Thinking of Letting your Home?
Letting your home can be a valuable source of income and buying a property to let is often a good investment for the future. But there are dangers and pitfalls which we’ll point out to you:
Preparation for Letting
Furnished or Unfurnished?
Buy-to-Let
Choosing a Lender
Choosing a Property
Room for Improvement?
Preparing To Let
Finding out what it's worth
Property Essentials
Becoming a Landlord
Preparation for Letting
Whether you’re letting your own home, a second home, or buying a house or flat to let, look at the property carefully - you may need to make some improvements or buy extra furniture or equipment before you’re ready. Keep spending to an absolute minimum until you’ve spoken to an expert to ensure that you get return on capital or investment.
Furnished or Unfurnished?
Many tenants prefer to rent an unfurnished property. If it’s furnished, you may choose to put your furniture in storage for the time being. However, if you decide to let your property unfurnished, it should at least have a cooker, a fridge, light fittings, carpets and curtains.
Buy-to-Let
Buy-to-let properties have become more popular in recent years because mortgage providers are much more relaxed about lending for this type of purchase. For you, not only will you receive the rental income, you are also likely to see the value of your property rise over time.
There are some tax advantages in buying to let: you can claim tax relief against items such as the interest on your mortgage, letting agency fees, and upkeep on the property. You may need an accountant to help you manage the paperwork side.
Choosing a Lender
Some lenders have developed special buy-to-let mortgages. They won’t let you use an ordinary mortgage for a buy-to-let property because you won’t be living there and it represents a greater risk in terms of you meeting the payments. Interest rates also tend to be higher than those on residential mortgages.
It is worth shopping around for a mortgage provider who understands your needs and objectives. A small local building society, for example, may only be able to offer you a buy-to-let mortgage on a single property. The rate of interest may be higher than that of other lenders, but the lender may well have a good understanding of the local market for rental properties.
A national high street lender may be able to offer a lower rate of interest, but its lending decision is likely to be based on a strict set of criteria that you may not be able to meet. Then there are specialist lenders and brokers who are often flexible because they look at the merits of each case individually and can offer more sophisticated products.
Choosing a Property
The key to success with buy-to-let is choosing the right property. If you are buying a property to let, choose one that will appeal to the type of people who live in that area. For example, the main tenant market could be made up of busy professionals, single people or couples who may be looking for: a two or three-bedroom flat or house, good transport links or a small or no garden.
A local agent can tell you what gaps there are in the rental market. Before you buy, check that the house or flat you are interested in conforms to health and safety regulations. Otherwise you could find yourself needing to replace boilers, gas fires and appliances. Have you checked our property search engine? We may have the ideal buy-to-let home.
Room for Improvement?
Take a good look around and see what needs to be repaired or improved. If there’s anything that would put you off living there, the chances are it will put others off too.
As the landlord, you will be responsible for maintaining the exterior of the property and other items such as the heating system and appliances left in the property. For more detailed information, speak to your agent about your responsibilities. Living in a home with leaks or broken windows is unpleasant for anyone, so now is a good time to get minor repairs done. Otherwise, they could put a good tenant off.
Preparing To Let
When people view your property, they will compare it to others available, so its condition and appearance will affect both the rental value and the speed at which it is let. Remember that first impressions count:
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Keep the rooms neat and uncluttered – it makes rooms look bigger and helps prospective tenants to imagine their own belongings there.
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A clean, well-maintained home will set the standard for how you want your property to be looked after in your absence.
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Think about the outside of your property, are the gardens and lawns neat?
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Keep paths clean and free from weeds.
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Remove any limescale in the bathroom, clean plug-holes and mirrors. Replace or clean the shower curtain. Clean the toilet, bath and sink and replace any tiles or grouting as needed.
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Be sure that the kitchen sink is clean and worktop surfaces are clear and tidy. Clean windows, inside and out.
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Make sure the curtains and carpets are clean.
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Paint, repair or decorate as needed.
Finding out what it's worth
Once you’ve made up your mind to let, you need to find out how much rent you can charge for your property. The most reliable way to get this information is to get a market appraisal from local agents.
They will know how much similar properties in the area are being let for, the current market conditions and the demand for your type of property.
Your agent will also give you advice on all the steps you’ll need to take before showing people round.
Property Essentials
To comply with the current safety regulations you’ll need to have all gas appliances checked by a CORGI registered contractor and obtain a Landlord’s Gas Safety Record and check that all soft furnishings conform to the latest fire safety regulations.
We also recommend that you:
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Have all electrical goods checked by a fully qualified electrician.
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You should also continue to have them checked at regular intervals. It is a legal requirement that all electrical items supplied are safe.
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Fit mains smoke alarms. We recommend one on every floor of the building.
Before entering into a tenancy agreement, you may need to obtain consent from:
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Your mortgage lender, if you have one – be aware that there may be extra costs.
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Your insurance companies – both buildings and contents could be affected.
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Your freeholder or managing agent, if you own a leasehold flat.
Becoming a Landlord
Letting out your property isn’t simply a matter of sitting back and waiting for the money to pile up. You have some important responsibilities too, your agent will clear up just what these are, but as a general rule, your tenant pays:
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Council Tax
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Gas bills
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Electricity bills
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Water bills
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Telephone bills
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TV licence
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It is usual for the tenant to look after the garden. However, if you have a large garden or specialist plants, you should consider employing a gardener. In any event, even if your property is unfurnished, it is best to provide a tenant with any tools needed to maintain the garden.
You will need buildings and contents insurance and you must check that you have an element of public liability cover. Your current insurer may also require a higher premium now that the property is being let. For your own protection, you need to make sure you are properly covered.