With 70 per cent of the Association of Residential Lettings Agents (ARLA) member offices reporting that demand is outstripping supply, the body is releasing fresh advice to landlords new to the market.
Ian Potter, operations manager at ARLA, wants new property investors to be aware of the essentials they should consider before the first tenant moves in.
He said: “Letting out a property can be a shrewd move whether you’re doing so for the long-term as an investment or because of a pressing need to move on.
“But renting out a property can be full of pitfalls and potentially result in financial loss for the landlord.
“For example, if the right checks are not carried out, you may choose a risky tenant who defaults on paying the rent, leaving you unable to pay your mortgage”.
For anyone considering renting out their property, ARLA has the following advice:
Do your research: Research other rent levels in your local area and look into legislative requirements. For example, if the property is to be used for sharers, you may require a licence from the local authority.
Equally, it is mandatory for landlords to comply with Tenancy Deposit Protection legislation, requiring deposits to be protected for all Assured Shorthold Tenancies, the threshold for which changes to £100,000 from October 1.
Don’t go it alone: Many landlords opt to work with a letting agent either simply to help let the property, or to also manage it. Either way, it is crucial to fully research any agent to guard against unregulated, unethical agents.
A good agent should be able to help a landlord find reliable tenants, conducting the relevant reference and credit checks and ultimately helping to protect your investment. Longer term, the same agent should be able to manage maintenance and repairs, saving you unnecessary hassle.
All ARLA agents are regulated, meaning they’ve received thorough training, adhere to a code of conduct and are backed by a consumer redress scheme as well providing client money protection (similar to an ABTA Bond).
Don’t cut corners: Make sure the property presents itself well to the market in terms of the décor, the condition of the furnishings and also the mechanics of the house, such as the heating system.
A good quality property is likely to attract better and more loyal tenants and achieve a competitive rent level. And don’t forget to prepare a detailed inventory of the property, including a schedule of condition of the contents, walls, ceilings, doors and other fixtures and fittings. Look for an inventory provider who is a member of the Association of Professional Inventory Providers (APIP), which is a subsidiary of ARLA.
Cover yourself: Ensure you have specialist buildings and contents insurance as without a specific reference to letting you may be uninsured. And consider taking out insurance to protect against a tenant not paying rent, a particularly sound investment in a tough economic climate.