> Self Managing a Buy to Let
Buy to let property continues to be an extremely
popular investment in the UK. As shown by a recent
Paragon Mortgages survey, the vast majority of buy
to let landlords are reporting a stable return on
their investment, and many feel that tenant demand
is increasing. Though the shortage of housing is
affecting the availability of both buy to let and
residential mortgages, the funds accessible to savvy
investors and looser lending criteria for buy to
let loans means that prospective or existing landlords
are among the few groups who can afford a mortgage
in the current climate.
a result, many more might be thinking of investing
in rental property. For those who do, deciding to
self-manage the property is a big step, but one
which can prove very rewarding. Here I will explore
the intricacies involved in being a ‘DIY landlord’.
A number of statutory obligations need to be fulfilled,
ideally prior to putting a rental property on the
An Energy Performance Certificate (EPC) must be
provided to tenants upon request. The National
EPC Company charges £59 plus VAT to evaluate
the property and produce a certificate.
properties must have a valid and up-to-date Gas
Safety Certificate. It is a legal requirement
for landlords to ensure that all gas appliances
and fittings are safe. The safety check must be
conducted by a Gas Safe certified engineer.
are required to insure the building and the contents
therein which belong to them. ‘Landlord
contents’ include floorings, fixtures, curtains,
white goods and any furniture provided with the
property. Tenants are responsible for insuring
their own belongings.
property’s structure and exterior must be
in a good state of repair. Inside the property
all appliances must be safe and in working order,
and water and power must be supplied.
furniture provided must comply with current fire
and finding a tenant
It is possible to employ a letting agent on a 'let
only' basis or to utilise a specialist Find a Tenant
service. The former deals with marketing the property
and the preliminary stages of the rental agreement
(conducting viewings, drawing up the contract, taking
any initial deposit and handing the property over,
for example), whereas the latter deals solely with
advertising the property. Depending on your strategy,
doing your own marketing can be cheaper than either
more expensive marketing strategy – one employing
agency listings, ‘to let’ boards and
local press advertisements, for instance –
might help to find a tenant more quickly, but many
websites allow you to advertise your property for
free. The channels employed should depend on the
type of tenant you are trying to attract and the
area in which the property is located.
should respond to viewing enquiries as quickly as
possible, and should make themselves available to
conduct viewings around the typical schedule of
the tenant demographic they are trying to attract
(a landlord who wishes to let their property to
one or more professionals, for instance, will likely
find themselves conducting viewings during evenings
and on weekends). Transport can present a significant
cost here if the DIY landlord does not live close
to the rental property; additionally, viewings are
very time-consuming and landlords who factor their
own time into their expenditure (and why not? –
you are self-employed, after all) might find this
aspect rather costly.
vetting is a complex procedure. An agency hired
to undertake tenant checking might include any or
all of the following in the process:
an electoral register check;
references from previous landlords;
references from employers;
a credit check; or
a criminal record check
DIY landlord is under no obligation to conduct tenant
checks, but exercising control over whom you let
your property to is advisable. It is perfectly acceptable
to recoup any expenses incurred during vetting from
the tenant, and indeed most tenants will expect
this, but they are likely to be put off by a landlord
who is clearly trying to make easy money from them
before their tenancy even begins. The precise cost
of the checks made – and, if appropriate,
a small fee for your time – is an adequate
amount to ask for.
The tenancy agreement is a legally binding
document which stipulates the rights and
responsibilities of the tenant and the landlord
with respect to the individual tenancy and
to existing legislation in general. All
repairing and upkeep responsibilities need
to be accounted for, and all outgoings not
included in the rent need to be listed as
the tenants’ responsibility to pay
if you do not wish to incur these expenses
can draw up the most comprehensive Assured Shorthold
Tenancy (AST) agreements, but their time and expertise
will not be cheap. They also often retain non-transferable
copyright ownership; investors with larger portfolios
often like to keep a ‘master’ AST which
they alter for each individual tenancy, and this
option would not generally be available to a landlord
who has employed a solicitor. A number of web resources
and stationary shops have free-to-use or inexpensive
AST agreement templates.
A deposit provides good collateral against defaults
on the rent or bills, or damage to the property,
and many landlords like to request one as security.
Deposits are commonly equivalent to a month’s
rent, and the tenancy agreement should specify the
exact conditions under which some or all of the
deposit may be appropriated. Remember that if you
do choose to take a deposit you are legally required
to hold it using an approved deposit protection
scheme, and the following information thereon should
be provided to the tenants within 30 days of the
beginning of the tenancy:
name and contact details;
the address of the property;
the amount of the deposit;
a signed copy of the scheme certificate;
details of the scheme and its purpose; and
information about how to reclaim the deposit and
what to do if there is a dispute
the tenancy commences
Prior to the property handover, a number of final
checks and tasks need to be performed. Firstly,
ensure that the property and, if applicable, the
garden are both clean and tidy; the tenant will
be expected to leave the property in the same state
when they vacate. You should also leave copies of
instructions and operating manuals for all household
appliances provided with the property and a set
of keys for each tenant.
ensure that you have a full and itemised (and preferably
photographic) inventory of the property and contents,
which notes any minor marks, blemishes or damages
which you intend to leave as they are.
Landlords’ legal obligations also extend to
the continued management of the rental property:
The property’s interior and exterior must
be kept in good repair. A list of, and relationship
with, local accredited tradesmen is invaluable
to DIY landlords.
Your Gas Safety Certificate must be up-to-date.
Gas safety checks are required annually.
There is no similar obligation to have an Electrical
Safety Certificate, but you have a ‘duty
of care’ to ensure that all electrical appliances
are safe and in good repair.
An Energy Performance Certificate must be produced
every ten years.
is vital to keep abreast of changes in rental legislature.
Membership of a Landlord’s Association or
a Landlord Accreditation Scheme can help you maintain
the required knowledge and skills that you need
to be a good and successful landlord.
see TurnKey Landlords for a free buy
to let mortgage quote.
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