In this article, Landlord & Tenant specialist Olivia Parkinson provides advice for people who are looking to become a landlord.
She goes on to outline the responsibilities of a landlord, the costs involved and the benefits.
How easy is it to become a landlord?
Simply put, it’s not that easy.
There are a lot of responsibilities that come with being a landlord so, if you’re looking to make that step, you need to make sure that you are 100% certain on your decision.
And, of course, you need to be ready to take on those responsibilities.
What responsibilities does a landlord have?
- Having the correct documentation in place, including:
- Energy Performance Certificate
- EICR
- Gas Safety Certificates (require annual renewals)
- Government How To Rent Guide
- Deposit protection Certificate
- Making sure you have a suitable tenancy agreement in place
- Maintenance and management responsibilities
- Dealing with issues (e.g. rent arrears, neighbour disputes etc.) during the tenancy
- Updating tenants of address changes etc.
We outlined the responsibilities of a landlord in further detail in our dedicated article, which can be read here.
How much does it cost to be a landlord UK?
This can vary massively, depending on your situation, the number of properties you own, and the location of the property.
Here’s a list of potential costs as a landlord:
- Cost of buying a property to let (if you don’t already own one), including conveyancing fees
- Letting agent fees
- Monthly mortgage costs (if applicable)
- Maintenance fees
Additional costs include:
- Energy Performance Certificate (EPC) - £65 – renewed every decade
- Gas Safety Certificate - £45 – must be arranged annually
- Electrical Installation Condition Report (EICR) - £199 – once every five years
- Smoke & Carbon Monoxide Alarms – roughly £10 per alarm – replaced as and when
- Insurance cover/premiums
Read about the updates to EPCs in 2023 and 2024 here.
What are the benefits of being a landlord?
Income
The main benefit of becoming a landlord is, of course, monthly income.
Letting property can be very profitable if gone about the right way, and many people become landlords to gain a second stream of income.
Alternatively, depending on your situation, you might use funds from your rental property to pay off your buy-to-let mortgage, your own rent/mortgage, pension or any other outstanding payment.
Other advantages
- Rental property is generally seen as a pretty ‘safe’ investment, as opposed to playing the stock market for example
- Property is a tangible asset, which could be sold at any time if you need the money
- You have a lot of control in terms of management of the property, as opposed to other types of investments where you might have less of a say
What are the requirements of a buy-to-let mortgage?
To be able to get a buy-to-let mortgage, you need a lender to approve your loan.
Landlords should look to meet the below criteria, otherwise getting approved for a loan may be more difficult.
You own the property that you are looking to rent out outright
If your property has a mortgage, check with your lender as to whether you are able to rent it out.
If you own the leasehold of your property, you need to gain permission from your freeholder to let your property. This is known as sub-letting.
You have a good credit record
Lenders will also check that any other loans that you've taken out elsewhere are repayable.
You earn £25,000 or more per year
It will likely be more difficult to get approved if you earn less than this.
You are under a particular age
Most lenders have upper age limits that determine the oldest that you should be when the mortgage ends.
For example, if the lenders age limit is 75 and you are looking to take out a 25-year mortgage, then the oldest age that you’ll be approved at is 50.
Read more about buy-to-let mortgages, and how they work, in our dedicated article here.
Should I speak to a letting agent first?
When you first think about letting out a property, we recommend speaking to a local letting agent and/or management company.
They can give you advice on:
- What you need to do
- All the required steps
- Where to get a suitable tenancy agreement
- And how to manage your property moving forward
A Specialist Landlord & Tenant Solicitor’s advice
Olivia Parkinson, specialist Landlord & Tenant Associate at Frettens, says: “If this is your first venture, we recommend that you instruct a letting agent.
They will be experienced in dealing with such matters and will be able to guide you through the process smoothly.
Later down the line, you will likely need a solicitor to assist you with any transaction (if you are purchasing a buy-to-let property).
At Frettens, our bright team would be happy to assist you with work of this kind.”
Read our comprehensive residential landlord's guide here.
Buy-to-let and landlord advice solicitors
At Frettens, we can help you in purchasing a buy-to-let property, drafting up a tenancy agreement, dealing with disputes or issues with your rental property including eviction proceedings, or just answer any questions that you might have.
Please don’t hesitate to get in touch with our bright team on 01202 499255, or by filling out the form at the top of this page. We offer a free initial chat for all new clients.
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