Becoming a landlord can put you on a pathway to financial freedom and give you back your time.
But when you start out, there is a huge amount of information and compliance to keep track of.
The best way to stay on top of your obligations is to use a letting agent to manage your property.
In this first-time landlord guide, we’ll run through a comprehensive checklist of some of the things you need to do before renting out your first property and outline how an agent can help…
What do I need to know as a first-time landlord?
When you start your journey as a landlord, you could be forgiven for feeling a little overwhelmed.
There’s a lot to learn and a lot to understand, while making sure your rental property is fully compliant with the latest lettings legislation is key.
Here’s some things you need to know about as a first-time landlord…
1. Consent to let
If you own the property you’re planning to rent out and have a standard residential mortgage, you’ll need your lender’s permission.
In most cases, you’ll need to switch to a buy-to-let mortgage, but obtaining consent to let from your lender can be a good short-term solution if you’re:
- Only planning to rent out your property for a short time
- In the middle of a particular mortgage deal
If the property you’re planning to rent out is a leasehold property, you’ll also need permission from your freeholder to let it, which the building’s managing agent should be able to provide.
As well as your lender’s permission, you should also check whether there are any planning restrictions or if there is local authority licensing scheme in operation.
2. Health, safety, and compliance obligations
Without doubt, lettings compliance is the most complex but important part of being a new landlord.
In fact, there are more than 150 pieces of legislation you’ll have to comply with to legally let your property, including:
When renting out a property, you must have an Electrical Installation Condition Report (EICR) carried out every five years.
This must be carried out by a qualified electrical engineer and a copy of their report passed to all tenants within 28 days of the inspection being carried out.
A gas safety inspection must be carried out at your rental property by a Gas Safe engineer each year and a copy of your gas safety certificate passed to your tenants.
Energy Performance Certificates (EPCs) and Minimum Energy Efficiency Standards (MEES)
To legally rent out your property, you must be able to provide your tenants with a valid Energy Performance Certificate (EPC) with a rating no lower than ‘E’.
Fire safety regulations
If you’re renting out your property furnished, all furnishings must comply with fire safety regulations.
Working smoke detectors must also be installed on each floor of the property, with carbon monoxide alarms placed in any room with a solid fuel burning appliance.
Carbon monoxide detector rules could be set to change in 2022, with gas appliances included in the regulations.
Rental property safety and hazard assessment
Under the Housing Health and Safety Rating System (HHSRH), your local council can assess your rental property’s compliance against 29 different potential hazards.
As a landlord, it’s your responsibility to ensure your property is safe for tenants to live in and that it complies with HHSRH regulations.
Tenancy deposit protection and deposit caps
Tenant deposits must be protected in a government protection scheme within 30 days of receipt of funds, while details of where and in what capacity their money is held, and prescribed information must also be provided to the tenants.
Tenancy deposits and holding deposits are also capped under the Tenant Fees Act 2019 and the maximum deposit you can request is five weeks’ rent (if the annual rent is less than £50,000) or six weeks’ rent (if the annual rent exceeds £50,000).
Holding deposits are capped at no more than one week’s rent.
How a letting agent can help with health, safety, and compliance
By using CJ Hole’s management service, you can be confident that your property will comply with all health and safety regulations.
Your agent will also keep up to date with changes to legislation and take the steps needed to ensure your property is always compliant.
3. Landlord insurance
It’s vital that you protect yourself, your property, and your contents – if included in the rental property – with the right insurance.
Firstly, all landlord insurance should cover third party liability, ensuring any damage caused to the property by the tenants is covered.
But a basic landlord insurance policy may not cover you if your tenants do not pay their rent, so you should consider a rent guarantee cover add-on or a policy that includes it.
4. Preparing your property for tenants
Before potential tenants view the property, make sure that it’s clean and that you have finished any decoration work.
The property should be in a clean and tidy condition, particularly the kitchen, bathroom, carpets, and curtains.
Think about how you would hope to find it if moving in yourself.
A tenant can tell if the property is well cared for and is more likely to look after it during the tenancy if it is clean at the start.
Additionally, properties that look good achieve higher rents and let more quickly.
So, it really is worth taking time to ensure your property is presented to the highest possible standard.
It’s worth thinking about the kind of tenant you want to attract, too, as each type will have different needs.
For example, young professionals tend to want contemporary decoration, while students will require desks and families generally like a kitchen table.
If your property is being let furnished, include everyday items like a vacuum cleaner, ironing board and, if there is a garden, a lawn mower.
If your property is unfurnished, you will still need to supply carpets, curtains, light fittings, and a cooker.
How a letting agent can help with pre-tenancy preparation
CJ Hole agents are experts in their local area and understand of the type of tenants looking for properties like yours.
So, they’re ideally placed to offer great advice on steps you can take to make your property more appealing to the local rental market.
5. Marketing and viewings
Once your property is ready for tenants, it’s a case of finding them.
That means effective marketing and advertising, and ensuring your property gets good exposure to the right people.
How a letting agent can help with marketing your property
We’ve been marketing great properties at CJ Hole for more than 150 years.
Through targeted online marketing, we’re able to find the right tenants for the right properties, including advertising on the main online property portals such as Rightmove and Zoopla
We also use social media effectively to market our landlords’ properties and have a database of potential tenants looking for properties just like yours.
6. Tenant referencing and Right to Rent checks
To protect your own interests, all potential tenants should be vetted and referenced before any tenancy agreement is reached.
Good tenant referencing should include:
- Credit and ID checks
- Employer and previous landlord references
- A financial and affordability assessment
As well as referencing, all tenants must undergo Right to Rent checks, which determine their legal immigration status.
Certain documents are acceptable as proof of a tenant’s right to remain in the UK indefinitely or for a limited time, including:
- A British passport
- A Home Office document confirming the right to indefinite or time-limited stay
- A permanent residence card
- A biometric immigration document confirming right to indefinite or time-limited stay
- A passport confirming right to indefinite or time-limited stay
- A birth certificate issued in the UK, Channel Islands, Isle of Man, or Ireland
How a letting agent can help with tenant referencing and Right to Rent checks
Tenant referencing and Right to Rent checks can be complicated, but both are crucial parts of the pre-tenancy process.
CJ Hole’s landlord services include thorough referencing and Right to Rent checks as standard, meaning complete peace of mind.
7. Conduct a full inventory
A property inventory is one of the most important documents you’ll need as a landlord.
The inventory details the condition of the property at the start of a tenancy, including information on the condition of walls, carpets, fixtures, and fittings.
Your property inventory should include clear photos to support the information given and needs to be signed and dated by you and your tenant.
As well as a thorough inventory, you should also ensure your tenant knows:
- The codes for any alarms and how to switch them off
- How the heating system works
- Where the water stop cock is in case of a leak
- Where the gas and electricity meters are and how to read them
How a letting agent can help with inventories
A comprehensive inventory is included with our CJ Hole full management service and includes a check-out inventory report so you can accurately assess the condition of your property at the end of a tenancy.
8. Tenancy agreements
The tenancy agreement is another hugely important document for both you as a landlord and your tenants.
Tenancy agreements should be properly drafted and legally sound, with all clauses and restrictions related to your property clearly defined alongside all other required information.
The agreement must be signed and dated by tenant and landlord.
How a letting agent can help with tenancy agreements
A fully drafted, bespoke tenancy agreement is included in with all our CJ Hole landlord services, ensuring complete peace of mind that your tenancy is legally sound.
9. Property inspections, maintenance, and repairs
Regular property inspections are key to staying on top of any potential issues at your rental property.
You must give your tenants at least 24 hours’ notice if you wish to inspect your property and should never turn up unannounced.
You’re also obligated under the Landlord & Tenant Act 1985 to ensure your rental property is kept in a good state of repair, including:
- Maintaining and repairing the property’s exterior and structure, including roofs, chimneys, walls, guttering and drainage
- Maintaining and repairing key services, including water, gas, and electric
Your tenant should know who to contact in the event of a maintenance emergency and you are obligated to complete major maintenance or repairs as quickly as possible.
How a letting agent can help with inspections, maintenance, and repairs
By opting for CJ Hole’s fully managed or premium managed service, we’ll take all property inspection, maintenance, and repair organisation off your hands.
We use trusted local trades to complete crucial work and will liaise with your tenants to arrange a suitable time for them to complete work at your property.
We also inspect our landlords’ properties regularly and supply condition reports.
10. Rent collection and dealing with arrears
Collecting rent and dealing with arrears is another major part of being a landlord.
Of course, thorough referencing should mean you never have to face a rent arrears issue with your tenants.
But being able to deal effectively with this issue should it occur is key.
How a letting agent can help with rent collection and arrears
Our premium managed, fully managed and rent collection services all include rent collection and dealing with arrears as standard.
We also use a fully digital system to manage your rent account and finances and can act quickly should your tenants fail to pay their rent on time.