How to become a landlord
Being a landlord can give you a good, steady income, but there are various things to consider before you can rent out a property. This article will take a look at some of the key steps to take before you can become a landlord.
If the property you wish to let out is mortgaged, you will need to inform your mortgage lender to gain their permission first. The mortgage for the property will likely need to be a specific buy-to-let mortgage; these generally have a higher interest rate than a standard, owner occupied mortgage due to the higher potential risk involved. It is of utmost importance that you notify the mortgage lender; if you do not, you may be in breach of the specified property usage terms and conditions which can lead to large penalties and even repossession.
Having good landlord’s insurance is vital. A standard residential insurance policy won’t cover the additional risks letting out a property can give rise to. This can apply even if you’re just planning to let out a room in your house, so you should always consult your insurer when letting is involved.
You should look to get an insurance policy which includes: public liability and property owner’s liability cover; alternative accommodation costs; loss of rent cover; lock replacement; contents insurance. The Insurance Store has a wide range of options to cover any landlord’s situation.
When letting a property, make sure you inform HMRC. This is because you will likely have to start paying tax on this extra income. You will also have to keep detailed records of your landlord-related ingoings and outgoings to aid you in filling out tax returns.
Furthermore, it is worth knowing that there are a variety of potential property-related costs you can claim which will reduce the amount of tax you pay. To see a comprehensive list, visit the government’s site on renting out your property.
Before letting a property, you should consider how hands on you intend to be. Being a landlord is essentially a job in itself which can be very time consuming and can require you to be available to tenants 24/7. If you are unable to manage all aspects of the property, hiring a letting agent to do this for you is a good option. Letting agents will take a cut of your income, however, so you should research your options carefully.
Checks and safety
Regardless of whether you deal with the property management yourself or hire an agent, you will still have to have various checks of the property carried out to ensure it’s of a good standard. If you are managing the property yourself, these will have to be organised by you; if a letting agent is managing the property, you will still have to pay for these checks. Examples of these checks/provisions are a gas safety certificate, fire safety compliance, electrical inspections and an energy performance certificate.
After reading this article, you should be in a better position to become a quality landlord who is aware of the job’s requirements. The Insurance Store can help you on your way by providing a wide choice of landlord’s insurance options. Our highly experienced team can help you find the right policy to meet your individual circumstances. Get in contact with The Insurance Store today to get a quote, further information about policies, or even if you just have a general enquiry.