Letting My House For the First Time
When tempted to rent out your property for profit, here's what to know.
Letting my home must-knows
If you’re a homeowner, letting a property can be a great alternative to selling and a good way to earn passive income. You’re certainly not alone in that thinking, with 4.61 million households in the private rented sector, according to Statista. Renting out your home gives you security: you’ll have a place to call your own and still have an asset in your pocket should you decide to sell your house in the future. But before you begin, make sure you’re up to speed with all that letting a property entails.
What should I know before renting out my house?
Becoming a landlord is not as glamorous as it may seem. There are a lot of regulations, management and financial demands – and that’s all before seeing a penny of profit. A preferred way of letting a home is to work with a lettings agent to keep time commitments to a minimum.
Keep in mind that letting your home will incur taxation, which will attract some relief but may cause you to lose benefits (such as child benefit) or pay tax at a higher rate.
Before you decide to let your home, be clear on the time, legal and financial implications.
Your responsibilities as a landlord
When looking into how to rent out your house, first consider these key considerations.
1. Health and safety requirements The health and safety of the tenants is paramount. It’s your legal obligation to ensure that any fixtures and fittings in the home meet the current health and safety requirements. The gas and electric systems are included in this.
Fire safety checks will also need to be carried out, which involves making sure the smoke and carbon monoxide alarms are working properly.
The government has more on the regulations when renting out your home.
2. Maintenance and repair It comes as no surprise that you’re responsible for the property, unless you hire a lettings agency to manage the property. That means all maintenance and repairs are on you. If there’s a gas leak, you’ll need to step in to help your tenant. If the boiler is on the blink, you’ll need to pay for the repair or replacement. If there’s a water leak – you guessed it – you’ll need to be on hand to help.
A lettings agency can take this role from your plate, freeing up your time and resource.
Agents can perform regular checks of the property to make sure your investment is still in good condition, and that tenants are treating it well. Landlords must make sure that not only are their properties safe and meet compliant regulations but also that the tenants aren’t doing anything they shouldn’t. These days, landlords have a lot of responsibility to protect the property – from damp to mould to gas safety to cannabis farming! Fortunately, a lettings agent can handle property maintenance so your home stays in tip top shape.
3. Energy performance certificate (EPC) Whether you’re selling or letting your home, it needs to have an Energy Performance Certificate (EPC) and rating, which summarises the energy efficiency of the property. You’ll be responsible for arranging an EPC appointment unless you have the assistance of a lettings agency who can handle it for you.
4. Deposit safety The tenant will be required to put down a deposit before moving in, but you can’t just pocket it. You’ll need to store in a government-approved Tenancy Deposit Scheme, which gives you both peace of mind that the money is protected and available to cover damages or returned in full when the tenant moves out.
Is letting your home right for you?
Whether or not it’s wise to rent out your property depends on your unique situation. Being a landlord requires time and commitment, though a lettings agent can make it more manageable.
How much do lettings agents charge to manage a property?
The fee for using a letting agent depends on the service you choose and the monthly rent of the property. The service you select will depend on your needs and how much time you’re willing to commit to the property. Some landlords just want a helping hand to get started, while others want the passive income without the hassle of managing the whole let. You can find out more about letting agent fees for landlords here. At Purplebricks, we offer 3 packages designed to suit a variety of needs.
Do you need some help sourcing the right tenant? We’ll advertise the property on your behalf, conduct the viewings and prepare the tenancy agreement.
This is ideal for landlords who want a bit more support. It includes all of tenant find, plus we’ll collect the rent, manage monthly statements, and serve legal notices where required.
Ideal for the landlord who wants a more hands-off approach, this package includes all of tenant find and let & rent collect, as well as inspections every 6 months, inventory checks, repair and maintenance recording, check-outs, and the use of Purplebricks’ management portal for easy access to documents and updates.
Book a free valuation to get started in finding the right lettings package for your home. You can also meet your local experts for deeper insight into what renting out your home would look like.
Do I need to discuss letting my home with my mortgage provider?
If you’re thinking of renting out your house, you should talk to your mortgage provider first. Some lenders will be able to switch your current residential mortgage to a buy-to-let mortgage. Others may not wish to lend if the property is going to be a rental or if the rental doesn’t meet their buy-to-let mortgage criteria. This would mean taking out a new mortgage.
While you’re at it, it’s advised to take out landlord insurance to protect you, your property, and your tenants. It’s not a legal requirement to have landlord insurance, but a mortgage lender will likely advise or require it before you take in any tenants.
Ready to rent out your house?
You are ready to learn more about letting your property with Purplebricks? Your local property experts are ready to help you let your property with success. Take a look at the landlord service packages or book a valuation to get the ball rolling.