Low interest rates for savers and changes to pension regulations are encouraging more and more people to turn to property, both for capital investment growth via increases in the property value, as well as annual yields via rental income.
Alongside this, is the growing number of so-called “Accidental” Landlords, whereby the property owner is moving to a new property or location for work and chooses to let the original home. In fact, our partners, LV=, report that 55% of Landlords never intended to let, but fell into it due to circumstance.
Letting A Property Can Be Daunting
When you look to let a property for the first time and take the bold step of becoming a Landlord, the entire process can feel quite daunting. From specialist mortgages, gas certification to Landlord Insurance – the list of tasks can seem huge, as such, it is import to plan the process carefully before you begin.
Letting To-Do List
Before you embark on the buy-to-let journey, prepare your lettings “To Do” list which should include:
#1 Rental Agreement
Drawing up a rental agreement that defines the terms of the rental, including any restrictions, liabilities and occupancy guidelines for tenants.
#2 Tenant Referencing
Ask for references from potential tenants, or alternatively use a specialist tenant referencing service. This is recommended even for short-term rentals as selecting the wrong tenant in a rush to get the property let can be detrimental in the long term, often proving to be both emotionally and financially stressful.
#3 Tenancy Deposit
Request a tenancy deposit which will refunded if there is no damage to your home. From 6th April 2007 Landlords were required to utilise a government-backed tenancy deposit scheme (TDP). In England and Wales your deposit can be registered with:
#4 Buy-To-Let Property Insurance
A standard household insurance policy will typically only provide cover if the property is owner occupied, or occupied by a family member. If the property is let under an Assured Shorthold Tenancy Agreement (AST) then you will need to arrange specific Landlord Insurance cover to protect the property.
As a Landlord you owe a duty of care to your tenants and should they injure themselves and hold your responsible (for example, falling down the stairs as a result of a loose handrail), you could face a costly compensation claim. Insurance for Let Property will also normally extend to cover your legal liabilities under the Property Owners Liability Insurance section.
Another key extension under Landlord Insurance protection is “Loss of Rent” cover, which will extend to cover your lost rental income following an insured loss (such as a fire or flood), while the property is restored to its existing pre-loss condition.
#5 Hire a Property Manager or Letting Agent
While over 50% of people now choose to manage their relationship with the tenant themselves, as a new landlord, you may prefer to employ the services of a professional property manager or letting agent. This may be particularly advisable if you will be living abroad or may not have easy access of the property.
Protect Your Personal Property
Accidental landlords should also consider how they will look after their possessions, particularly if you are renting the property furnished. The following “To Do” list should help:
- If you are renting for a short period set aside a locked place in your home to house personal items such as clothing and valuables.
- Take valuable items to a locked storage facility, a family member’s home or a bank vault.
- Change alarm codes after each letting is complete.
- Provide keys to only one door of your property so that you have to change only one lock after the tenants leave.
- Photograph and / or video all areas of your home before the rental takes place in case damage occurs while you are away.
- Speak to your neighbours and explain that you are letting and ask them to be vigilant and report any unusual activity.
- If you are leaving a phone, ask the supplier to block long distance phone calls from your landline and cap costs.
- Arrange for your post to be forwarded or held until you return if you are working away.
- Provide clear contact information for both yourself and any Letting Agent so that the tenants and your neighbours can contact you quickly and easily in the event of an emergency.
- Provide tenants with a list of service providers, such as plumbers and electricians, in case of a water leak or boiler failure.
FREE Property Insurance Review
Insync specialises in all areas of property cover, from single buy-to-lets to large portfolios. We can Compare Landlord Insurance online from the UK’s leading Insurers in minutes. Alternatively, why not book a free review with one of our expert Gurus who can help you find the right level of cover at the right price.
As well as standard buy-to-let cover we can also offer specialist HMO Insurance meeting the requirements of HMO licensing for multiple tenancy lettings.