Once you have made the decision to let out a property, there is some work to do to get yourself and the property ready. There is a lot to consider, including a myriad of legislation, regulation, taxation, consents etc. With some research, detailed planning and good advice you can ensure that both your and your property are ready for the private rented sector and that you become a successful landlord.
1. Getting your property ready
There are some obvious, but important considerations in getting your property ready;
Know your target market - If you are targeting young professionals as opposed to letting a HMO, the physical attributes and presentation of your property will need to be different. Talk to your letting agent to understand who your target market should be and whether your property is appropriately presented to attract your targeted tenants.
Get high quality photographs and ensure the property is well marketed on various websites. - You will know yourself from when you “browse”, that you need something to catch your interest and attention. Photographs, pricing and words matter. Work with your agent to build a listing that will be attractive to your targeted tenants. Also, based on your target market, ensure that you use a myriad of distribution channels to get your property advertised including signboards, your agents website, property portals, social media etc.
Remember, first impressions count - This doesn’t just apply to the inside, but also how the property looks from the outside. Buying and renting property is as much an emotional decision as it is a logical decision. Most renting decisions are made in the first couple of minutes of the tenant being at the property. Also remember that if you show that you look after and care about the property, there is every chance your tenant will behave in the same way.
Understand the legal obligations - Please do not take these obligations lightly, as the implications may be significant and range from losing your property, to being fined or imprisoned. It’s a common misconception that letting a property is very straightforward; indeed, many agencies will simply tell you not to worry as they have “got it covered”. Well unfortunately it’s not quite that simple. There are about 145 laws and over 400 regulations that you need to meet as a Landlord to legally let a property. Do your homework and make sure you comply. See more information on landlord legal obligations here https://www.aspireresidential.co.uk/news/landlords/33-landlord-legal-requirements
Long term plan - build a five-year plan for the property to ensure it remains well maintained and you maximise the chance of retaining your tenant. Building a plan will help you adequately budget for repairs and maintenance and also ensure that you are able to continue to earn the best rent.
For further information you should also read our blog on finding and retaining the best tenants at https://www.aspireresidential.co.uk/news/landlords/27-finding-great-tenants
2. Getting yourself ready
Budget - make sure you have done the math and that you have your finances and taxes in order. Ensure your budget takes account of mortgage payments, letting agent fees, provision for repairs and maintenance and ground rent (for leaseholds). For more information on returns and yields from investment property read our blog at https://www.aspireresidential.co.uk/news/buying/39-jargon-buster-yield
Approvals - ensure you have the necessary approvals from the freeholder of leasehold property, mortgage companies, building insurance companies etc.
Memberships - make sure you have appropriate memberships and registrations such as with the Information Commissioners Office (ICO) in place.
Decide whether to use a letting agency - In making this decision take into account that;
- Property management is labour intensive and generally involves a degree of “hassle”. Some people have the time and the energy to take this on, but it’s not for everyone.
- When things go wrong, they normally take time to resolve, which means a lot of phone calls, visits to the property etc. And, when things go wrong, its typically not between 9.00am and 5.00pm!
- Being responsive to tenant needs is probably the most critical component of a successful tenant retention strategy, so be prepared to act quickly.
- You will have to perform regular inspections of the property to meet your legal obligations and to ensure the property is being cared for. You will also have to coordinate inspections and tests for gas safety, smoke and carbon monoxide alarms, electrical, PAT, EPC etc.
- Remember that as well as being time consuming, property management is “technical”. As already stated, there are about 145 laws and over 400 regulations that you need to meet as a Landlord to legally let a property. The law relating to letting property continues to evolve and change quickly. You will need to keep abreast of legislative changes.
While you might be able to save 8-10% of your annual rental income by managing the property yourself, that saving quickly disappears if you have longer void periods, more frequent turnover of tenants, no appropriate preventative maintenance of the property or if you fall foul of any of the legal obligations placed upon you as a landlord. It’s a big decision, so please feel free to talk to us about any matters that concern you should you choose to manage your own property.
if considering letting out a property you should also read our blog on best practices https://www.aspireresidential.co.uk/news/landlords/31-letting-residential-property-best-practices and the answers to questions we are frequently asked by landlords https://www.aspireresidential.co.uk/news/landlords/38-landlord-frequently-asked-questions
You can also read more about how Aspire Residential can help you with your strategy as a landlord here https://www.aspireresidential.co.uk/news/landlords/47-landlord-strategy-managing-return-risk-and
Important note for landlords – The above blog is provided for information purposes and guidance only and does not represent the full extent of legal obligations and duties placed on landlords. Landlords should seek appropriate advice and, where necessary, legal advice before renting property in the Private Rented Sector. The use of information provided in this blog is subject to the terms and conditions of use of our website.
