How do you start renting a property? As a landlord there are certain things you need to do and I have written a brief summary of some of the things involved in renting a property which I hope you will find useful.
You must ensure that the property is suitable for habitation; if it isn’t, then you need to make sure it meets the correct standards for a rental property.
It is best if the property is newly decorated in neutral colors with a darker colored carpet if possible. It is worth remembering that many estate agents will not rent out a property unless it is decorated to a good standard.
The most attractive rooms in the property should be the kitchen and the bathroom. Is there anything you can do to improve their attractiveness? Upgrading the kitchen and bathroom will increase your chances of renting the property and you may be able to rent it at the higher end of the rental scale for a similar property in your area.
If the kitchen is repairable but the cabinet doors are old and in disrepair, then it may be worth replacing the cabinet fronts and drawers to give them a more modern look without costing you too much. If you need to replace the entire kitchen, think of it as an investment in the property for any future sales.
The minimum you should provide in the bathroom is a mirror. It is better if you can also provide a cabinet and shelf. Make sure the bathroom is not damaged or dirty; you can buy a new one for a couple of hundred pounds at your local DIY store.
Give the property Curb Appeal as if you were selling it. If your tenant sees an overgrown yard with a broken fence, he can rent it to someone else or rent it to you, but agree to pay you less rent. You could also be exposed to litigation if an accident occurs due to the broken fence.
Ask yourself the following:-
* Have I carried out all the necessary checks on this property and do I have all the correct certificates in place?
* Is there anything that needs to be repaired or replaced to prevent possible accidents or problems in the future?
* If I were a potential tenant, would I want to live in this property?
If the answer to any of these questions is NO, you must fix the problem before renting.
Don’t get too emotionally attached to the property and don’t spend a fortune on decor unless you are renting to a corporate market and then you will need to research what the market expects.
If you’re looking to get the best possible rental return, you’ll need to look at other rental properties in your area, for example, is it better to rent furnished or unfurnished properties? In my local area, rental properties are generally unfurnished, but you must provide appliances (washer and dryer, refrigerator, freezer, and stove, and must have drapes or blinds). In the next town over, they are rented out mostly furnished and often to students.
Who is your target market?
You must decide who is most likely to be your tenant. Are you looking to rent to a professional couple, a family, low income or corporate rentals or are you looking to rent to students? If you are renting to students or a group of tenants, you may be required to rent furnished and have a multiple occupancy housing HMO license. Your property and location may dictate your type of market to some extent. If you have a 5-bedroom home in a college town, a student rental may be your best profitable market. If you have a luxury apartment in a big city, then a corporate rental or professional couple may be more suitable. Do some research and do your due diligence first.
Should I use a leasing agent?
You must decide whether to rent the property through a leasing agent or by yourself. If you are renting through a leasing agent, be sure to read all of their terms and conditions carefully. They usually offer a couple of levels of service. They can offer you a tenant search only service where they advertise and set up showings, find the tenant, verify the tenant and create all the paperwork, collect the deposit and set up a standing order for your rent. However, any problems with the property or maintenance will be your responsibility and you must be able and willing to take a hands-on approach.
They will also offer a full service where they will meet the tenant as stated above, but they will also take care of any maintenance and issues and charge you a monthly fee for this service. This is easier but more expensive. Again, be sure to read all of their terms and conditions to see what they actually cover and what their service offers you.
Shopping around
Don’t be afraid to shop around and ask several leasing agents for their terms and conditions. They may ask to see the property first, before sending you any details, but this is normal practice. Or they can just leave you the information in the post. Remember that they expect your business and you want to make sure you get the best leasing agent and the best deal for your money that suits your needs. Make sure you’re happy with what they offer in their service packages and ask them about anything you’re unsure about.
Compare one agent with another, don’t just choose the first one. If you know someone who has used a particular Agent before, ask them what they really think of the service they receive from that Agent. I’m sure you’ll get an honest answer, especially if that person isn’t satisfied with something.
What if I want to quit myself?
With the costs involved in rental agent fees, you may decide that you prefer to rent the property yourself. You will need to advertise your property for rent. You can advertise in the local newspaper, in store windows, and on free internet classifieds sites, or ask friends and colleagues if they know of anyone looking for a rental property. If you have a large company in the area, ask if any of their employees are looking for properties to rent and if it would be okay if you put a little notice on their bulletin board, you never know they might say yes.
It’s a bit more difficult to advertise on the big property websites unless you can pay a fee to a third party, like a real estate agent, to place the ad on the sites for you. There are some agents that offer this service, such as H&M Property Services, who charge you a fee of £49.00 for your listing to appear on the major rental sites.
You can also get a FOR SALE board made to put outside the property. I know someone who bought a couple of signs on eBay for £25.00 that included his phone number. The signs were made on a plastic board, but this person attached them to a wooden sign with a pole that they had created and the signs looked pretty professional.
What checks and certificates do I need?
You will need to have certain checks carried out. If you are leaving through an agency, check to see if they provide any of these services as part of your package as no one pays twice.
You will need an EPC – Energy Performance Certificate which is now law and allows the prospective tenant to see what rating their property is performing at. It’s a bit like the energy ratings you get on a new appliance, only it’s related to how energy efficient your property is. They usually cost upwards of £50.00 plus VAT. You can contact a local rental agent or estate agent to ask if they can recommend someone, or try typing “EPC in London” (substituting London for your local area, of course). Better yet, if you know of another landlord who has had one done recently, ask who they used.
On May 5, 2009, The Times newspaper stated that the Government will introduce a Green Paper within the next 10 days which will require all landlords in England and Wales to have a license. Owners in Scotland have been licensed since 2006.
Owners are expected to pay a license fee of around £50 under the guise of weeding out bad owners, although I’m not sure how this will work yet. The Times also reports that the Government will introduce a statutory regulator for rental agents.
You will need to have an annual Landlord Gas Certificate from a “Gas Safe Registered” installer (formerly Corgi Gas Registered) and you will need PAT Certificates for all Portable Appliances plus a 5 year verification of the main electricity on the property.
You will need buildings insurance unless you have an apartment and this insurance is usually part of the annual maintenance fee you are charged. The tenant must obtain contents insurance as part of the tenant’s liability.
All furniture must comply with the Fire Safety Regulations Act 1988 (Amended 1989 and 1993). You must have smoke detectors installed on each floor.
Take care of your Personal Security when Showing the Property
You will need to take prospective tenants to viewings. If you are a single woman, I recommend that you take extra precautions for your personal safety when showing the property, bring someone with you if you can. Keep your visits during the day if possible (although this is not a guarantee). Be sure to let someone know that you are showing the property to a stranger. The Suzy Lamplugh Trust may have more information on personal safety.
The tenant has agreed to rent. What do I do now?
When a tenant agrees to rent to you, you will need a Tenant Screening Checklist and Application Form, Bank Reference Authority Form, Permanent Order Form, Employer Writing Authority Form, and Writing Authority Form. to the previous owner. also ask if they are on the electoral register and check with your town hall. Have your tenant complete this information immediately after agreeing to become your tenant.
You will need to run a credit check on that person and you will need to send letters along with authorization forms to the previous landlord, employer, tenant’s bank, etc. These things will take a couple of weeks to be returned. You will need to complete a Secured Shorthold Lease for 6 months (better than 12 months in the first instance), and these days it is acceptable to serve an Order of Repossession at the beginning of the Lease as long as it is dated at least one day after the date your new tenant’s move-in (this seems to be a common practice now among leasing agents).
You will need to take the deposit and present it in accordance with the Government Directive: http://www.direct.gov.uk/en/TenancyDeposit/index.htm; check their website for more information.
I think I’ve briefly touched on most of the requirements, but make sure you do your own due diligence and become a safe, legal and responsible Owner.