10 Tips for Accidental Landlords

Not every landlord is a wealthy entrepreneur with an extensive portfolio of properties. Many have become ‘accidental landlords’ perhaps because they inherited a property, needed to move but couldn’t sell their property or are working abroad for a fixed period of time.

Renting a property can be complex and time-consuming. There are approximately 170 laws surrounding residential lettings, so how does an accidental landlord navigate this minefield of legislation?

To help, we have compiled tips for landlords who did not expect to have that job title.

What Is An Accidental Landlord?

An accidental landlord is anyone who has yet to intend to become a landlord but finds themselves needing to rent out a property they own.
If this is you, read our tips to successfully let your property.

1 Inform Your Mortgage Lender

If your property has a mortgage, you must inform your lender that you wish to rent it out. Your lender may grant you a Consent to Let, which allows you to let your property for a maximum of 12 months while maintaining your current mortgage. Otherwise, you must switch your residential mortgage to a buy-to-let mortgage. In this case, you will incur an arrangement fee, and the mortgage rate may differ from your current rate.

2 Check Your Lease

For leasehold properties, check your lease to make sure you can sublet. You may need to seek permission from your leaseholder. Some leases don’t permit subletting at all.

3 Make Sure You Are Insured

Landlord buildings and contents insurance isn’t a legal requirement, but you would be well advised to have it in place; mortgage companies will require you to have building insurance.

Your standard home insurance policy will not cover your property when renting it out.

4 Do The Maths

Talk to local letting agents in your area and research properties similar to yours on Rightmove and Zoopla to understand the demographic of tenants in your area and the monthly rental you can expect.

Refrain from overpricing your property; receiving a slightly lower rent regularly each month is better than demanding a high rent, which puts off tenants and could result in long void periods.

Look at the rent you expect to achieve and deduct all your costs to get an idea of your realistically desired return. Include your mortgage costs, running costs such as letting agent fees, maintenance, and insurance. You should also factor in potential void periods.

5 Decide On Letting Furnished Or Unfurnished

As a landlord, the decision to rent a furnished or unfurnished property is yours to make. It will depend on your needs and priorities, local tenant demand, and the type of tenant you hope to attract.

Most tenants expect white goods to be provided, so at the very least, you must provide a washing machine, fridge-freezer, hob and oven.
Remember that, as a landlord, you’re responsible for all repairs and maintenance; this includes any furniture you provide.

6 Safety And Certificates

The bottom line in dealing with tenants is that you must comply with the legislation. This means you’ll need to provide several safety certificates and checks:

Gas Safety

All gas appliances and chimneys/flues must be safety checked annually by a qualified Gas Safe registered engineer.

Electrical Safety

Landlords must have the electrical installations in their rented properties inspected and tested by a qualified and competent person at least every 5 years.

Fire Safety

Private sector landlords must have at least one smoke alarm installed on every storey of their properties and a carbon monoxide (CO) detector installed in every room that is either partially or entirely utilised as living space and contains any appliance capable of burning fuel, including gas boilers, wooden stoves, open fires, etc.

Since October 2022, landlords must also ensure that smoke and carbon monoxide alarms are appropriately repaired or replaced when they discover they are faulty.

All upholstered furniture and furnishings provided by the landlord must meet fire safety standards; any sofas, cushions, chairs, or mattresses must carry the fire-resistant symbol.

Tenants must be able to escape quickly in the case of a fire. Landlords must make repairs to ensure that, where possible, fire-resistant materials are used in the structure of the building to stop a fire from spreading quickly through the property.

7 Tenant Checks

Landlords will need to carry our checks on tenants to ensure they can legally rent the property. Doing this ensures that each of your tenancies remains above board and compliant.

Reference And Credit Checks

Always obtain references for your tenants, including from previous landlords. Ask for copies of bank statements and proof of income; as a rule of thumb, only rent to tenants whose monthly income is roughly three times the rent. It is also worth investing in credit checks to know their past payment history. Credit referencing agencies such as Experian can do this for a fee.

Right To Rent Check

By law, you must check that your tenants can legally rent your residential property. This includes all tenants aged 18, regardless of whether they are named on the tenancy agreement. It is against the law to only check people you think are not British citizens.

You must ask your tenants for the original documents that prove they can live in the UK. Read more here about the right-to-rent documents you can accept.

8 Check If You Need A Local License Or HMO Permit

All landlords renting property to five or more people from more than one household require an HMO (House in Multiple Occupation) license. Some councils in England also operate ‘additional’ or ‘selective’ landlord licensing schemes.

You should check with your local council before letting your property.

9 Protect Your Tenants’ Deposit

All landlords should take a security deposit from their tenants. Legally, this is capped at five weeks’ rent for properties where the annual rent is below £50,000 or six weeks’ rent for properties with annual rents above this.

You must place your tenants’ deposit in a government-backed tenancy deposit protection (TDP) scheme within 30 days of receiving it. You can use any of the following schemes if your property is in England or Wales:

• Deposit Protection Service
• MyDeposits
• Tenancy Deposit Scheme

10 Declare Tax On Your Income

You must pay income tax on any profit you earn from your rental property. This is the rental income you receive minus any allowable expenses.

When you start renting a property, you should inform HMRC, as you will probably need to complete a tax return (even if you are making very little profit or a loss). Record how much rental income you receive and allowable expenses you incur in each tax year. Click here for a list of allowable expenses. Since 2020, interest on your mortgage payments can’t be considered an allowable expense.

Get A Letting Agent

If being an accidental landlord feels too much, consult a qualified letting agent. We will gladly advise you, but you can delegate your landlord duties completely to us through property management services. Our years of experience and constant exposure to the area means we’ll do a great job, and you’ll leave behind a lot of stress and hassle.

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