How to Prepare to Be a Landlord for the First Time

Collaborative post by another author. People often become landlords when they purchase a larger second home and rent out the first one, move in with a partner and rent their original home out, or decide to invest in a rental property. It doesn't have to be a whole house though, some people just let out a spare bedroom.

The situation will vary depending on whether you’re a resident landlord, or the entire property is rented to one or more tenants. Other considerations apply too.

a key ring with a house on

Here is how to prepare to be a landlord for the first time. 

Assess How Much You Can Receive

The rental revenue is just one part of the rental equation. Look at online listings from Zoopla, Rightmove, or Gumtree to get an initial price range.  Note what is and is not included in the rent – some rental listing prices include all the bills, others do not include council tax or the electricity bill. 

Most rental properties are vacant or under refurbishment in between tenants. Factor in void periods where no rent payments will be received. Also, property maintenance is needed periodically just as it is with your primary residence. Deduct maintenance estimates from the revenue. Adjust the figures as you become more experienced. 

Arrange the Rentals or Use a Letting Agent?

Landlords may need to pay fees to a letting agent for listings or managing the tenancy. 

There are some free places to advertise a rental however, you’re dealing with anyone and everyone with no initial vetting. This will consume a lot of time to weed out the bad apples so you can find dependable tenants. 

Using a letting agent reduces some of the headaches involved with being a landlord. They can collect the rents, arrange new rentals, and vet applicants on your behalf. The fees depend on how involved the letting agent is in the property. Full property management typically costs over 15 percent of the monthly rental income and sometimes 20 percent, whereas a tenant finder service costs less. 

Get Correctly Insured

Standard building and contents insurance will not cover being a landlord. Letting the property without permission from the insurer or mortgage lender will invalidate any insurance claim. 

It’s advisable to have landlords insurance when renting out a property. Unintended damage to the property or contents can occur. Typically, tenants take less care in a rental. Also, natural wear and tear are greater, so replacing furniture and redecorating is needed more frequently than in an owner-occupied home. When you get landlords insurance, be sure that it covers all that’s required.  

Licensing and Other Responsibilities

As a landlord, there are regulations and various rules to be aware of:

Electrical System

The landlord is responsible for providing an electric system that’s safe to use. This includes all connected appliances, their fittings, light switches, and wiring. 

Gas System

Gas equipment must be installed by a Gas Safe engineer. They also must perform yearly safety checks on the gas appliances. 

The engineer will produce a gas safety check record for the landlord. This should be made available to the tenants. Records are available on or before 28 days following the inspection. 

Fire Prevention

A smoke alarm is required on each level or story of a building. Furthermore, a carbon monoxide alarm is needed in rooms with appliances that burn fuel sources such as coal or wood. 

Rental properties with five people from different households – referred to as a large House in Multiple Occupation (HMO) require accessible extinguishers and fire alarms installed. 

In all cases, escape routes are needed from all levels. Furnishings and added furniture must have a Fire Safe rating too. 

House in Multiple Occupation (HMO)

Some rental listings are marked as HMOs. These are registered and regulated by the local council.

An HMO is a rental property that’s rented by multiple people from several households who use communal facilities, like a kitchen or bathroom.

The landlord often requires a licence from the council for a standard HMO where three people, not from the same household, are renting it. Properties with 5+ tenants from separate households are large HMOs with slightly different requirements, including additional fire safety requirements. 

Make a Long-term Commitment

Becoming a landlord is a serious matter. A fair amount of preparation is required beforehand even before the first tenant moves in.

Expect it to be hard work initially and inconvenient at times. However, whether you’re planning to rent a spare bedroom, a former family home, or to purchase a rental property, it can also be rewarding too. Go into it with your eyes open, make the necessary preparations, and it will go much more smoothly.

Don’t be daunted by becoming a landlord. It isn’t as hard as some people make it out to be. And if you don’t want phone calls in the middle of the night, use a letting agent. 

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