Property rental has become a popular way of bringing in an income, or additional income with 22% of the UK’s rented properties being from a private landlord. London is one of the most expensive cities to rent a property in the world which makes it attractive to buyers looking to get into property rental. Becoming a landlord can be more hassle than it’s worth and being a landlord in London can come with a few extra risks, take a look at these tips.
Vet your tenants
It might sound simple but making sure you properly vet your potential tenants can help minimise certain risks such as non-payment or illegal activity happening on your property. If you go through an estate agent, then they will do this for you but you can do it yourself; checks such as DRB (formally CRB) and credit checks will ensure that your potential tenants don’t have any negative records which may make them less than ideal tenants. Also performing an affordability check, looking at their current income and outgoings will ensure that they can afford to keep up with the required payments for your property.
Take a deposit
For most properties this is a month’s rental that is required at time of signing a contract. All landlords are required by law to place the deposit in a government approved tenancy deposit scheme. Take an inventory of all items that are in the property at the time of rental, make note of any damage that is already on the property and take photos. Keep these as assurance of the condition of the property because it you need to withhold any of the deposit at the end of the agreement this evidence will back you up.
Have a proper tenancy agreement
As well as a proper agreement, make sure you renew it at the end of each term. A rolling contract might feel of benefit to you and the tenant but it doesn’t give you much of a safety net should the tenant decide to leave the property. Make sure the tenancy you are using is up to date with current legislation.
Set a competitive rent
Do your research before setting the monthly/weekly rent, make sure it covers all your costs such as the mortgage on the property, landlord’s insurance and potential repairs but make sure you’re not out pricing the property. You want to encourage people to rent from you but if you’re asking too much then it will put potential tenants. Living in London is already expensive so consider your area, your potential tenant’s lifestyles, careers and possible income, tailor it around them.
Know your property law
Make sure you know all the law that relates to what a landlord can and can’t do with regards to situations like rent arrears or a vacant property. This means you will know what is required from you such as court orders or notice periods.
Have a backup plan
For some landlords the income they generate from renting out a property is needed to live on so a tenant missing a payment can have a knock on effect – always have a backup so you’re not left struggling for your own bills. A week or month’s missed payment for a property in London can be in the thousands so make sure you know you can manage should something unexpected happen.