7 Steps To Becoming A Residential Landlord

Published: 11/04/2024

There are a number of reasons people consider becoming a residential landlord.

Often, it's because someone wants to do more with their savings and sees property as a sound investment with a regular income. It might also be that a person becomes an accidental landlord after inheriting a property or moving into a house with a partner.

However, while the allure of consistent rental income is certainly appealing, there are several things you need to consider before you begin your property portfolio.

Ellisons property managers have over 30 years of experience in the local property market and are all ARLA (The Association of Residential Letting Agents) trained and qualified. We currently manage hundreds of properties on behalf of landlords throughout the Wimbledon, Raynes Park, Morden, Colliers Wood, Merton Park, Motspur Park, West Wimbledon and Tooting areas which makes us perfectly placed to advise you of seven important things to consider when becoming a landlord.

How to Become a Landlord of a Rental Property

1. Consider set-up costs

Finances matter and the numbers have to stack up! If you're going to obtain a buy-to-let mortgage, the mortgage lender needs to know about your income and what rent you hope to achieve because they have to ensure that you can cover the costs. You'll probably have to pay for surveys, too, so they can be sure the house is worth what you think it is. Then there are the legal fees and the search costs. Our conveyancing team, which comprises experienced property professionals and solicitors, can advise you efficiently with the legal and administrative side of things. We are often asked "Do I need a licence to become a landlord in the UK?" Well, in England, landlords may need to obtain a license only for certain types of properties, such as houses in multiple occupation (HMOs), so it's crucial to check local regulations.

2. DIY or use a letting agent?

Do you want to use a letting agency to find you a tenant and arrange the initial agreements? You can then keep on top of things yourself.
Or would you rather hand over all the management to an agency?
If you are considering managing the property yourself, it's crucial you make sure you have the time and commitment to dedicate to it.

Our team are ARLA trained and qualified, meaning that no chances are taken when looking after your rental property. We are here for your benefit and we always act responsibly, working in your best interests, so that you can get on with things that really matter to you while we deal with setting a fair rental price for your property.
We will research the local rental market, consider property features and amenities and evaluate comparable rentals to determine a competitive and fair rental price for your specific location and property type.

The management fee you pay us covers all this, plus inspections and the handling of our support staff. We are conscientious about who we appoint to carry out any required work. That’s why we will always request alternative quotes when dealing with any maintenance that’s required.

Using a property management company can save you time and headaches later on!

3. Purchase landlord insurance

When you are renting out a property, you must obtain landlord insurance. This is because a standard home insurance policy will not cover you for what you need, and also because the right insurance will protect you, your property and your tenant.

If you're taking out a mortgage to buy the property, your lender will insist that you have insurance. The cost of insurance will vary depending on the level of cover, such as personal liability, contents cover and buildings cover, and loss of rent cover, in the unfortunate event of unpaid rent.

It's best to speak with our property management team, or an insurer or broker to be absolutely clear about what you need.

4. Furnished or unfurnished?

Whether you rent out a fully furnished property or one that is unfurnished, it is a decision you need to make early on.

If you've inherited a furnished property, then it might well be an easy decision. If this is the case, you may be able to charge a higher monthly rent. You should be aware that if you do rent a property out as 'furnished' you will be responsible for all furnishings and they must meet legal fire safety standards. You also must repair or replace the items if they break during the tenancy, unless the damage is due to neglect or misuse, in which case the tenant will have to pay to fix or replace the item.

Obviously, if you rent out an unfurnished property, it means you don't need to worry about this. Many tenants prefer an unfurnished property as they can use their own furniture and make it their home. Don't forget; whether furnished or unfurnished, it's always best practice to get an inventory carried out as this will minimise potential disputes at the end of a tenancy.

5. Keep on top of paperwork

One of our top tips for landlords is to be well organised and up to date with your paperwork right from the start. It may seem daunting having to deal with a lot of documents, but organisation is key. Not only will this ensure you don't fall foul of any legal responsibilities, but it should also mean that if any disputes do arise, you know immediately where important paperwork is and can refer to it easily. (It's also particularly useful when you're doing your accounts or checking information). Plus, there won't be any nasty surprises when you suddenly realise you need to pay income tax!

6. Legals and responsibilities

What responsibilities do landlords have regarding tenant safety? Landlords are legally obligated to ensure the safety of their tenants by conducting regular gas safety checks, providing smoke and carbon monoxide alarms, and adhering to electrical safety standards. These are in addition to the tenancy agreement that you and your tenant will sign. For example, before a property is let, you'll need an up-to-date Energy Performance Certificate (EPC), a gas safety certificate is required for each gas appliance in the property, each home has to have smoke alarms and a carbon monoxide detector, and any electrical appliances and furniture must meet the required safety standards. There are also rules about a tenant's deposit and how it is kept in a Government-approved scheme. If you need help with any of these things, we can advise you.
Simply call us on 020 8545 2185 .

It’s rare, but sometimes landlords do experience problems with tenants. Perhaps it’s not paying the rent, acting irresponsibly or creating problems for other tenants. Without the right experience and knowing the correct procedures it can become challenging to deal with. At Ellisons, it’s all in a day’s work for us! Our team are diplomatic and will always carefully weigh up the best way of dealing with any scenario. In the event a legal approach is required, we’ve got that covered too.

7. Carry out 'right to rent' checks

A relatively new aspect of renting out a property is the requirement to carry out a Right to Rent check. A landlord must, by law, check whether a potential tenant has the legal right to rent a property in the UK. Failure to carry out the required checks could result in hefty fines so if you need advice on this, please contact us and we will be delighted to advise you.

What Next?

For expert property advice and information about becoming a landlord in Wimbledon, Raynes Park, Morden, Colliers Wood, Merton Park, Motspur Park, West Wimbledon or Tooting, contact our team of property management professionals at Ellisons on 020 8545 2185 or email us at propmanagement@ellisonsuk.com.

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