Landlords insurance information
How to Begin Letting Your Property
Being a Resident Landlord
Being a Non Resident landlord
Tenancy Agreements
Other Factors to consider
Finding a Tenant
Financial Issues
Further Advice
Grounds for Ending a Tenancy
Main Duties as a Landlord
Other Factors to Consider
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Mortgage
If the property is subject to a mortgage you must inform the lender of your intention to let the property to tenants, otherwise the terms of your mortgage may be breached. Most lenders will give their permission for the property to be let.
Insurance
You will need building and/or household contents insurance if the property is furnished. Tenants should normally have their own contents insurance to cover their personal belongings. Sometimes it is difficult to insure properties when they are let on a short term, multi-tenanted basis (e.g. bedsits) so you may wish to consider creating longer term tenancies. The Association of British Insurers has produced guidelines for owners who want to rent our their property. These explain how insurers assess the risks involved and the steps which can be taken to secure cover. (Please see leaflet in pack).
Taxation
You should discuss this with your tax office and/or an accountant. You may be able to offset mortgage interest, maintenance costs and building insurance premiums against the rent for tax purposes.
Council Tax
The Council Tax is based on the value of your property. One bill goes to each property. If you do not live at the property and have let it to one household then generally that tenant will be responsible for the bill. Make sure this is clear in the agreement. lf there is more than one tenant you may be responsible for the Council Tax.
Property standards
If you are considering letting the property to more than one household (e.g. using bedsits or dividing a property into flats), the property becomes a ‘House in Multiple Occupation’. There are special laws and standards (e.g. fire regulations) for these properties and it is important to know and understand these
For advice on these standards and on the general standards required for letting any property contact Environmental Health.
Grants
If work is required at the property to make it suitable for letting you may be entitled to a grant.
Finding a Tenant
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There are various methods for finding tenants:
- You can advertise in the local press or local shop windows.
- You can appoint a managing agent to find a tenant and manage the tenancy for you.
- You can register with local accommodation agencies. However such agencies often levy a charge for finding you a suitable client.
- You can contact an agency like the Housing Advice Service who can add you name to their lists and send prospective tenants to you. These agencies help people to look for accommodation. The Housing Advice Service can give you their telephone numbers if required.
Accommodation Agencies
Accommodation agencies can let your property for you. There are several agencies in Reading who have experience in advising on market rents, finding tenants, drawing up agreements and managing properties. The Housing Advice Service has a list of agencies you can contact if you wish someone else to let the property for you. (N.B. an agency’s inclusion on this list is not necessarily a recommendation). Usually the agency will charge you an initial fee for letting and/or managing the property and will then take a percentage of the rental income.
Unfortunately as well as there being good agencies in Reading there have also been some agencies who have not acted lawfully or who have had bad letting practices. An agency is acting on your behalf so if they do act unlawfully you may also be held responsible. Sometimes these agencies appear to be offering a cheaper deal for the landlord but usually this is not so and landlords can find themselves with no income from the property or with management problems that’ can take a long time to remedy. (e.g. agencies ‘going bust’ and disappearing with both the rental income and the tenant’s deposit).
It is therefore important to contact several agencies to discuss their letting practices. If you come across something that you are not sure about contact the Housing Advice Service or your solicitor.
The Housing Advice Service
The Housing Advice Service sees many people who are looking for accommodation ranging from a room, to a self-contained flat or house. As long as your property is of a reasonable standard the Housing Advice Service will be happy to both advertise your vacancy on their notice board and to send along their tenant customers who are looking for better or more suitable accommodation.
The Housing Advice Service can also provide free advice on rent levels and setting up your tenancy agreement.
Checking a tenant’s credentials
Before you accept a tenant you may wish to ask for references from the tenant’s bank, employer or perhaps a previous landlord. This is not necessary but it does give you a better idea of the tenant and you should always ask yourself, "Is this person going to be able to pay the rent?" But remember that if an individual is unemployed or on a low income he or she will probably be entitled to Housing Benefit from the council.
Financial Issues
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Do you want to charge a deposit or rent in advance?
Before you let a property you can ask for rent in advance and/or a deposit. The rent in advance is simply paying the rent for a period in advance. If you want your tenant to pay weekly you can only charge one week in advance; if they are to pay monthly then you can ask them for the month’s rent in advance etc. At the end of the week/month etc. the tenant pays the next week/month’s rent.
The deposit is to cover any damage caused by the occupier (but not normal wear and tear) and as such is kept until the end of the tenancy. You may never charge more than two months deposit but you can charge less. If you are renting to someone on a low income or who is receiving benefits you will need to be aware that there are no state benefits available to cover a deposit so these people will seldom be able to afford large deposits.
When someone pays a deposit you should give them a receipt that clearly shows the sum paid as a deposit and that it is returnable if no damages occur. It may be difficult to prove that the damage is attributable to the tenant unless an inventory was completed at the start of the tenancy. At the end of the tenancy you should return the deposit promptly, less any amount to cover damage, if any.
Reading Borough Council run a deposit guarantee scheme for people on low incomes or benefits. If people qualify we will guarantee their deposit for a period of time
Do you want to charge a deposit or rent in advance?
Before you let a property you can ask for rent in advance and/or a deposit. The rent in advance is simply paying the rent for a period in advance. If you want your tenant to pay weekly you can only charge one week in advance; if they are to pay monthly then you can ask them for the month’s rent in advance etc. At the end of the week/month etc. the tenant pays the next week/month’s rent.
The deposit is to cover any damage caused by the occupier (but not normal wear and tear) and as such is kept until the end of the tenancy. You may never charge more than two months deposit but you can charge less. If you are renting to someone on a low income or who is receiving benefits you will need to be aware that there are no state benefits available to cover a deposit so these people will seldom be able to afford large deposits.
When someone pays a deposit you should give them a receipt that clearly shows the sum paid as a deposit and that it is returnable if no damages occur. It may be difficult to prove that the damage is attributable to the tenant unless an inventory was completed at the start of the tenancy. At the end of the tenancy you should return the deposit promptly, less any amount to cover damage, if any.
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