1. Research is key
Before entering the buy to let market, it is important to understand the legal requirements and obligations for doing so. Failure to comply with legislation can result in hefty fines and even imprisonment, if not adhered.
Being a Landlord, or more specifically a good Landlord, involves so much more than charging rent, in return for room shelter. There is no shortage of hints and tips about how to get started. The internet is awash top ten buy to let tips, covering things like how to choose the right location, different mortgage options and the like.
What the majority do not discuss, are the legal requirements associated with buying to let and more importantly once you have entered the market, how to be a good Landlord. When you begin to research what this really entails, it’s easy to see why.
2. Limiting liability
Aside from doing the maths and finding a reliable letting agent, you trust to take good care of your investment, Landlords’ have a responsibility to:
- Carry out annual gas safety checks
- Ensure that electrical safety checks are completed prior to tenancy
- Obtain an up to date energy efficiency certificate
- Register with a tenancy deposit scheme
- Obtain comprehensive insurance cover
- Comply with fire safety regulations relating to furniture and soft furnishings
- Review tenant references
- Issue tenants with a comprehensive and fair tenancy agreement
- Obtain relevant licences and relevant accreditation depending on circumstances
- Maintain the property to an appropriate living standard in accordance with the law
You will also need to learn about rent recovery and how to evict undesirable tenants should the need arise.
If you are becoming a Landlord for the first time, it can be difficult to know where to start. In truth the reality is, your best bet is to obtain professional advice to gain a real understanding on the do’s and don’ts and more importantly to gain insight into key legislation.
Once you have gotten to grips with the legal aspects of becoming a buy to let landlord, take time to think about how you will go about establishing a good relationship with tenants.
- Maintaining your property to a good, if not high standard is essential.
- Responding to repair requests in a timely manner will not only keep tenants satisfied, but also help protect your investment.
- Ensure all safety checks are undertaken annually.
- Obtain professional advice to gain an understanding of the type of tenancy agreement you will need, and in drafting tenancy agreements that are both fair to tenants, whilst protecting your own interests. Get registered with a government backed Landlord deposit scheme.
- Keep abreast of relevant legislation and acquire professional and legal advice as well as any accreditation deemed relevant to your circumstances.
4. Finances – charges and tax
You will need to cover the cost of buying your property, which can include Stamp Duty Land Tax and solicitors fees. The cost of maintaining your rental property, a sales or a letting agency will also charge a fee, it is best to get an agent and compare fees.
There are different rules when it comes to Stamp Duty Land Tax depending on region. You will usually have to pay tax on income earned from renting and you will pay Capital Gains Tax when you sell the property.
5. When in doubt, get help
The British Landlords Association offer the following services for UK Landlords:
- Landlord accreditation
- Members help
- Library – featuring key legislation
- Landlord case law
- Regulatory guidance
- An online forum
The National Landlords Association offer:
- Training courses
- Documents and guides
- Services and suppliers for Landlords
The Residential Landlords Association offer:
- Telephone Advice
- Over 130 documents and templates
- An online forum.
If you are looking to become a buy to let Landlord, Newable Finance can offer help to find a suitable mortgage lender. View our Buy to Let mortgages today.