A recent survey of landlords in the UK found that most of them did not set out to earn an income through property. It often happens almost by accident – a side hustle, with many landlords citing their ‘main’ job as something completely different.
Sometimes landlords have inherited a property and are letting it rather than selling it, or they’ve moved in with a partner and now have a ‘spare’ property. That means there is a lot to learn.
If you’re starting out as a landlord, there are some things you should be aware of, to make the most of the opportunity and to stay the right side of the law.
1. Discover your legal obligations
There are a lot of laws governing landlords and tenants, covering everything from gas and electricity through to the installation of smoke alarms. You must be able to provide records of compliant installation and of regular servicing.
2. Check your insurance
It’s crucial that you inform your insurer that you are intending to let out the property so your policy is not invalidated. You might also consider adding public liability insurance to your cover.
3. Contact your mortgage provider
Mortgage providers, if you have one, will need to know about the change of circumstances as there may need to be alterations to the contract.
4. Tell the taxman
HMRC should also be on the list of people to inform, as rent is classed as an income, so it must be declared. An accountant will be able to help with that, and with tax-free allowances.
5. Get a tenancy agreement
You’ll need a contract with your tenants which is legally binding to protect you both. It should cover the rent, when it’s due, other fees as applicable, notice periods and so on. The Rental Landlords Association has more advice for landlords as they set out.
6. Make an inventory
Another document that can benefit both parties is an inventory, listing all fixtures and fittings and their condition at the start of the lease. Property inventory software can help. If you’re asking yourself, what are the main benefits of using property inventory software, you’re probably a landlord that needs it!
Many landlords prefer to get a management company to take over the running of the property and ensure everything is above board.