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How To Rent Out Property For The First Time

renting out a property for the first time

So, you’re considering renting out a property for the first time? Congratulations! This can be a great way to make some extra money, but it’s important to understand the process and what’s involved.

In this article, we will discuss the basics of renting out a property in the UK, from assessing costs vs returns to preparing for new tenants. We’ll also look at some of the legal requirements you need to be aware of, as well as the pros and cons of using a letting agent. So read on for all you need to know about entering the world of rental property.

The Benefits of Renting out Property

The benefits of renting out a property are numerous. For starters, you can make a good return on your investment, as rental prices in the UK continue to rise. You also have the potential to receive regular income and tax breaks, and there’s no need for day-to-day management as this can be handled by a letting agent.

Of course, there are some risks involved in renting out a property, but with careful planning and preparation you can minimise these. By following the advice in this article, you’ll be well on your way to renting out your property successfully.

Assessing Costs vs Returns

Before you rent out a property, it’s important to assess the costs vs returns. This will help you to determine whether renting out is the right decision for you, and if so, how much rent you should charge.

There are a number of costs associated with renting out a property, including mortgage payments, insurance, repairs and maintenance, and agent’s fees. You’ll also need to factor in void periods (the time when the property is unoccupied) and any potential losses you may incur if the tenant moves out early.

On the other hand, you can expect to receive rent payments every month (plus expenses such as council tax and utility bills), and you may be able to claim tax relief on some of your costs. So it’s important to do your research and make a balanced decision based on the facts.

HMO Regulations

If you’re planning to rent out a property as an HMO (House in Multiple Occupation), there are some additional regulations you need to be aware of. For example, all HMOs must have a license from the local council, and the property must meet specific safety standards. These include having a working fire alarm and carbon monoxide detector, as well as being properly ventilated.

You’ll also need to make sure you have the right insurance in place, as standard home insurance policies often don’t cover HMOs. And finally, you’ll need to be prepared for more frequent inspections from the local authority.

decorating a rental property

Decorating a Rental Property

When decorating a property for rent, it’s important to keep in mind that not everyone will have the same taste as you. So try to choose a neutral style that will appeal to as many people as possible.

Some landlords allow their tenants to put pictures up on the walls or to make minor alterations, but others do not. It’s up to you to decide what you’re comfortable with, but it’s a good idea to have some guidelines in place so that there’s no confusion later on. It is best to include this in the tenancy agreement. Speaking of which…

What to Include in the Tenancy Agreement

Once you’ve found a tenant, it’s time to draw up a tenancy agreement. This is a legally binding document that sets out the terms of the rental arrangement and should be signed by both parties.

Some of the things you’ll need to include in the tenancy agreement are:

  • The names of the landlord and tenant/s
  • The address of the property being rented
  • The start date and duration of the tenancy
  • The rent amount and how often it should be paid
  • Details of any bills that are included in the rent (e.g. council tax, water, gas)
  • The landlord’s and tenant’s responsibilities
  • Any rules about smoking, pets, guests, noise levels, etc.

It is important that all of this information is included in the agreement so that there is no confusion later on. If you’re not sure what to include, you can get help from a solicitor or use an online tenancy agreement template.

Preparing for New Tenants

Once you’ve signed the tenancy agreement, it’s time to prepare for your new tenants. The first thing you’ll need to do is set up the utility bills in their name. This includes gas, electricity, water and, if applicable, TV licence and broadband.

You’ll also need to arrange for council tax to be paid by the tenant. The amount will depend on the property’s band and the number of occupants, but you can find out more on the government’s website.

It’s also a good idea to create an inventory of the property, including all furniture and appliances. This can help to avoid any disputes between the landlord and tenant later on. You can either do this yourself or hire a professional inventory company.

It’s also important to make sure that you have the correct safety features in place before your new tenants move in. This includes smoke alarms and CO detectors, as well as locks on all external doors.

You may also want to consider giving each tenant their own set of keys so that they can come and go as they please. It’s also a good idea to have a spare set of keys in case of emergencies.

landlord responsibility

Landlord Responsibilities

As a landlord, you’re responsible for certain repairs and maintenance tasks, such as fixing leaks and repairing any structural damage to the property. However, you’re not obliged to carry out superficial improvements or make repairs if the tenant is responsible for them.

You should also be available to deal with any problems or emergencies that may arise, and you should give your tenants reasonable notice before entering the property. This is important because even though you own the property, your tenants have a right to privacy.

In general, you should give your tenants 24 hours’ notice before entering the property, unless it’s an emergency. If you need to carry out repairs that will take longer than this, you should discuss it with the tenant beforehand and agree on a time that is convenient for both of you.

Legal Requirements for Landlords

There are also a number of legal requirements you need to be aware of, such as:

  • The Housing Health and Safety Rating System (HHSRS) – This is a system used by local councils to assess the health and safety risks in residential properties. Landlords must make sure their property meets all the relevant safety standards.
  • An Energy Performance Certificate (EPC) – This must be provided to tenants before they move in, and must be renewable every ten years. An EPC shows that the property is energy efficient and how much it will cost to heat and light.
  • The Tenant’s Right to Rent – This law came into effect in February 2016 and states that all landlords must check their tenants have the right to rent in the UK. People who may be ineligible include those who are in the country illegally or those who have overstayed their visas.
  • The Tenancy Deposit Scheme – This is a scheme that protects tenants’ deposits and ensures that they get their money back at the end of the tenancy, providing they have met all the terms of their agreement. There are many cases of unscrupulous landlords refusing to return deposits, so this scheme offers valuable protection.
  • Tax and NICs – Landlords are required to pay tax on their rental income, as well as National Insurance Contributions (NICs). It’s important to keep accurate records of your income and expenditure, as you may be able to offset some of your costs against your taxable income. Potential deductibles include mortgage interest, insurance premiums and repairs.

The Pros and Cons of Letting Agents

Many landlords choose to use a letting agent to manage their property. There are various benefits to hiring a letting agent including:

  • The agent will take care of finding tenants and screening them for suitability.
  • They will also draw up the tenancy agreement and deal with any legal issues that may arise.
  • The agent will be responsible for collecting rent and handling any maintenance issues.
  • The agent can oversee the property when you are on holiday or if you live abroad.

However, there are also a few drawbacks to using a letting agent:

  • The agent will charge a commission, typically around 12-15% of the rent.
  • They may also charge for other services such as drawing up tenancy agreements or arranging repairs.
  • If the tenants cause damage to the property, the agent may not be held liable unless you can prove that they did not take reasonable steps to prevent it.

How to Deal With Problem Tenants

Unfortunately, the world of tenants reflects society at large and so you will occasionally come across problem tenants. The most common problems include:

  • The tenant stops paying rent – If this happens, you should contact the tenant as soon as possible to try and resolve the issue. If they are unable to pay, you may be able to agree on a payment plan. However, if they refuse to pay or make any effort to resolve the issue, you will need to take legal action to evict them.
  • The tenant causes damage to the property – If the tenant damages the property, you can deduct the cost of repairs from their deposit. However, if the damage is extensive, you may need to take legal action to evict them and claim compensation through the courts.
  • The tenant is disruptive to other tenants or the neighbours – If the tenant is causing a nuisance, you should first try to speak to them and resolve the issue informally. However, if this does not work, you may need to take legal action to evict them.

The most important thing is that you take action quickly and decisively if you have a problem tenant. The longer you leave it, the more difficult it will be to resolve the issue. Make sure you keep any evidence of the tenant’s behaviour, such as letters or emails, and contact a solicitor if you need advice or support. This evidence may be crucial if the tenant takes legal action against you for unfair eviction.

eviction rules

Eviction Rules

If you have problem tenants who don’t pay their rent or cause damage to the property, you may need to evict them. The eviction process can be complicated and time-consuming, so it’s important to know your rights and responsibilities.

In general, you can only evict a tenant if they have breached the terms of their tenancy agreement, such as by not paying rent or causing damage to the property.

You must also give the tenant a valid reason for eviction, such as:

  • The tenant has caused nuisance or annoyance to other residents.
  • The tenant has been convicted of a criminal offence committed on the premises.
  • The tenant has used the property for illegal purposes.
  • The tenant has failed to comply with a previous notice to leave.

Once you have served the tenant with a notice to quit, they will have a set period of time to leave the property. If they fail to do so, you can apply for an eviction order from the court.

If the tenant still doesn’t leave, the court will appoint a bailiff to evict them. The bailiff will give the tenant a set period of time to leave the property, after which they will forcibly remove them from the premises.

Final Thoughts

Renting out a property for the first time can seem like a daunting task, but with a bit of preparation and knowledge, it can be a relatively easy process. By following the advice in this guide, you can make sure your property is rented out quickly and efficiently, with minimal hassle. If you have any issues with your tenants, remember to take action quickly and decisively – the sooner you deal with the problem, the easier it will be to resolve.

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