Before you begin the process of letting your property, you need to be thoroughly prepared. There is a lot to do and plenty to think about before you can think about getting your new tenants through the door.
First impressions count for everything when it comes to property, so it's vital your home looks its best for potential tenants. Maintaining this condition for all your viewings will give you the best chance of letting your home and achieving the best possible price. So, what preparations should you make?
This is the first view your potential tenants will have of your property, so you should focus on optimising its appearance. Make sure all aspects of your property are up to scratch and meet all of the required standards to give you the best chance of finding the right tenants and achieving the best price.
As well as the physical standards of the property itself, there are numerous other standards that will need to be met, including safety standards for gas and furniture. Read more about your health and safety obligations in our guide to being a landlord.
It may seem like a lot of work, but with time, energy and even a bit of money spent now, it could really make the difference to how quickly you let your property and how much rent you can charge.
Before you can let your property, you need to consult a number of parties:
While your thoughts may be leaning towards how much you can make by letting your property, it is important that you consider and budget for the costs involved, too. You should budget for the following costs:
Plan carefully and make sure you always have access to funds to make essential repairs if and when required. It will put you in a much better position to retain a satisfied tenant.
You should never underestimate the work involved in the successful letting of your property.
The vast majority of landlords prefer to hand over the responsibility for finding a tenant to a dedicated and qualified letting or estate agent. This cuts out all of the necessary awkwardness of having to deal directly with viewings and negotiating with potential tenants. There are considerable advantages in using a letting agent, who will:
After you've found suitable tenants for your property, you have the option of either managing the let yourself, or hiring the services of a managing agent to work on your behalf. Much will depend on your circumstances. If you are living abroad, for example, you may want to employ a managing agent to make sure your tenants and the property are sufficiently looked after while you're away.
The majority of letting agents also offer property management services. If this is an option you're interested in, consult the letting agent first to make sure they can offer this service. A managing agent will:
A pre-tenancy checklist should help you make sure you've ticked all the right boxes before you make the next step in letting your property.
There are a number of crucial documents you need to have organised before you let your property. The most important is the tenancy agreement as this is the legally binding contract between you and the tenants that will form the conditions of the let.
The tenancy agreement is a contract between you and the tenants. It specifies certain rights to both you and the tenants, such as the tenants' right to live in the property for the agreed term and your right to receive rent for letting the property.
Since the late 90s, the AST has been the most common form of tenancy agreement and sets out the obligations of both tenant and landlord. The most important aspect of this agreement is that the landlord has the right to repossess the property at the end of the agreed term. Despite its name, the agreement does not have to be short and can continue as long as both parties are happy for it to do so. There is no minimum term specified, either, although the tenant has the right to remain in the property for at least six months.
If the fixed term is for three or more years, however, a deed must be drawn up by a solicitor.
There are specific requirements linked to an AST that include:
The landlord is normally obliged to provide the tenant with two months' notice if they want to terminate the agreement.
The agreement will most likely contain the following information:
This is one of the most important documents in the letting process. It details the contents of the property you will be leaving for the tenants to use and the condition they are in on the day the tenant moves in. It should also include any existing cosmetic blemishes, such as peeling wallpaper or flaking paint. You should be extremely thorough and give it your full attention.
On the day the tenant moves in, both the tenant and agent (or you, if you're letting privately) will be expected to agree the exact condition of the contents of the property. All parties will initial each page and sign it. Make sure every party has a copy of the signed document. This should avoid any unnecessary disputes about any damage that may be caused by the tenant during the tenancy.
It is recommended that the landlord/agent schedule regular six monthly inventory checks at the property in order to assess any damage that may have occurred. You must provide the tenant with sufficient notification of your intention to visit the property for this purpose (24 hours should be sufficient). It is most common, however, for a final inventory check to be scheduled on the day the tenant moves out.
It is common practice to request a deposit from the tenant prior to them moving in to protect you from damage caused by the tenant beyond normal wear and tear, or in case the tenant leaves without paying the rent. Some agents will handle this on your behalf. It is usually equivalent to one month's rent and is taken along with the first month's rent in advance.
The tenant should be provided with a receipt and a clear understanding of what the deposit is for and the conditions for its full return. You must return the money to the tenant within a reasonable period of time after the last day of the agreement if there is no damage to the property or its contents beyond normal wear and tear and if the rent payments are up to date.
If you do decide to withhold some or all of the deposit, you must notify the tenant as soon as possible in writing, stating how much money you are retaining and why. If possible, provide receipts of estimates or costs incurred to repair damage to the property.
From 6 April 2007, new legislation was introduced to help tenants and landlords avoid and resolve disputes relating to the return and use of a tenant's deposit. Under the legislation, if landlords fail to protect the tenant's deposit, they may have to pay the tenant three times the value of the deposit.
The Deposit Protection Scheme is designed to make sure:
Whenever a deposit is taken from a tenant as part of an Assured Shorthold Tenancy, either by a landlord directly or a managing agent, it must be protected in one of the government-initiated schemes. There are two types of scheme, described as 'custodial schemes' and 'insurance-based schemes'.
The deposit is held by the scheme for the duration of the agreement and repaid at the end of the tenancy. It is also free to use. Within 14 days of being paid the deposit, the landlord or agent must provide details to the tenant of how the deposit is protected, including:
At the end of the tenancy, if an agreement is reached between both parties, the deposit will be divided up (if required) and returned accordingly. If a dispute arises, the scheme will hold on to the money until the courts or the dispute resolution service solves the disagreement.
The DPS is currently the only provider of the custodial scheme.
As with the custodial scheme, the deposit is held by the scheme for the duration of the agreement and repaid at the end of the tenancy. However, instead of passing the deposit directly to the scheme, the landlord retains the deposit and pays an insurance premium to the scheme.
Within 14 days of being paid the deposit, the landlord or agent must provide details to the tenant of how the deposit is protected, including:
At the end of the tenancy, if an agreement has been reached by both parties, the landlord returns some or all of the deposit to the tenant. If a dispute arises, the landlord must hand over the deposit to the scheme until a resolution is reached. If the landlord fails to comply, the scheme returns the deposit to the tenant, if they are entitled to it.
There are two providers offering an insurance-based scheme, Tenancy Deposit Solutions and The Tenancy Deposit Scheme.
The responsibilities of both parties are likely to be detailed within the tenancy agreement, although some conditions may vary from one property and landlord to the next.
So, you're now ready for your tenants to move in. Here are a few pointers and reminders to help you organise the smooth transition for you and your tenants.
This is what our Clients think of us. They wouldn't choose anybody else to Rent or Sell their Property. So ask yourself a question... why would you choose anyone else?
If you are thinking of Selling or Renting your Property please call us on 020 8554 9679