In This Guide
Administration
Being a landlord
Buy to let investment
Choosing the property
Finding tenants
Letting property
1. Buy to let
2. Residential property investment
3. Why buy to let?
4. Letting your own home
5. Let to buy
6. Short term lets
7. Rent a room
8. Property investment services
Lettings agents
Levels of service
Preparing the property
Problem tenants
Tenancy
Letting property
Letting your own home
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Although much of the content of this guide is geared towards potential landlords who are considering buying an investment property to rent out to suitable tenants, much of the material is just as relevant for those of you who wish to let out a property that you already own.
There are quite a number of circumstances where this may be an option that suits you. Perhaps you have inherited a property that you do not want to sell. Or maybe you have a second home somewhere that you could do with making some money from. Many people have long stints of travel or employment outside this country or away from their normal home and do not wish to sell their property just because they are going away.
Whatever the reason, letting out your property is a good way to cover the costs of keeping it, and is usually a better option than letting it stand empty. Vacant properties are not popular with your contents insurers as they are a prime target for burglars and squatters alike.
However, just because the idea of letting your property out seems attractive to you, it does not mean that you should dive right in and put your property on the books of a lettings agent without a second thought.
Although a good agent will advise you of the steps you need to take first, you should read through the rest of this guide to find out about some of the financial, legal and regulatory matters, preparing your property for occupancy, finding tenants and administering their tenancy, lettings agents and property management and various other related issues.
One step that you absolutely must take before letting your property
is checking with your mortgage lender that they are happy for
you to let it out. Inform them in writing of the fact that you
wish to sub-let your property. If you fail to get their written
agreement then this will normally be a breach of your mortgage
conditions and you could end up in serious hot water.
Some lenders may give their agreement only subject to certain conditions and you need to be fully aware of what these are. You should also make sure that the lettings agent is aware of any restrictions that have been imposed. It is quite possible that the lender will marginally raise the rate of interest that you are being charged on your mortgage loan or charge an additional administration fee.
If you live in a flat or other type of leasehold property, you
will also need to check your lease to make sure that you are not
breaching it by letting your property out. The headlease will
specify whether you will have to gain permission from the freeholder
or their managing agent to sub or under-let. They will generally
require a fee for granting consents and in some cases special
conditions may be imposed. These conditions will need to be added
to the tenancy agreement. Once you have the necessary agreements
to let out your property, you should make you lettings agent aware
of any restrictions that are imposed by the lease.
Finally, don't assume that your existing buildings and contents
policy will insure your property it you let it out. There is every
chance that it will not. If you make the fatal mistake of not
checking, you could end up in financial ruin if your tenants burn
the place down. Generally there will be a slight increase in the
level of your premium to accommodate the extra risk of having
your property occupied by tenants.
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