So, you’ve acquired property for one reason or another, it can’t be sold quickly and you are a little stuck. Welcome to the world of the ‘Accidental Landlord’.
How do you become an Accidental Landlord?
Research suggests that up to 1 in 5 landlords have never had any desire to become a landlord at all, they may have been left a property in a will, have moved to a new home but can’t sell because of a dip in local house prices or you may have some completely unique reason for retaining ownership of your home whilst not living there.
Obviously, when a house is empty it is a significant cost. So getting a rental income is always the sensible option, even if it was never the plan.
What do you do if you end up in this situation?
The first step is always contacting your mortgage company. Any rental must be approved by your mortgage provider even if you aren’t looking to move to a buy to let specific mortgage. What you need to organise is a ‘consent to let’.
However, consent to let is often a time-limited agreement so you will also need to check how long it lasts. If you plan on renting for longer than the consent to let period then you may need to arrange a buy to let specific mortgage.
The legal Bit
Landlords now have significantly more responsibility than they used to have, although many good landlords have always gone above and beyond for good tenants. However, you must make sure you are up to date on all current legislation, so you don’t leave yourself open to legal action by the tenant or for extra costs associated with repairing a property which has been deemed substandard.
Firstly, you need specific landlords’ insurance, this is a must and covers you for a number of problems which may be expensive. You will also have to pay tax on your rental income.
Other things to consider:
- You will have the responsibility to ensure that anyone you choose to occupy your property has the right to rent under the Immigration Act 2014.
- You will need to put any deposit you take into a government-sanctioned tenancy deposit scheme.
- You must ensure that your property is safe, has the appropriate energy efficiency (E or above). Safety includes carrying out gas and fire checks.
- You may have to purchase a license from the local council, depending on where your property is located, if you want to act as a landlord.
You will also need to get the property ready for letting which might mean replacing things like carpets, finding furnishings and undertaking repairs.
Using a Professional Lettings Agency
For many people complying with all the relevant legislation as well as dealing with obtaining a tenant and keeping them happy, and making sure you are paid on time every month can be a chore which you don’t have the time for and also have a deficit of knowledge about the processes involved.
Also, if the property is not local to where you live then gaining regular access could be very difficult on top of managing the rest of the process.
One option which could save you both time and money, in the long run, is getting a local letting agent to manage the property and the process for you. This can make the venture much more profitable and protect you if the plan is to sell sometime in the near future.
They will manage all the details for you including finding suitable tenants, vetting them, carrying out maintenance on the property, collecting rents and dealing with any potential problems that may arise during the tenancy.
Bricks & Mortar a Modern Hybrid Agency
At Bricks & Mortar we have a wealth of experience in dealing with property portfolios of all sizes and intimately understand the local rental market in Tyne & Wear. So if you need some advice or are feeling like the process is too much, why not get in touch with us and discuss your options?