Can I rent out my property?

You need to find out if you are allowed to let your property.   If you are a  leaseholder you may need permission from the freeholder and if you’ve got a mortgage you’ll need to check with your lender.

Do I need any insurance?

You’ll need to speak to your insurance company,  Your existing policy won’t be valid when the property is rented out. You’ll need landlord insurance.  Apart from the basic cover, there are additional levels of cover to consider, e.g rent guarantee insurance, legal expenses insurance, malicious damage cover etc.

There are numerous providers of landlord insurance. We recommend Letting Hub. www.lettingshub.co.uk/landlords

What about furniture and furnishings?

If you’re renting it fully furnished then all soft furnishings must comply with The Furniture & Furnishings Fire Safety Regulations 1988 (as amended 1993).  The Regulations apply to beds, headboards, mattresses, pillows, cushions, garden furniture used indoors, padded seats and furniture covers. Anything purchased after 1992 should be OK but check for the fire safety label.

What about gas safety?

An annual gas safety certificate is mandatory and must be in place before tenants move in.  If anything happened to your tenants as a result of say, a gas or carbon monoxide leak, you could be sued, face a fine of up to £20,000 or even be sent to prison.  The certificate is carried out every year and the contractor must be Gas Safe registered.

And electrical safety?

It is not mandatory to have an electrical safety certificate carried out.  However, it is an offence to provide any electrial device that is unsafe.

Do I need an EPC?

You will need an Energy Performance Certificate (EPC). This must be in place before any tenancy starts and is valid for ten years.  New regulations are being introduced in April 2018 whereby the property must be no lower than an E banding.

And smoke alarms?

It is now mandatory to install a smoke alarm on every floor of the property – preferably mains connected.

Do I need a carbon monoxide alarm?

Technically only if you have a solid fuel burning combustion appliance – like a wood burning stove, open coal fire or AGA.  However, it is strongly recommended that a carbon monoxide detector is always fitted in a rental property.

What’s an HMO?

It stands for ‘House in Multiple Occupation’.  If you have a number of tenants at the property who are unrelated then you may need a licence.  Under the licence there are many rules and regulations that you will need to comply with (e.g having fire doors fitted etc). Requirements vary depending on the local council.

Furnished or Unfurnished?

It won’t make much difference to the rent but may affect the type of tenant you will attract. Couples and families are more likely to have their own furniture than singles and young professionals.  In London there are a lot of overseas tenants who will not have their own furniture and will want a fully furnished let.

What should I provide?

Think carefully about what you are providing as you will be liable to repair or replace anything that breaks down. It is not common practice to provide a television for example.  Should you do so and it broke down, you may have to arrange for a repair or provide a new television (depending on why or how it broke).

For long term lets it is not necessary to provide sheets, towels or bedding.

For kitchen equipment keep it simple. Provide a reasonable amount of plates, cutlery, mugs, pots and pans but don’t go overboard. Alternatively you do not have to provide any kitchen equipment and this would be classed as “furnished” as opposed to “fully furnished” on the inventory.

What about decorating?

One of the mistakes often made by landlords renting out their own home is that everyone shares their taste in décor!  The property should be decorated in neutral colours.  Bathrooms and kitchens should be painted white.  Avoid strong dark colours or patterns on the floors or walls.  Wood flooring is a good option (although not always allowed and more costly than carpet).  It’s fine to put pictures on the walls but again, keep them neutral and avoid imposing your personal taste on the property in any way.

And cleaning?

It should be spotlessly clean.  A dirty property is a real turn off! We strongly recommend that you have the property professionally cleaned at the start of the tenancy as this will mean the tenants have to have it professionally cleaned at the end (they should leave it as the found it – fair wear and tear excepted).

What about referencing my tenants?

We will arrange this for you through a tenant referencing agency. They will obtain previous landlord and current employer refrences, credit checks, advise on affordability and so on. Generally it is not advisable to rent to a tenant who has failed the referencing.

What about tenants from abroad?

The recently introduced Immigration Bill places the onus on landlords (and agents) to check the immigration status of prospective tenants.  These are called “right to rent” checks. There are stiff penalties for letting to a tenant who does not have leave to remain in the UK.

Do I need an Inventory?

Yes!  We strongly recommend a full inventory and schedule of condition is carried out together with a Check In Report (and Check Out Report at the end of the tenancy). We will arrange this with one of our approved firms of Inventory Clerks.

The importance of this cannot be overstated.  It is your proof in the event of any dispute with the tenant.  In the unlikely event of a dispute going to arbitration, the Inventory and Schedule of Condition are the first documents the arbitrators will ask for.

Can I access my property while it is let?

Yes, but you will need to give the tenant notice and arrange a convenient time.  The property is now the tenant’s home and you cannot just turn up and let yourself in.

What will I have to pay for?

You will have to pay for any repairs and maintenance plus any service charges, insurance and agent’s fees.  The tenant pays the utility bills, council tax and contents insurance for their own belongings.

What about tax?

You will have to pay tax on any profit made.  However, there are a number of expenses that can be offset against your tax bill and your accountant will take care of this for you. They will need receipts for every item of expenditure you have incurred during the course of the tax year.  You will be able to claim for:-

• Service charges
• Repairs and replacements
• Insurance premiums
• Agents fees
• Gas and elecrical safety certificates
• EPC
• Travel
• Void periods
• Wear and tear
• Mortage interest*

*The Government’s new regulations in 2017 will mean landlords will be unable to claim their mortgage interest as an expense. We suggest you speak to your accountant about how this will affect you.

I’m going to live overseas, do I need to do anything else?

Yes. If you are planning on living overseas then you’ll need to tell HMRC and complete a Form NRL1 in order to receive your rental income gross of tax.

If you have any other queries that are not answered here, please give me a call.