At a time where traditional investments and future financial planning remain uncertain, people are increasingly turning to the residential property market in order to secure their financial future. It is becoming more common for people to purchase second homes and let them to tenants in order to leave (hopefully!) a mortgage-free property which can then be used to the benefit of the owner in their later life.
While many doing this do not own a large number of properties, the obligations on single-property landlords are no less stringent than those who let hundreds of properties through letting agents. This can be a minefield. Ensuring that you have everything arranged prior to the tenancy can cut the risk of later issues. Here are our top 10 tips for residential landlords:
1. Know your tenant
Ask your proposed tenants to fill out a detailed application form prior to agreeing a tenancy. It is important that you know as much as you can about your tenants before signing them up.
2. Background checks
Carry out checks against your tenant. You can carry out credit checks which can highlight any previous County Court Judgments against your tenants which, for obvious reasons, might put you off letting the property to them. Similarly, you can ask for references from former landlords to make sure their history as a tenant is blemish-free.
In some cases it might be appropriate to ask the tenant to provide a guarantor. A guarantor will, in the event that the tenant breaches the tenancy agreement, be liable in their place to make good the tenant’s defaults.
Take a deposit and ensure you protect it in a deposit protection scheme. The more deposit you are able to take, the more of a buffer you will have if the tenant breaches the tenancy agreement. There are strict rules and time limits about protecting rent deposits, and you must make sure you comply with all of these.
5. Tenancy Agreement
Ensure that you have a properly-drafted tenancy agreement (our property solicitors can help you with this). Further, do not hand over the keys to the property until the tenancy agreement (and if appropriate, the guarantee) is signed by your tenant.
If you let out your property, it is advisable to take out specialist landlord insurance. As well as the usual buildings insurance terms, this may also include: public liability insurance; loss of rent cover and contents insurance (if your property is furnished).
Complete an inventory of the items at the property and take photographs showing the physical state of the property before the tenant moves in. Asking the tenant to sign to confirm he agrees to this being correct can save disputes down the line.
You will need to provide the tenant with a copy of the Energy Performance Certificate and Gas Safety Certificate. If you haven’t provided these documents to the tenant you may struggle to remove him at the end of the tenancy.
9. Safety first
Make sure that you have the appropriate smoke alarms in the property as well as other fire safety equipment. It is also advisable to ensure that these are tested on a regular basis.
10. And finally…
The majority of tenancies work smoothly, with landlord and tenant happy. Should something go wrong, however, we would suggest that you seek advice from a solicitor.
Our property disputes solicitors are experienced in all types of landlord and tenant issues. Contact us today on 0800 988 7756 to arrange a free consultation.