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How to Rent Out Your Property?

Property Saviour » Landlord » How to Rent Out Your Property?

Whether you have become a landlord by chance or you are thinking of investing in property and becoming a full-time landlord, renting out your properties comes with many responsibilities, problems, and challenges. If you are a new landlord, here is some advice for you.

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Why rent my property?

People may choose to rent out their property for a variety of reasons. The most common is financial. It could be a temporary solution while they are elsewhere and don’t need to sell it.

The rental income can cover the mortgage payments and give an additional source of income. Additionally, it could be a great way to start a business and assemble a collection of rental properties.

How to rent out your property?

You have two options for managing your rental: do it yourself, or enlist the help of a letting agent.

Additionally, you must decide how to offer the property – as a single unit or divide it into multiple occupancies (HMOs). HMOs generally yield a higher return but will require more money to convert the property and more responsibility.

How To Rent Out Your Property
The rental income can cover the mortgage payments and give an additional source of income.

Talking to your mortgage lender

If you’re thinking of renting out your property for the first time, you should speak to your current mortgage lender.

If your rental period is less than 12 months, your lender may permit you to let your property on the existing mortgage terms. For a long-term rental, you may have to transfer to a ‘buy to let’ mortgage.

Landlord licensing

Licensing schemes for landlords are in operation in some areas of the UK. These are designed to improve the standards of property management. There are three varieties of licensing schemes: mandatory, additional, and selective.

  • Mandatory licensing requires that HMOs (Houses in Multiple Occupation) in England and Wales must be licensed.
  • Additional licensing may be necessary if the local council feels that HMOs are being inadequately managed, or if the terms of mandatory licensing do not cover enough areas.
  • Selective licensing may require all landlords in an area to get a licence or take a ‘fit and proper person’ test.

It is important to check with your local council to see if they operate a licensing scheme. If they do, a small annual fee may be required.

Tax and national insurance

Rental income is considered taxable income. To calculate your income tax, you must first subtract your expenses from the profit you make as a landlord. Mortgage interest payments also qualify for a 20% tax reduction.

The amount of income tax you owe will depend on your tax bracket, other sources of income, and whether the property is owned by you or a company.

The first £1,000 of any income from property is exempt from taxes. Any income that exceeds this amount must be reported in a self-assessment form.

When it comes to National Insurance contributions, landlords only have to pay Class 2 contributions if their profits are above £6,725 per year and the following conditions are met: it is their main job, more than one property is rented out, and they are buying new properties.

How Much Can I Rent My Property For
Making the rent too high can make your property less attractive, but setting it too low could make it harder to find the right tenant.

How much can I rent my property for?

Knowing how much to charge in rent will depend on the size of the property, the nearby amenities, the prices of similar rentals in the area, and the incomes of potential tenants.

Making the rent too high can make your property less attractive, but setting it too low could make it harder to find the right tenant. There are several rent calculators online to help you determine a good rent price.

What are the legal responsibilities for landlords?

Gas and electrical safety responsibilities for landlords

Landlords have a legal obligation to carry out regular gas safety and electrical inspections on their properties. A Gas Safety Certificate should be checked annually by a gas-safe registered engineer.

This inspection and test relates to all the gas appliances and systems in the rental property. Additionally, Electrical Safety Regulations require an electrical installation check to be conducted every five years by a qualified and competent person scheme member.

Furthermore, landlords must provide tenants with copies of both the electrical and gas safety certificates.

Fire safety regulations

Alarms should be installed on every floor and a carbon monoxide alarm should be in every room with a solid fuel burning appliance.

Moreover, tenants must have access to external or internal escape routes, while furniture and furnishings must be fire-resistant. Fire extinguishers are also a legal requirement in HMOs.

Right to rent checks

Right-to-rent checks are compulsory for landlords and letting agents. Before any tenancy can be agreed upon or started, landlords must prove that their tenant is legally allowed to rent a residential property in the UK.

Landlords will be fined heavily if they do not do the checks or let a tenant who fails the checks stay.

What-is-a-Tenancy-agreement
Landlords have a responsibility to safeguard their tenants' deposits and refund them at the end of the tenancy, with any deductions or expenses taken out.

Tenancy agreement

Once you have identified a tenant, you’ll need to draft a tenancy agreement. This is a written contract that outlines the duties of both parties.

Assured shorthold tenancy agreements are the default type of agreement for private tenants in England and Wales. You can find standard templates online which can be used as the basis for your document.

Protecting your tenant’s deposit

Landlords have a responsibility to safeguard their tenants’ deposits and refund them at the end of the tenancy, with any deductions or expenses taken out.

Even if the deposit is paid by someone else, such as a friend or family member of the tenant, the landlord must use a government-backed tenancy deposit scheme. They can ask their agent to do this on their behalf, but never the tenant.

Landlord insurance

Landlords are not obliged to buy specialist buildings and contents insurance for their rental properties, but it’s highly recommended that they do. Standard policies won’t cover them for scenarios such as tenants not paying rent or causing damage to the property.

Landlord or ‘buy-to-let’ insurance, on the other hand, includes extras like public liability cover, loss of rent, emergency cover and legal expenses. Premiums may increase depending on the type of tenant renting the property.

For instance, students are seen as a bigger insurance risk than professionals.

What rights do landlords have to take back possession of their property
The main way of evicting a tenant in an assured shorthold tenancy is via a Section 8 or a Section 21 notice.

What rights do landlords have to take back possession of their property?

A range of solutions are available to landlords if they need to take back possession of their premises.

The main way of evicting a tenant in an assured shorthold tenancy is via a Section 8 or a Section 21 notice. If the occupants of the property have no legal right to stay there (e.g. squatters), a court order can be obtained to take back possession.

Alternatively, the landlord and tenant can agree to surrender the property, or the landlord can demonstrate that the tenant has abandoned the property.

How can We help?

As you can see, being a first-time landlord comes with a lot of responsibilities and tasks. Not everyone is suited for property management and that’s okay!

If you would rather sell your property, feel free to reach out to us! We buy houses under any conditions, stress-free.

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