Are You Thinking Of Purchasing a Buy-To-Let?
Renting a second property out can be a great long-term investment and will provide you with a steady income and an asset which will hopefully lead to a comfortable retirement. Becoming a landlord is not without its risks and pitfalls, there are a number of legal requirements that need to be met so you should never jump in without doing the proper research and getting professional advice.
What are my first steps to becoming a landlord?
The first thing you have to consider is your finances, how much you will need to invest and your current mortgage situation. If you already own the property you will need to consider switching to a buy to let mortgage which is tailored to your situation. You will also need to have the correct certificates, insurance and be registered with HMRC. Regardless of whether you pay PAYE tax in your day job you must return a self assessment form each year to the tax office to declare any income you received from a rental property. If you are buying or own your property on a Leasehold basis then you must check that your lease allows you to let your property and you must notify the freeholder of your intention.
What responsibilities do Landlords have?
As a landlord you have several legal obligations and you must also ensure that you keep the property safe and free from health hazards. Your legal obligations include making sure all gas and electrical equipment is safely installed and inspected by a correctly qualified tradesman, fire regulations are correctly followed which from the 1st October 2015 includes providing a smoke detector on every floor of your property and a carbon monoxide detector in any room where solid fuel is burned. If you provide any soft furnishings e.g. sofas and mattresses then you need to ensure that they comply with the Furniture and Furnishings (Fire) (Safety) Regulations 1988.
In addition, you need to have an Energy Performance Certificate (or at least have it on order) before you can advertise your property and you must provide any prospective tenants with details of the ratings.
How much rent can I charge?
Becoming a landlord and renting out a property is the same as any other business, you have to price it right. You will need to factor in the quality and size of your property, the location, local amenities and how much similar properties are being let for. When working out your budget ensure that you consider mortgage payments, repairs, agents fees and void periods.
I want to become a landlord but I’m not sure what to do
Whether it is a case of not knowing or not having the time, this is where letting agents like City Lettings come in. We find the tenants, collect the rent and we take on the management ensuring the smooth running of your property, so all you have to do is check your bank account each month. Becoming a landlord isn’t as simple as buying another property and advertising it as “to-let”, you need to be aware of government legislation, safety regulations and what to do when there’s a dispute.
Whether you are interested in becoming a landlord or you’ve recently purchased a buy-to-let property, get in touch with one of our local advisers at City Lettings. Our team has over 100 years of combined experience in the industry and are best placed to give you the advice you need to succeed.