Whether you’re a well-seasoned landlord or you’re venturing into property investment for the first time, ensuring that you’ve thought about all the requirements before a tenancy begins can be enough to give you a headache! We have put together this checklist to help simplify the process for you.
Landlord Checklist
What you should know
Choose the right agency
Just as with anything else in life, there is no ‘one size fits all’, so shop around. Your choice of agent will be dependent in part on which aspect of the lettings process you need help with (usually the marketing to start with, but perhaps also the paperwork and the day-to-day management of the property). Another part of it, though, will be based on a hunch about what’s right for you. Do you feel confident in the agency’s expertise? Do you the staff listen to your point of view and make recommendations that seem sensible to you? Reviews – whether online or via personal recommendations – are always a good place to start, as a great reputation is not easy to gain! Having this confidence in your agency is essential, given that the staff will be helping you to make big decisions about your investment and the way that it’s handled. Why not try to mystery shop them yourself?
Select the correct agency package for you
Most lettings companies offer a fully managed service, where they deal with everything from tenant queries to property inspections, maintenance jobs, chase any rent that may be late and keep an eye on your property which many landlords feel uncomfortable doing. They may also offer a basic marketing package (often termed ‘finder’s fee’) or a ‘let only’ service, where they handle all the tenancy paperwork, but not the day-to-day running of the property. This decision will be down to your location and availability: if you live around the corner from your investment property, you’re much more likely to be able to manage the tenancy yourself than if you live abroad. But it’s also important to suss out what each agency offers within each of their packages, as this could be wildly different.
Try not to be led solely by price – good value means a high-quality product, rather than a cheap one
Put safety at the top of your priority list
Part of ensuring that you have picked the right agency and package also concerns the level of control you want to have over your property. All agencies must follow regulations on areas like property safety, and should (at the very least) recommend to landlords that certain procedures are followed.
With a good property management package, your agent will take care of safety issues for you, checking the fire alarms, for example, ensuring that gas safety checks are up to date. A landlord should also be aware of other issues, though, like supplying furnishings that comply with Health and Safety regulations and checking for electrical hazards, legionella, and the general safety at the property.
Another aspect of safety is protecting your tenant’s deposit, which involves holding the money under a regulated tenancy deposit scheme. This is a legal requirement designed to protect the tenant’s money, and must be carried out either by the landlord or the lettings agent representing them.
Know about references and ‘Right to Rent’
All potential tenants should undergo reference checks to ensure that they are trustworthy and can afford to rent the property in question. Usually, these sorts of references are carried out by specialist companies with the knowhow and technology to carry out hundreds of these checks per day.
Lettings agencies will normally arrange this for you as part of the process of finding a suitable tenant, but private landlords who find and manage their tenancies completely alone need to remember to take up tenant references to protect themselves. Also, since February 2016, it has been a requirement for landlords to check whether new tenants have the legal ‘Right to Rent’ in this country by asking them for paperwork proving their nationality and immigration status.
As this is the law, landlords can be fined up to £3000 for non-compliance. Thankfully, again, lettings agents often manage this on landlords’ behalf, but landlords need to know that this is a relatively new – and compulsory – element of residential property let.
Ensure you have an Energy Performance Certificate (EPC)
A slightly more longstanding piece of tenancy legislation is the requirement for rental properties to have an EPC. Since 2008, it has been the law for all properties being marketed for rent to have an EPC certificate, stating the property’s energy efficiency rating and indicating how it could be improved in the future.
Since April 2018 rental properties must have an energy rating of E or above before a new/old tenancy can be granted. Again, many agencies will arrange this for you (at an additional cost). Properties need to have an EPC in place before they can be placed on the rentals market.
Take out appropriate landlord property insurance
When undertaking a large investment in something like a property, it makes sense to protect yourself against unforeseen problems.
What if there was a fire or flood, or your property needed some other costly repair that you just didn’t have the ready cash to fix? Remember, insurance can be used to cover things like thefts from properties but can also protect you if your property was destroyed altogether.
You might even consider Rent Guarantee insurance to ensure that you don’t lose out on money if your tenant suddenly stops paying rent for some reason (unfortunately, it can happen). Some lettings agents can even give you quotes on insurance, meaning that this is one less hassle for you!
Work on the paperwork
There’s no doubt about it: property investment comes with a whole stack of paper that needs to be signed and kept safe to comply with tenancy law. Most residential tenancies are Assured Shorthold Tenancies (ASTs), which last 6–12 months (and are often renewed thereafter). Apart from the tenancy agreement itself, there are also many other bits and pieces of documentation that should be held on file, like tenants’ ID, tenancy deposit scheme certificates, gas safety certificates…the list goes on.
Once more, many lettings agencies will deal with all of these aspects for you (although do check the details of the property packages that they offer) – but landlords need to know what they should expect to receive, and should be sure to keep copies of all tenancy documentation in a safe and accessible place.
Make sure your property is ready to go!
Before a tenant can move into a property, there are some must-haves, like ensuring all the appliances work, checking that the property is clean, and putting together an inventory of all the items in the property.
The inventory is particularly important, as it should note down the condition of all of the fixtures and fittings at the property and can be used to help settle deposit disputes at the end of a tenancy if things are missing or broken. Nowadays, it’s common for inventories to include photos or even videos as proof of the existence and condition of items left inside rental property.
Tenants are then normally given a window of opportunity to record and report back on any errors in the inventory right at the beginning of the tenancy, helping to protect both landlord and tenant from problems or arguments further down the line.
Inventories are often put together by lettings agencies but can also be supplied by a landlord – again, it’s all down to how hands-on you want to be! One thing is for sure: if you make the time and effort to make the property presentable, your tenants will appreciate it and are all-the-more likely to renew their tenancy and treat the property with respect.