10 Things Every First-Time Landlord Needs To Know

Becoming a landlord is an exciting prospect. With over 2.82 million landlords in the UK, generating passive income from a rental property appeals to many. But running a successful rental business can be challenging. Unlike any other type of business, it’s essential to find the right tenants, get the monthly rent price right, keep the property maintained, and stay updated on landlord-tenant laws.

What are the ten most important things you should know as a landlord? We’ve compiled a list of the top ten things every first-time landlord must know for a successful tenancy. 

Treat your buy-to-let like a business

The first thing to remember is that your rental property is a business, even if it’s not your primary source of income. This means keeping track of your finances, fulfilling your responsibilities as a landlord, and keeping the property in good condition for your tenants. Although you want to be friendly with tenants, keeping the relationship professional is best.

Set the right rental price

Getting the rental price spot on is crucial for your buy-to-let. First, the amount of rent you charge impacts your cash flow and yield. However, if the price is too high, you will struggle to find good tenants who pay rent on time. On the other hand, if the monthly rent is too low, you may attract a poorer quality of tenant, which you should avoid. Check the average rental price for the area where your property is located to help make the best judgment.

Always vet potential tenants

Vetting a prospective tenant is important before signing a lease. Vetting involves checking references, credit history, employment, and previous addresses. It’s good to remember that it’s easy to let a tenant move in. But it can be difficult to evict a tenant who may always be late with rent or damage the property, which may put you out of pocket. Vetting is imperative to make the right tenants move into your property.

Never discriminate against tenants 

The tenancy laws in England and Wales make it illegal to discriminate against tenants. This includes refusing to rent a property based on sex, gender, race, religion or disability. The law also requires you to treat everyone the same in rental policies. 

Have a written tenancy agreement 

You should always put everything in writing. A tenancy agreement should include the monthly rental amount, late rent fee, tenant responsibilities, and pet policy. Our lettings team can help draft a tenancy agreement on your behalf to check the best policies are put in place.

Take out landlord insurance

It would be wise to protect yourself against unforeseen events. Like house insurance, landlord insurance covers your property in the event of damage. However, you could also consider insuring for unpaid rent, eviction costs, and damage to furnishings.

Encourage tenants to take out tenant insurance

Tenants’ insurance covers a tenant’s personal belongings in case of fire, theft, or accidental damage. Although not required by law, it’s a good idea to encourage tenants to get insurance on their belongings in case anything bad happens.. Many tenants wrongly assume that landlords’ insurance covers their personal items, so you should make sure to address these concerns with your tenants before they move in.

Know your responsibilities as a landlord

As a landlord, you are legally responsible for maintaining the property in a safe, secure, and habitable condition throughout the tenancy agreement. This includes checking that all appliances meet current safety and performance standards. You must address any necessary repairs promptly, including issues related to damp, mould, and pest infestations, to prevent further damage and support the well-being of your tenants. Gas appliances must be inspected annually by a registered engineer, and a valid Gas Safety Certificate must be provided to tenants. 

Additionally, any security deposit must be placed in a government-approved tenancy deposit protection scheme. This scheme safeguards the tenant’s funds for the duration of the lease and helps you comply with legal obligations.

Have an inventory for your rental property

The inventory lists everything in the rental property that you have provided to the tenant that could potentially get damaged. This can include the walls, fittings, fixtures, furniture and doors. You should have two copies, one for you and one to give to your tenant. The tenant should check over the inventory against the property’s condition when moving in and sign both copies, along with you, so that an agreement on the condition is put in place.

Stick to the law when ending a tenancy 

A tricky area for first-time landlords to understand is when they want to end the tenancy agreement. It’s vital to follow specific rules on the reasons for ending a tenancy early. This may include how much notice to give, eviction procedures, and fair reasoning. An example of a landlord breaking the law and tenancy agreement would be changing the locks without a ‘warrant of possession’ from the local court; this is illegal as the tenant still has a legal right to access the property during the agreement.