Becoming a private landlord can be a great source of income – but there are a few things you’ll have to do before starting to rent out your property, beginning with some basic steps to ensure you’re doing everything legally.
Read on to find out how to become a landlord without hitting any snags, harnessing this lucrative form of income by fulfilling all the legislative requirements first.
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What’s the first thing you should do?
First, make sure you understand the legal side of things and whether you’re permitted to rent out your property. If you’re leasing the property, rather than the legal owner, you should make sure sub-letting doesn’t break the terms of your lease.
When you own the property, make sure renting it out is compatible with your insurance, mortgage and any other commitments.
If you didn’t buy the property with a buy-to-let mortgage and then you decide to rent out your home rather than living in it yourself, notify your lender. Also, check whether your council runs a compulsory landlord licensing scheme.
What types of property can you manage?
There are several different types of property that landlords can manage. These include houses in multiple occupation, student accommodation, holiday homes, family homes, or houses, flats and studio apartments rented out to one household.
Each type of accommodation has its own needs when it comes to managing and furnishing the property. There are certain rules and regulations specific to each property when it comes to things like fire safety. For example, a landlord must fit a smoke alarm on each storey of any rented property.
It is strongly advised that a carbon monoxide alarm is fitted too. This is mandatory in rooms where there is a woodburner or fireplace that’s in use. In the case of an HMO, additional standards must be met, such as providing fire alarms and extinguishers.
Do you need different licences?
At one time, only landlords of HMOs required a licence, but the legislation changed as a result of the Housing Act 2004. This introduced a scheme of selective licencing for private landlords – particularly those in poorer areas, where a lot of tenants receive housing benefits. The legislation came into force in April 2006. It was introduced to combat poor quality private accommodation and reduce antisocial behaviour. In areas that are applicable, every private landlord must obtain the licence by law.
Apply for the licence by contacting your local council. One licence per property is required, although some councils offer bulk rates for landlords who rent out multiple properties. In order to be awarded the licence, a number of standard requirements must be met: the property must have a valid gas safety certificate, the electrical appliances and furniture supplied under the tenancy should be safe, the smoke alarms must work, the tenant should receive the terms of their tenancy in writing and each tenant should supply references.
Furnished v unfurnished
A landlord can choose to offer furnished or unfurnished property. Unfurnished rentals don’t mean the property will be totally bare. The landlord should still provide kitchen equipment such as fridge, freezer, cooker and washing machine, bathroom fixtures and carpets or other flooring, such as laminate.
A furnished rental property gives the landlord more scope when it comes to the items that will be provided. Furnished properties generally include everything a tenant needs to live comfortably. This means sofas, armchairs, beds, wardrobes, dining table and chairs, chest of drawers, dressing table and anything else the landlord chooses.
Letting a furnished property has many benefits. As a landlord, you may get a better price for the rental if you’re offering it fully furnished. The demand may be higher because it’s easier for a tenant to move into somewhere that is all set up and ready to go.
According to a study by property website On The Market, renting out a furnished property in the UK brings in, on average, 21% more income than an unfurnished property, as a higher rent can be charged. Renting out a two-bedroom unfurnished property costs tenants an average of £598 per month, compared with £726 for a furnished home of the same size.
This means the initial outlay on furniture can soon be covered in terms of the rent and in the long-term will earn the landlord far more than the unfurnished equivalent. The outlay can be offset in a relatively short time, considering the average outlay for furnishing a two-bedroom property is around £2,500.
For the tenant, there are clear benefits and a degree of convenience when they walk into a home that’s ready to live in right away.
If you’re a landlord planning to rent out a furnished property, Furniture Pack Solutions has a selection of affordable furniture packages for landlords’ accommodation. Choose from student furniture packages, HMO furniture packs, buy to let furniture packages, bespoke student furniture and more.
Give us a call on freephone 0800 781 9427 or email email@example.com for further information.