Before deciding on becoming a landlord, it is best to learn everything you can about legal aspects of renting out a property. Properties must have smoke alarms and extractor fans fitted. Additionally, gas appliances must be inspected by an engineer registered by CORGI, the national watchdog for gas safety in the United Kingdom. The government guide for landlords has detailed information regarding both the landlords' and tenants' rights. Landlords also will have to create a budget. New landlords often make the mistake of calculating the rent assuming that the property will be rented 12 months of the year. But this may not be the case. Landlords also will have to also take into consideration the costs of bringing the property up to government safety requirements. Additionally, landlords will need to take into account extra costs such as fixing or replacing broken appliances. As a landlord rental income in the U.K. will be taxed and so the landlord will have to declare that income on a self-assessment tax return. By calculating the annual rent and deducting allowable expenses, the landlord will have a taxable income. The self-assessment form must be submitted every year by January 31. The rental income is then added to the landlord's regular income and counts as part of the landlord's overall taxable income.
Finding the Right Rental Property or Preparing a Property You Already Own for Renting
Purchasing a property with the intention of renting it out is very different to purchasing a property to live in. You may not like the property, or feel that it needs redecorating, but as a rental investment property it may not need any work at all. Consider properties close to public transportation, like the Docklands Light Railway, but not so close that traffic or train noises are a problem. If you already own a property and want to rent it out, decide what items you intend to leave for the renter. If you leave upholstered furniture in the rental unit, all furniture must meet fire codes or you could be held responsible. Whether you are buying a new rental property or converting your existing property, contact your mortgage company and let them know you would like a buy-to-let mortgage.
One of the most important tasks a landlord will have to handle is finding a good letting agent. You could always choose not to get a letting agent, but for first-time landlords, letting agents take a great deal of the effort out of renting a property. The letting agent will show the property, interview and run all the background checks on applicants, and handle any problems with the tenants---all for a fee of 5 percen to 15 per cent of the rent. Talk to friends and family who are renters to get recommendations. Interview several letting agents and discuss with them precisely what will and will not be their responsibility. Consider getting a letting agent who is a member of the Association of Residential Letting Agents. The ARLA is a body that is concerned with the self-regulation of letting agents and its members must follow the ARLA's Code of Practice.