The 4 Key Steps to Becoming a Landlord
Have you been considering becoming a landlord? Perhaps you’ve never rented out a property before but have often found the idea of the additional income stream particularly appealing. Or maybe you have money to invest, or you’ve inherited a property and are considering whether to lease it out or sell it.
If you’ve been considering renting out a property, we understand your concerns about whether now is the right time or not to take the plunge. Especially as the housing market across the UK continues to feel the effects of the COVID-19 pandemic.
However, after a tumultuous year in the property market, a recent Savills UK study has provided welcome news that although the rental market is anticipated to remain price-sensitive for a period of time, it’s expected that this will be followed by a stronger rental growth as we head into 2022.
What’s more, due to the fact that house prices have risen to a staggering 13% higher than they were pre-pandemic, The Times has recorded that it’s now the first time since December 2014 that renting works out cheaper than a mortgage.
Combined with the security that ZFA Group can offer you with our guaranteed rent scheme which provides guaranteed rent with no void periods, free maintenance and 0% commission, what are you waiting for? Based on our experience of helping first-time landlords, we’ve pulled together this guide to becoming a landlord and the key things you need to understand first.
First and foremost, you need to make sure that you’re legally entitled to rent out your property. If you’re renting a property that you currently live in or have lived in, it’s likely your mortgage will be a residential one. Contact your lender to discuss switching to a mortgage policy that covers buy-to-let. This can also apply to your home insurance so make sure this is compatible to housing tenants. Be aware that there can be hefty costs associated but it’s worth it to protect your investment and ensure you’re following the law.
It’s important that you understand the impact that becoming a landlord will have on both your finances and your lifestyle. Make sure that you do your research and bring yourself up to speed on everything from government-backed safety deposit schemes, both your rights as a landlord and the tenants’ rights and all of the ever-changing regulations for maintenance and property standards.
As a new landlord there are a few questions you might want to ask yourself before you get started; will you rent out your property furnished or unfurnished? Will you allow pets? Will you allow tenants to smoke in the property? All of this will need to be stipulated in the tenancy agreement ahead of time so it’s worth considering what will benefit you the greatest in the long run.
From tenancy agreements and deposits to gas safety and insurance, a landlord’s responsibilities stretch further than much first think. Check out this government guide on landlord responsibilities for more detail. It’s important you stay up to date with all the latest legislation changes, to ensure you’re adhering to the current rules. It’s important also that you declare your new income from being a landlord, on an end-of-year tax return. You will pay tax on the profit you make after allowable expenses have been deducted, which can include anything from buildings and contents insurance, repairs and maintenance, as well as interest on property loans and utility bills.
In a competitive rental market, it’s imperative to know who you can rely on to maximise your return on property rental. If you choose ZFA Group, we will handle the management of your property with expertise and experience to offer you the highest quality service.
If you’re interested in becoming a landlord, chat to one of our friendly knowledgeable employees – we can help you with a range of services, from rent guarantee and property management, estate agency and property investment, and commercial letting.
Contact us today if you have any questions and we’ll take care of the rest.