but in most cases, standard home insurance will not cover property that’s let to tenants. Special landlord insurance is required to provide you with the vital protection you need.
A standard landlord insurance policy will cover:
- Buildings – This protects the structure itself and will cover damage or losses in case of a fire, flood, storm, subsidence or other natural disaster.
- Contents – This pertains to any items in the home that you, as the landlord, own. Contents may include furniture you provide, flooring and fixtures.
- Landlord liability – This covers any third-party claims brought against you. Should someone become injured on your property, you will be held liable for any damages awarded from a personal injury claim.
- Loss of rent – If your property is damaged or destroyed and becomes uninhabitable, loss of rent will cover any rental income you may have lost as a result. This will ensure that you can continue making mortgage payments as usual.
- Alternative accommodation – This will cover the cost of relocating your tenants should your property become uninhabitable.
There are also additional policies that you can purchase to cover other issues or incidents. One supplemental policy that many landlords purchase is rent guarantee, which covers lost rent if your tenants refuse to pay.
Some insurers will also include accidental and malicious damage cover in their basic policy. This will cover any damages or losses caused by tenants either unintentionally or on purpose.
Consider Hiring a Professional to Find Reliable Tenants
In order to make your investment worthwhile, you need to find tenants who are reliable and responsible. This can be a tricky task, and screening potential tenants can be time consuming.
A professional lettings agent will take care of this for you. A lettings agent will not only market your property, but also vet potential tenants to ensure they meet your standards.
In some cases, and for an additional fee, agents will manage your property for you.
If you do decide to find tenants yourself, make sure that you perform a thorough reference check on each tenant’s background.
Make Sure That Your Property is Appealing
What type of tenants are you hoping to let to? It’s important to understand the needs and demands of these tenants to ensure that your property is appealing to them.
Students, for example, will look for properties that offer high-speed internet connection and are close to the university or nightlife hotspots.
Ensure that You Have a Proper Tenancy Agreement
Some new landlords are tempted to simply let their property to friends or family without an agreement in hopes that everything will go well. Unfortunately, without a proper tenancy agreement, you have no recourse as a landlord to recoup money for damages or unpaid rent.
Assured shorthold tenancy agreements are standard for landlords. Make sure that your agreement is for at least six months and will guarantee that your property will be returned to you at the end of the agreement.
While standard agreements will help protect both you and the tenant, it’s also important to customise your agreement. For instance, if your property includes a garden, you may want to include a clause in the agreement that states that tenants are responsible for the garden’s upkeep. These clauses will help ensure that your property is well-kempt by your tenants.