Ever wondered how to be a landlord? Becoming a landlord in Leicester can be a fantastic opportunity; you’ll benefit from the additional income, the long-term security of owning a second property and control over your investment. However, whilst it is true that there is money to be made, it’s not quite as simple as the common misconception that landlords just sit back and watch the money roll in. We’re going to cover everything you need to know about being a landlord in Leicester in this article.
With rent rising across the UK with the East Midlands being one of the best Buy to Let Hotspots in the UK with Leicester being the second fastest rising only being beaten by 0.2% by Nottingham, now is the best time to become a landlord.
Whether you own a second property, have a spare room or are a tenant in a very spacious flat (with the owner’s consent), you could take the first step to being a landlord today!
Before you run off to put a notice in the Leicester Mercury that your house is to let, though, you should understand the pitfalls of renting out your home. These include finding reliable tenants who will pay the rent on time, managing the paperwork, arranging appointments, repairs and maintenance as well as liaising with local authorities, prospective tenants and solicitors or eviction specialists should things not go right the first time. If things don’t go right the first time, or you’ve been bitten in the past by a bad tenant, don’t let this put you off. This article is going to give you the tips you need to make sure you’re in the best position to select a decent tenant. So, what should you do before you become a landlord in Leicester?
Before you do set off on your journey towards becoming a landlord, it is important to talk to your mortgage lender; obtaining consent from the lender is a legal requirement because the lender, who may own the majority of your home, has a vested interest too. Failure to obtain this consent could break the terms of your contract and the lender may request full repayment of the monies owed up front. This could be a tricky arrangement for most individuals and it may result in repossession of the property if you’re unable to cover the repayment. Consent to Let is often referred to as Consent to Lease but they mean exactly the same thing to those looking to become residential landlords.
Don’t go running for the hills just yet, most lenders claim to give consent to nearly everybody who requests it and often, it won’t have a massive impact on the lending agreement already in place.
Once the lender consents, you can then proceed to the next step of becoming a landlord.
Make Sure The Property Is Safe
You’ve probably rolled your eyes at this, especially if you’ve been living in the property for the last twenty years with no problems but landlords have legal obligations they must adhere to. The most important of these obligations regard the safety of the properties they provide to tenants. As a landlord, you’ll be providing a service to your tenants and will be bound by;
- The Consumer Rights Act 2015,
- The Gas Safety (Installation and Use) Regulations 1998,
- Furniture and Furnishings (Fire) (Safety) Regulations 1988,
- The Smoke and Carbon Monoxide Alarm (England) Regulations 2015,
- The Management of Houses in Multiple Occupation (HMO) (England) Regulations 2006,
- You also need to mitigate any risks of Legionella disease and understand the Housing, Health and Safety Rating System (HHSRS).
Most importantly, you must have a smoke alarm on every habitable floor (and bedroom if it’s an HMO). A Carbon Monoxide (CO) alarm in any room which burns solid fuel (though it’s best to have one anyway for good measure, we recommend the ones below:
You’ll find that tenants don’t trust their landlords as much as you’d like given you’re letting them live in your house. However, if we look back through time, some of them have very good reason and have faced serious financial difficulty as a result of rogue landlords not returning tenant’s deposits for unfair, unjustifiable reasons – sometimes, not even giving a reason at all!
As such, the government implemented rules that legally bind landlords to protect their tenant’s deposits via an accredited deposit protection scheme, either through an insurance product or via their custodial service which is usually free (they earn their money through interest gained on balances held).
Failure to comply with any of your legal obligations as a landlord can lead you to be slapped with a Banning Order, you can find out more about these by clicking here.
There are three deposit protection schemes available:
- Deposit Protection Service
- MyDeposits – including deposits that were held by Capita
- Tenancy Deposit Scheme
Deposits must be registered within 30 days of receipt. Failure to do so will result in being unable to evict the tenant using Section 21.
Before a tenant can move into the property, you must provide to them the prescribed information which includes details of the deposit registration scheme their deposit is registered with, a gas safety certificate, an EPC certificate and the Government’s ‘How To Rent’ guide.
If you’d like to find out more about compliance and your legal obligations, click here or visit this link: https://harryalbertgroup.co.uk/how-to-rent
It is important to find the correct insurance but being insured is not a legal requirement, if you’re willing to take the risk that is (we’d advise well against it). You’ll want to have certain insurance products including;
- Buildings insurance (with Contents insurance if you’re opting for short-term lets, serviced accommodation or intending to be a resident landlord).
- Public Liability Insurance.
Well, let’s just say it is. The amount of rent you receive will depend on several factors including;
- Local Market Rents,
- Access to public transport and local amenities,
- Number of bedrooms,
- Use of garden or parking space and more.
The truth is, there’s no one correct way to define the rent for a property. A lot of it will be determined by what the market is willing to pay and whilst we want to maximise yields, we don’t want to have long-term voids. That’s why we would recommend having a letting agent value the property for you.
So, now you’re better informed…
You’re in a fantastic position now to really make an informed decision as to whether being a landlord is right for you. Perhaps you don’t want to be as hands on or have to manage every aspect of your property investment, instead, you’d rather a reputable, independant letting agent take care of it for you? If this is the case, we would happily recommend Harry Albert Lettings & Estates.
Harry Albert Lettings & Estates provide a range of services including;
- Advertise Only;
- Let Only;
- Fully Managed;
- Short-Term Lettings and Serviced Accommodation management; and,
- Property Auction Services.
You can find out more about their services by clicking here or by giving them a call.