New Landlord Advice
1LET’s top tips for becoming a first time landlord!
1) Check out your mortgage!
Unless your mortgage was arranged as a buy to let mortgage, you may not be able to rent it out without your bank’s permission. If you don’t get a written approval from them then they could legitimately begin repossession proceedings when they find out...not pleasant.
2) Register as a Landlord
Ok, so you can become a landlord without registering. Unfortunately in Scotland you’re not legally allowed to advertise your property or do any marketing unless you do. If you’ve got tenants all lined up then you don’t need to worry about this just yet, but for the future it’s definitely a must!
3) Check your insurance
You could invalidate your insurance if you don’t tell your provider that you’re letting your property. But be warned, once you inform them your premiums could go up! If something goes seriously wrong though, you’ll certainly be grateful you paid it.
4) Find a good letting agency
It can be difficult to find an excellent agency who you can trust with your investment, but getting things done professionally can really help. Start by looking at online reviews and see what other landlords are saying about their agents - and make sure you get someone with great local knowledge of your area!
A good lettings agency will make sure that all of your legal and safety compliance is up-to-date, will advertise your property for you, perform credit checks and referencing on prospective tenants and generally help you through every stage. And if you choose this route, you’re done! Once you’ve signed a letting agreement you will officially be a landlord, congratulations.
Unfortunately not everyone can afford to pay a percentage of their rent and don’t have it so easy. If this is you don’t worry! You can still move forward, but be warned doing everything right can easily make being a landlord a full-time job!
5) Do things right!!
If you aren’t going to use a lettings agency to manage your property for you then make sure you don’t cut any corners.
Avoid the free tenancy agreements online - they’re often out of date and so not legally binding. You should get one drawn up by your solicitors or purchase one from a reputable source so that you know you’re covered.
Research what safety features and general compliance you will need to have done (fire alarms, an energy performance certificate, HMO licence, gas safety certificate etc). Then get it done! And make sure to choose well known contractors with good reviews, never skimp on safety!
And lastly: you have to put the tenants deposit in a government-approved tenancy deposit scheme. If you don’t, you could get fined up to three times the original deposit amount plus the deposit itself and that kind of set-back can ruin anyone’s week.
In the current market becoming a landlord looks to be a very sound investment, but remember it can be a lot of work too! Do things right and you should have an excellent second source of income.