Introduction

The decision to rent out a property may seem lucrative, however careful thought needs to be undertaken to weigh up both sides of the situation.

 

Research all the regulations

Before considering renting out a property make sure you research all your legal responsibilities, these mainly relate to the fit state and safe residency of the property.

 

Research other properties

Check other properties in the area to determine what would be a fair rental sum.

 

Look into ongoing costs

These would include: -

• Getting the property into a fit state to rent;
• Fire and Gas safety certificates;
• Letting agent’s fees;
• The cost of repairs and updates;
• Tax implications, the rental property is treated as a “business” and any profit may be liable for tax;
• Council tax implications / costs; and
• Insurance – both for the building itself and to cover the loss of rental income.

 

Applying for the mortgage lender’s permission

If you have a mortgage then you will need to check with your lender that they are comfortable with the letting, they may need to transfer the mortgage to a buy-to-let basis, this usually carries a small increase in the annual percentage rate, this additional cost needs to be taken into account.

 

Tax implications

Any profit you make from renting out a property is liable to tax, to research this more click on the link: Income tax when you rent out a property.

 

Registering as a landlord

When you’re planning on becoming a landlord, you need to check with the district council in case they need you to register with them or apply for a licence for a House in Multiple Occupation (HMO).

 

Decide on your type of tenancy

There are three different types of a tenancy agreement; regulated tenancies, assured tenancies and short assured tenancies.

 

Decide on a long-term strategy

Is this plan a long-term situation to assemble a property portfolio or a single property to act as a top-up to a pension or as an additional source of income. Remember that if you want to sell a rented property you will have a delay in removing the tenants first, and then have to carry the cost of an empty property until it sells.

 

Summary

Becoming a landlord is essentially going into business for yourself, and as such, should be given the same careful consideration.

 

How we can help

Lestons can arrange a full examination of any potential property to advise potential landlords, your instructions may range from a brief examination of the salient points to a full report detailing all the potential costs. We would certainly suggest that the tenants(s) should have to sign a formal tenancy agreement, if they have little credit history then we would suggest the consideration of a guarantor.

 

To gain our assistance simply create a case using the link on the top of the page activated by the link at the top of the page, should you wish to start a case the caseworker will send you the suitable payment link.

 

Please note your caseworker can only give generic advice, their role is to prepare your details for handling by our legal team and to act as your point of contact, they will also issue you with your Password and PIN, these will be needed to log onto your client dashboard. From your dashboard you will be able to manage and view every aspect of your case, upload documents, images, files etc.