As a landlord, it is your responsibility to ensure the let property is safe and secure for your tenants, and when any issues arise, they will need to be managed and dealt with promptly.
There are a number of ongoing costs to consider when letting a property, including:
- Letting agent fees, if applicable
- Property maintenance and safety requirements
- Income tax and capital gains tax (CGT)
- Landlord insurance
- Unpaid rent and void periods
Some of these costs are tax deductible including letting agent fees and landlord insurance.
Find out more about the costs involved in letting a property in our guide.
Managing the property yourself
Being a landlord requires an investment of time as well as finance. You will also need to be able to maintain a business relationship with the tenant. For example, if rent is late, you may need to assert your legal rights. If you do not have the time to manage your rental property, appointing a letting agent may be the suitable solution.
Appointing a letting or managing agent
Many landlords choose to appoint a letting or managing agent. There are different levels of service available. These are:
- Letting service - advertise the property, find tenants, arrange referencing, negotiate and draw up the tenancy agreement, hold and protect the deposit, make inventory appointments, process the rent
- Management service – all of the above, plus day to day management of the property, as well as arranging safety checks, paying property-related bills, scheduled property visits and advising on deposit settlements
Legislation and compliance
There are certain compliance and legislative responsibilities that landlords must adhere to. These include:
- The property must be fit for letting
- Consent to let from any lender, insurer or freeholder, should be obtained for every rental property where applicable
- Tenant deposits for AST must be properly protected by a government approved tenancy deposit protection scheme within 30 days of the tenant paying the sum
- A valid EPC must be available at the start of marketing the property showing an energy efficiency rating between A-E
- Each tenant must be provided with a copy of a valid gas safety record before the start of the tenancy
- The electrical system and appliances must be safe; for HMO properties a valid EICR is mandatory
- Fire safety regulations must be met, including the required smoke detectors or a hard-wired smoke detection system. These must be tested and shown to be in working order the day the tenancy starts
- All furniture and furnishings provided must comply with Regulations, or be removed
- Making sure he carries out a legionella risk assessment
For more information, visit our guide to landlords’ rights and responsibilities.
There are various documents and areas of ongoing administration that are required in order to let and manage a property. The extent to which you are involved will depend on whether you are managing the property yourself or appointing an agent to manage the property for you. Key areas to consider include:
- Letting agent contracts
- Maintenance contracts
- Tenancy agreement
- Notices to end the tenancy
- Inventory (at the beginning and end of a tenancy)
- Tenant referencing
- Right to Rent checks
- Tenancy deposit protection
- Deposit settlement
- Rent collection
- Compliance – gas, electrical and fire safety, EPC, furniture and furnishings, legionella
Repairs and maintenance
Your tenant should bring any issues that arise to your attention (or to your managing agent if one has been appointed). If you manage the property yourself, you will need to find a suitable tradesperson to make any necessary repairs. If a letting agent is managing the property, they will use one of their approved contactors to provide a quote for the work, which you will then need to agree to before the work is carried out. You are required by law to give the tenant a written response to any legitimate maintenance or repair request within 14 days of the tenant notifying you of the issue, setting out how you intend to deal with it and a reasonable timescale.
Once your property is let you will have effectively given possession to the tenant. However, you will still need to protect your asset and ensure there are no issues. You may therefore wish to arrange property visits at intervals throughout the tenancy.
It is important to remember that unless it is an emergency, if you want to access the property you must provide your tenant with at least 24 hours’ written notice. Many landlords arrange for their property to be inspected twice in a rental period (every three months in a six month tenancy or every six months in a 12 month tenancy).
As part of KFH’s property management service, bi-annual property inspections are provided. To find out more about our property management services, contact our property management team.
It is your tenant’s responsibility to ensure that their rent is paid every month of the tenancy. If you manage the property yourself, you will need to agree how you receive the rent and at what frequency. If you appoint a letting agent, they will be able to arrange this for you and also chase any late payments.
A letting agent will have a good knowledge of local market conditions and will be able to advise on negotiating rent increases. If you decide to manage your rental property yourself, you will need to keep up to date with local market and ensure that you are increasing rent in line with the terms of the contract and relevant legislation.