Lettings for beginners: tips for letting your property
If you’re a first time landlord it’s hard to know what to expect when letting your property. Learning about the process can help you to get a more rounded picture of what’s involved. To help, we’ve listed some key things that we think new landlords should think about before they let their property.
Understand the costs
Letting your property should be seen as an investment. And in order to get the most out of an investment it requires just that – investment! This means you should expect some initial costs to prepare your property for the market. Such costs can include; any safety compliance work needed to ensure the property meets all legal requirements, furnishings if you decide to offer a furnished flat and advertising the property.
Know what’s involved
Renting your property can be tricky. But knowing what’s involved makes it a lot easier – whether you decide to manage it yourself or use a letting agent.
In the first instance you’ll want to know how much rent your property is likely to achieve. Most often you can contact a local letting agent and ask them to carry out a rental valuation on your property.
When you have your target rent and you’re happy with the valuation you’ll need to make sure any safety compliance work is carried out and you obtain any certificates that are required - for example EICR, PAT, Gas Safety and EPC. Again you can do this yourself or ask your local agent about the services they offer with regards to managing this process.
All landlords, by law, are required to register with the government. This can be done by visiting the landlord registration Scotland website.
Then you’ll need to market the property – taking good quality photographs is a must and attracts more enquiries! There are a number of different portals you can use to advertise. If you choose an agent to market your property it’s a good idea to choose one that offers the most exposure - through a number of portals such as Zoopla, Citylets and s1 Homes.
The next step involves viewings, tenant applications and tenant selection. When the right tenant(s) have been chosen, it’s time to organise the lease, inventory, rent and deposit.
A lease, also known as a Tenancy Agreement, should be signed by all tenants and the landlord prior to moving in. This will represent a legal contract and state all the conditions of the tenancy. In Scotland, the vast majority of residential tenancies are short assured tenancies.
An inventory is a best practice requirement – this records the condition and contents of the property when the tenants move in so that any problems with the condition or contents of the property when the tenants move out can be easily identified and fairly dealt with.
Rent & Deposit
It is a legal requirement for landlords to submit tenancy deposits into a Tenancy Deposit Scheme so that any disputes can be solved fairly at the end of a tenancy. You should have your tenants set up a standing order so that you receive the rent on time and in full.
Landlord and tenant responsibilities should also be clear: for example tenants should know that they are responsible for council tax costs and television, cable, satellite and internet supplies and minor jobs such as changing smoke alarm batteries etc. Whereas landlords should know that any need for repairs where the need is not attributable to negligence of the tenant(s) or any person residing with the tenant(s) (or any guest of his/hers) is most likely the responsibility of the landlord.
Make the right decision: Is a lettings agency the best option for you?
For some landlords the easiest thing to do is manage the property themselves. They may approach an agent just to use their marketing services – for example advertising the property. This suits landlords who live locally to the rental property and have the time to manage any problems that may arise. For other landlords it’s much more convenient to instruct an agent to manage the property – for example if you do not live locally to the property, don’t have the expertise and legal knowledge you think is needed to manage the property – or you just simply don’t have the time.
Have realistic expectations
Whether you are a new, first time landlord or a landlord with 20 years of experience – there is always the possibility of things happening when renting your property that are outwith the control of the person managing the property – whether that be the landlord or the letting agent. For example, tenants can lose their jobs meaning the rent can no longer be paid, boilers can break down incurring repair and maintenance costs, the washing machine might break meaning you as the landlord have the responsibility of buying a replacement. Preparing for the unexpected means you’ll be able to deal with situations such as these. Keeping some money aside for unexpected costs will make things like this a little easier to deal with.