So, you’ve decided to take the plunge and have a go at the rental market. While some may think it’s the case of just thinking about it and accepting money from someone in exchange for space, it’s a little bit more complex than that.
It’s worth noting that there are a few types of tenancies, but we’ll focus on AST (Assured Shorthold Tenancy) for this post.
Before you let out your property
From reference checks to inventories, tenants used to be charged for these standard checks. However, in July (for England, September for Wales), some of these fees were ruled illegal and can no longer be charged to the tenant.
If you are using an agent, ensure they aren’t going to charge any fees that are not permitted under the Tenant Fees Act 2019 before agreeing to use their services.
Tools such as Reoli can help minimise costs here. For example, tenants can log in and submit their own updates, which you can approve in a few clicks. Whereas an agent may charge you (the landlord) for such changes.
Licensing and Houses of Multiple Occupancy (HMO)
Some local authorities require you to hold a licence with them before you’re able to let out the property. These often vary between each local authority, but you also have licenses such as Rent Smart Wales which covers the whole of Wales.
If your property will be let out to 3 or more unrelated people with shared facilities (e.g. bathroom and kitchen), then it’s likely to be classed as a house of multiple occupancy (HMO). HMOs are also subject to licencing with the local authority as part of the HMO Management Regulations.
It’s important to make sure you have the right licenses in place, otherwise, you could have some unexpected fines heading your way.
Redress Scheme membership
Since 2014 all property managers must be a member of a government approved redress scheme. This applies to both England and Wales.
This was done to offer both landlords and tenants a way to complain to an independent, expert body.
Details of your registered scheme should be shown at your premises (such as your office) and also on your website. Reoli can automatically show these details to your tenant for you.
Accreditation Schemes
There are a number of accreditation schemes that provide various benefits. For example, the National Landlord Association can provide you with an expert telephone advice line, free tax investigation insurance, regional meetings and more.
There may also be schemes set up within your local area. Your local authority should be able to advise on what schemes operate within your area.
Protection Schemes
If you operate in the private rental sector and hold money belonging to your client (such as a deposit), you will need to be registered with a government-approved protection scheme. They act as a dispute resolution service should there be any issues when it comes to the end of the tenancy.
We have a list of these pre-populated in your account, but doing a bit of research will help too.
Where now?
If you’re ready to explore the world of being a landlord, then hopefully this will give you a good idea of where you should be starting.
Good luck!