Whether you are an experienced landlord or a first-timer, renting out your property can be a daunting prospect. To ease your worries we have compiled a few tips that will help you make sure you and your property are ‘rent ready’:
- Complying with safety regulations
It may seem obvious, but when renting out a home it is crucial you comply with health and safety regulations to make the home suitable and safe for others to live in – and this doesn’t just mean throwing out that open can of beans you left in the fridge. To make a property ‘tenant-proof’ you must ensure that materials and furniture are fire safe, and provide a fire alarm on each floor. It is also best practice to install a carbon monoxide alarm in rooms with a usable fireplace or wood burner, which is a legal requirement in England and is expected to be adopted in Wales soon. In addition, all equipment in the house must be safely installed and maintained by a Gas Safe engineer, who must annually check each appliance for gas safety. The electrical system and all electrical appliances must also be safe for new tenants.
- Making sure all repairs are completed
All repairs should be carried out before any tenants move in, and ideally before any house viewings. As a landlord, you will be responsible for maintaining (and repairing) the property’s structure and exterior, all sanitary fittings such as sinks, pipes and drains, heating and hot water, and electrical wiring, as well as managing damage that is caused by repairs. If you fail to carry out these tasks, there is a risk your tenants may complain to the local council, especially if the house is not seen to be safe or fit to inhabit.
- Deposits and other finances
Before letting our your property you must decide whether maintaining it will be financially viable. Statistics show the average rent price in South Wales is £687 per calendar month, and you must decide whether the amount of rent you charge will leave enough for the general up-keep of the property and still return a profit. One crucial financial cost to consider is insurance. Before renting out your property, you must contact your mortgage provider and make sure you are insured as a landlord. It is important you are aware the rental income will be taxed, and you might have to pay Class 2 National Insurance if the letting is classed as a business.
Remember, when tenants have been found and the deposit has been received, it is essential to put the deposit money into a government-approved tenancy deposit scheme to avoid prosecution or fines.
- Letting through an agency or managing the property yourself
If you have decided to manage and let the property yourself, you must become registered in order to do so. From 23rd November in Wales, all private landlords are required to register with Rent Smart Wales and must obtain a license, which can be granted after relevant training.
If you decide to appoint an agency to manage your lettings, make sure the company you choose is a member of a professional body such as ARLA (Association of Residential Letting Agents). On average, between 10 and 13 per cent of the rental income will be taken as fees to cover admin and maintenance costs. A letting agent will do a market appraisal of the property, find suitable tenants and write a tenancy agreement for you and your tenants to approve.
- Choosing and maintaining tenants
Choosing tenants is of course the most important part of any rental process. You can directly search for tenants via websites such as Spare Room or Gumtree, or pay an agency to manage the process for you. It is important to run credit and reference checks on any prospective tenants to check they can be trusted to look after your property and pay rent on time.
Once you have approved people to live in your property, you can work with a letting agency or a solicitor to draft a contract (normally a six month assured shorthold tenancy agreement) setting out terms and conditions. In addition to normal legal requirements, you can also add reasonable stipulations such as ‘no pets’.
It’s important to be aware that with the latter type of tenancy agreement, tenants must give a month’s notice period either before or after the end of the fixed term agreement, whilst as a landlord, you must give a minimum of two months written notice to the same effect. This ensures you have enough time to replace them, and also manage processes such as the return of deposits.
We hope these tips have been helpful. For more information, call our ACJ Lettings team on 02920 41 51 61.