* before investing, prepare a business plan that takes into account the cost of the investment, running costs, cash flow and rent level. Allow at least 7% for voids;
* if necessary obtain permission from mortgage lender and/or freeholder for renting the property;
* consider what part of the private rented sector market the property is designed to serve;
* decide about the kind of tenant to let to, is a tenant needing Housing Allowance an issue, is the property to be let furnished or unfurnished?;
* calculate realistically whether the rental income will cover loan or mortgage payments, repairs and all the other rental costs. If not, budget to set aside money from earnings each month (in the early years) to cover any shortfall;
* decide on the likely market rent;
* decide whether gas, electricity and water charges are included in the rent;
* consider who will manage the property and the cost of this. If using an agent agree costs and levels of service;
* ensure adequate levels of relevant insurance (check the policy is suitable for rented property);
* deal with the tax implications of the revenue stream and inform Revenue and Customs;
* consider joining a Landlord Association and undertaking professional development;
* obtain planning or Building Control approval for major improvement work done to property;
* make sure the property is both safe and healthy for any potential:
• occupiers or visitors, including;
• adequate heating and insulation;
• free from tripping and falling hazards;
• free from significant disrepair and asbestos;
• good lighting and ventilation;
• good security;
• good sanitation, food preparation and is hygienic.
* obtain a tenancy agreement suitable for your letting and avoid unenforceable unfair terms;
* decide on length of letting;
* advertise through the internet, agent, newspaper or other means;
* obtain an Energy Performance Certificate (EPC);
* undertake an annual gas safety check by a Gas Safe registered engineer;
* comply with the electrical & furniture standards;
* ensure the property meets with the relevant fire safety standards with the fitting of alarms and/or smoke/heat detectors and emergency lighting.
* if the property is a House in Multiple Occupation (HMO) ensure any electrical installation is inspected by a qualified person before letting and every 5 years subsequently;
* contact your Local Authority to check whether a licence is needed and if it is apply for a licence and comply with the conditions of the licence and the HMO regulations;
* ensure a fire risk assessment is carried out under the Fire Safety Order;
* ensure that smoking does not take place in public areas under the Smoking and Health Act 2006
Quick links:
Landlord Forms and Books - The NetRent Store
EPCs - The Business Directory
Gas Safety Checks - The Business Directory
Electrical Testing - The Business Directory
Local Authorities - Useful Contact for Landlords
Smoking and the Health Act 2006